As a small/medium business owner, you don’t have time for basic marketing tasks such as defining your ideal customer, but I would urge you to take some time to define your target customer – it really doesn’t take too long. Plus, defining your customer can pay big dividends in sales and in other things such as saving time in deliberating over which new feature to add.

If you’ve never taken the time to think about your target customer, take a few minutes and “frame” your target customer. The process is easy, it actually takes more time to describe the process than to do it. A written customer-frame can be a valuable tool to refer back to when making decisions.

Step 1: Who is your customer

Define in a succinct manner “who” is your customer. You most likely have a working definition of who your customers are, but if you don’t there are countless ways to segment a market (listed below). Your goal is to specifically and succinctly define “who” is your customer.

Some examples of market segmentation are:

• Geographic (small medium businesses in Chicago, Il)
• Type of organization (retailers, manufacturing firms, etc)
• Size of firm (10 – 20 employees)
• Occupation (lawyers, programmers, etc)
• Profitability (individuals, SMB, enterprise, etc).

There are also product-related methods such as:

• User-type (programmer, administrative assistant, etc)
• Usage (business computing, personal/home computing)
• Price sensitivity
• Brand loyalty (Admins committed to Oracle database engine)

Maybe you have more than one segment. For the purpose of this exercise, limit your target customer to one type.

Who is my target customer:
As an example, consider you sell personal budgeting software for middle-class families. So, your “target” customer might generally be something like (I’m making this up):

A typical middle class family in the US.

For added detail, you might complete the “who” with information such as:

A typical middle class family in the US consists of: husband, wife, and 2 children. 50% of middle class families are dual income (husband/wife working). On average they have ~$5,000 in debt, and only 5% of middle-class families have a savings account with more than $1,000.

This is your typical customer.

Step 2: Problems, not features

Let’s put the customer and software relationship into perspective. Without being too harsh, you need to recognize that your target customer doesn’t care about “software”, they care about solving their problems. Your software happens to be the (current) method they use to solve their problems.

So, with that in mind, let’s list the top 5 problems (more or less) that our typical customer encounters – in relation to the purpose of our software.

What are my target customer’s problems

• Limited time to manage finances because attending to children, household needs, career, etc.
• Wants to start saving, tired of living paycheck to paycheck
• Frustrated because doesn’t know where all the money goes every month
• Limited discretionary income.
• Limited financial knowledge; isn’t savvy with money, investments, etc.
• Wants to get out of debt
• Has tried budgeting before but it never seems to work

Step 3: What is important to your customer

So, now that you have a basic list of who your customer is and what some of their problems are, you can quickly develop an overview of what is important to them. Write them down as well:

What is important to my target customer

• Time is essential, so it can’t be time consuming
• Easy – this is part and parcel to the “time”, but also to the problem of not being “savvy” with finances. Also, the “budget doesn’t work” is important here too.
• Goals – wants to get out of debt, wants to save, but can’t. This person is goal-oriented.
• Price is important because they have limited income

Now you have an understanding of the problems your customer faces, as well as the benefits they seek… Keep this list handy, and update it as your customer and/or the market changes.

What’s next?

This is just one method of framing the customer. Depending on the type of product you sell, you maybe need to understand how the customer is using the product – as you know, many times your product is not used how you originally thought and/or intended it to be used. But, that’s a different topic for another day…

The ideal next step might be market research to confirm/disconfirm those assumptions, but you’re smart, your list is probably fairly accurate for your specific segment. So, the question then becomes, how can you use this to sell your software?

The first way you can use this list is when writing your marketing copy. When you write your website content, speak in terms of how your software solves their problems and how it matches what is important to the customer.

For instance, your personal budgeting software intro might go something like this:

The simple excercise of definining your customer, what their problems are, and what is important to them, allows you to market your software in their language.

How else might you use this information? Consider your next feature planning session. If someone says, “hey, we should add more features so the user can look at stock prices, monitor the dow jones industrial average, and buy/sell stocks.”, you can check that suggestion against your frame to see if it fits… if not, it’s easy to throw out because you (and your team) have a defined model of “who” you are developing the product for.

Of course, there are other factors involved in these types of decisions – such as competitors, market trends, etc – but again that is another topic for another day.

Check back soon for new posts, articles, and more…

Andy