The focus of today’s blog is about learning how to choose your customers so they fit your business and how to say “no” to those that don’t. I use the word ‘choose’ very deliberately because I want to emphasise that, as a business owner, you have a choice about who you want to sell your products and services to.
While you might be thinking, I want to sell to as many people as possible, doing so can actually hinder your growth and potential in the longer term. The best course of action is to always choose your customers to match your growth strategy.
When You Choose Your Customers, You Choose To Act
One of the biggest misconceptions I’ve come across over the years is the belief by businesses, that they don’t have a choice when it comes to their customers. But in the same way, that your customers have a choice about who they buy a product or service from, you too have a choice.
This belief often occurs when an entrepreneur or business owner is just starting out and can linger if a solid growth strategy is not in place. There can be a tendency to think, I need all the customers I can get! And, so they simply say “yes” to everyone who shows an interest in an attempt to grow the business.
But your choice of customer is really important. Not just because it helps you connect with the right people for your business, but also because of the impact it has on your mindset. By going from a passive recipient in the relationship with a customer to an active one, you lay the foundations for much of the marketing you’ll do going forward — especially when it comes to targeting customers.
The act of marketing and the act of choosing your customers is an active choice. And when you choose, you choose to act. That’s the first thing to think about: How do you actively change your mindset so that instead of waiting for customers to come, you choose your customers so that they are right for your business?
This is so crucial because many entrepreneurs and business owners put all their energy into building their product/service and less effort into aligning the product/service with their customer’s needs. Aligning the right customer with the right product enables you to scale more effectively. And that’s a really great recipe for growth for any business.
Why Did You Start Your Business In The First Place?
Whom did you have in mind?
Chances are when you started your business you had an ideal customer in mind. That individual whom your product/service is perfect for and helps them solve a problem and/or improves their life in some way.
The first clue about your ideal customer should come from your purpose, mission, vision. So whom did you immediately think of when you began considering the customers you wanted to serve?
For better clarity, I want you to take a pen and a piece of paper and describe your ideal customer. It could be the person you thought of when you started this business. It could be you, a friend or family member who had a problem, maybe even a colleague. Whoever you have in mind, write them down, describing:
- Exactly who they are
- What motivates them?
- What challenges do they face?
- The problem(s) they have
- How you can help solve them
Alternatively, download our Free Customer Profile Template where all these questions are mapped out for you with examples of how best to answer.
Who Else Is Possible?
The next step is to allow yourself to dream a little and imagine all of the people who have similar challenges or pain points to that first customer. This will help you identify who else you could help with your product/service.
Again, get out a piece of paper and a pen and start brainstorming who else might be your ideal customer. If you get stuck, ask those you trust who would also have insights into what you are trying to accomplish with this product or service. At this initial phase, you are simply asking who else is possible. It doesn’t mean you’ve committed to targeting them yet.
However, a slight word of warning: be careful you don’t get caught up with a suggestion and spend too much time and effort targeting a customer that isn’t quite right simply because a trusted source suggested it. Right now, you’re looking for ideas that fit before you invest in the next stage which is active targeting. I’ve seen businesses go off course following an imperfect customer, only to come back to where they started (where you are now). So just be conscious of this when you’re seeking input from others and determine if the suggestions fulfil that “fit” criteria. Remember choose your customers so that they fit.
Why do I advocate writing all this stuff down? Because it helps get these ideas out of your head and into a safe place. This act serves a purpose: it tells your brain that the information is safe and won’t get lost (because you’ve captured it), which prevents the ideas going round and round in your head and stops you from acting.
Build A Customer Sieve
The next thing you need to do is build a metaphorical customer sieve. This is because you’ll inevitably have dozens of potential customers as a result of your brainstorming. The important part now is to qualify all those customer types (avatars / categories / segments) to see which ones you should focus your attention on. This sieve will help you choose your customers from a methodical and pragmatic perspective.
Your customer sieve will help you filter customers by two criteria:
resonance and profitability.
SIEVE FOR RESONANCE
Sieving for resonance is where you qualify a potential customer in terms of whether helping them fits your purpose, your mission and your vision. It’s easy to get distracted on the entrepreneurial journey so it’s important to always ask this simple question before your choose your customers. Ask yourself
Does helping this person help me achieve my purpose?
Is helping them in alignment with the mission of the business?
- How does it feel to help them? Does it feel right?
- Does it make sense?
- Do their values align with mine? Do I like them?
Don’t underestimate the value of “liking” your customers. If you like them and helping them feels right, you can better understand their needs. And when you better understand someone’s needs, even to the point where you empathise with them, you can serve them better. It’s also an indication of where you can do your best work; be it a particular product you’re building or a service you are offering.
SIEVE FOR PROFIT POTENTIAL
I start by assuming that you are in business to make a profit. To do that, you need to align the right customer with the right product or service and then understand how you can scale that.
That’s why when you build your sieve, you’re not just looking for ideal customers, but crucially where there are sufficient numbers of them, that are easy to access and who have the budget to spend on solving the problem they have.
Let’s ask two simple questions:
- Is there enough of them for there to be a market, in this, for me?
- Do they have a budget to buy my product or service?
To answer the first question, it’s necessary to do some digging in the form of market research. But we shouldn’t just look at numbers e.g. how many women are there between a certain age in the world? Rather, we need to delve deeper into their pain points, challenges, motivations and use those as the objective of the search. You’ll find you’ll discover more clues this way. You’ll even discover where groups of these customers congregate and find leads to research that has already been done in this space. Go with an open mind but focus on the objective. The first objective here is to quantify the market.
A great way to answer the budget question is to ask: “How much are they spending to solve this problem or need right now?” And, of course, where or with whom are they spending it? This will tell you a lot and it’s actually something you can discover by asking the right questions of people and of course of Google.
Don’t underestimate the value of asking the question directly first e.g. asking your potential customers how much money they are spending on a product or service each year and with whom they are spending it.
Then ask the same question of Google. Another trick is to see who else in the marketplace is looking for the answer to this question and see what existing research has already been gathered. This is a great starting point.
Learn To Say ‘NO’
We’ve already discussed the tendency to say “yes” to every potential customer at the start of a business or entrepreneur’s journey. The same can also happen when a business finds itself in a comfort zone having operated for a while and when making changes has become difficult.
When perhaps you are afraid to say “no” to the people who have been your bread and butter for a long time. The bread and butter customer is important but only when it is a conscious, strategic decision on the part of the business.
Remember your sieve, if your customers don’t come through it by fulfilling the resonance and profitability questions then you have to say “no”.
If you don’t say no to the wrong customers, you are closing the door to the customer who DOES fit and are stalling your own growth.
So build your sieve and choose your customers knowing that they are the ones that will help you grow. And don’t forget to check out our customer profiling template to help you choose correctly.
Let me know if you have any questions or insights about choosing your customers in the comments. Let’s start a conversation about customers!