One of the top three reasons businesses fail comes down to how well management understands who their target customers are.  The path you travel to making more money accelerates when you know, with precision, who benefits most from the products and services you offer.

The easiest way to identify your target customer is to ask yourself this simple question: who benefits most from your product?  It’s impossible to position your business to make money until you know who benefits most from what you do.

It has been said that every business is like a fruit tree.  Fruit trees are planted to produce a specific fruit for those who like that fruit to enjoy.  The challenge is no one can pick apricots from apple trees.

If you grow only apple trees, those customers looking for apricots will never buy from you. They will never be your target customer because they only want to buy apricots, not apples.  If you want to target apricot-loving customers, you will have to plant apricot trees in your orchard.  Otherwise, apricot lovers will never buy from you.

The core component of your business model lies in how you structure your business to serve the needs and satisfy your customers’ wants while earning a profit.

You can’t structure your business to make money until you know who your customer is and how they will approach their buying decision with you.

The people you identify who will benefit most from what you do comprise your target customer base.  A target customer is a specific, well-defined segment of consumers that a company plans to target with its products, services, marketing, and sales activities.

Below are foundational questions to jump-start your thought process for answering who is your target customer question.  As you answer each question, you will refine what your target customer looks like:

1. What does your target customer do that triggers their need for what you do? (behavior)
2. How often, and at what volume, does the behavior occur? (frequency/quantity)
3. Where, or in what factors, does the customer find value? (motivation)
4. What makes these particular customers easy to serve? (profit potential)

At a minimum, you need to know the answers to the above questions because customers are essential to every business.  It is their purchase from you that initiates the exchange of money made through their purchases that form the Net Sales of your business.  Without a sufficient number of customers buying to cover your costs of doing business, there is no business.

Knowing who your business exists for takes time. It is time well spent. It requires a lot of hard thinking to clearly and precisely define the type of customer who is motivated to buy from you—getting the who right goes holds the first key to making more money.  The better you identify the concentrated truths about your customers, the better your business model decisions will be in identifying what the most profitable actions you need to take in your business.

Would you like help identifying your target customer?

Click here to schedule an appointment with one of our certified BusinessCPR™ Business Scientists to discuss the best way to identify your target customer.