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Who's Your Mommy?

Posted By Ron Sidman, Tuesday, October 2, 2018

Have you really pinpointed exactly who your target customer is? Determining specifically whom to focus on is a crucial strategic decision that should impact the design of every aspect of your business model and increase your likelihood of success.

 

I do quite a bit of consulting with entrepreneurs and I mentor college students studying entrepreneurship. One of the very first and most important steps in starting a new company is to select a specific, somewhat homogeneous segment of the total market to be the target you intend to dominate. A startup can’t begin to develop products or form channel, pricing, and marketing strategies until it does so. Yet I’ve found that established companies often have lost track of or never really clearly defined who their target customer really is. The typical result is a loss of competitive advantage. 

 

Whether or not you feel you have target customer confusion, I have some thoughts and suggestions:

Don’t Try to be All Things to All People

To paraphrase Abe Lincoln, “you can’t please all of the people all of the time.” Maybe more than ever in this country, there are major differences between people’s interests, beliefs, lifestyles, parenting styles, and incomes. If you try to please everyone with your product, you may be loading it up with costly features that many customers could do without. The good news is that because there are so many market segments, there’s a better chance you can find one or more you can dominate. And domination is what you should be seeking. Better to totally satisfy and dominate a smaller market than be a me-too player in a big market. 3% of a 50-million-dollar market ($1,500,000) is not as good as 40% of a 5-million-dollar market ($2,000,000)—and probably not as profitable.

Define Your Market Segment

There are numerous attributes that can be used to define customer segments. To name a few:

·        Age

·        Income level

·        Education

·        First-time vs. second-time (or more) parent

·        Geography

·        Beliefs—religious and political

·        Parent or gift-giver

·        Lifestyle (e.g. outdoorsy, like to travel, dog owner, etc.)

You can cut it as finely as you want. For example, first-time parents over 30 with a college education who live in rural areas and like to travel by car. Just make sure the market is big enough to make pursuing it worthwhile.    

 

Leverage Your Strengths

Pick a target segment that you know well or syncs with your skills or interests. The simplest approach, and it happens a lot in the juvenile industry, is to create products for people like yourself. That certainly reduces the need for market research. If not, it’s helpful to have one or more people on your team from the target segment who can give you feedback.

Look for Unhappiness

You also should look for a market segment that is not totally satisfied with the competitive products that are currently available. There’s bound to be some definable group of customers that wants products or features that no one else is offering in your category. That’s your opportunity!

Become an Expert on Your Customer

Once you’ve defined a niche, you’ll want to become and remain the world’s leading expert on it for your product category. This is done via internet research, in-person interviews, and field observation. You’ll want to identify unsatisfied needs of course. But you also want to learn how they make their buying decisions, where they get their information, how they like to shop, and any other information that will help you design your product and let them know why it’s their best choice and how they can easily purchase it.

Start on a Beachhead

If you’re a new company or you’re introducing a new product, it’s often best to start with a relatively small “beachhead” market segment where you have the best chance of success. This will allow you to work out any bugs in the product or delivery system on a small scale without taking a huge risk up front. Once you’ve made corrections and improvements, you can then safely move on to larger adjacent market segments.

Next Steps

If you feel that you’ve defined a very specific target customer for your products, everyone in your company understands who that is, and you’re the category leader in that segment, congratulations! If not, I hope some of these suggestions will help you get there.

 

As always, if you’d like more information or assistance from me regarding your unique challenges or you just want someone to brainstorm, vent, or commiserate with, consider taking advantage of JPMA’s Executive Mentor Program by scheduling a Skype or Face Time with me. I’d enjoy meeting you and helping you any way I can. Check the JPMA web site for more information or contact Reta Feldman at rfeldman@jpma.org.

 

Ron Sidman was the founder and CEO of The First Years, Inc. and former Vice Chairman of the JPMA Board of Directors. He is currently a  business consulting resource for JPMA members and serves on the Advisory Boards of both the Institute for Entrepreneurship and the Dean of the College of Education at Florida Gulf Coast University. Ron is also the President of Evolutionary Success, LLC, a life and business coaching company. He can be contacted at ron@evolutionarysuccess.com.

 

   

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