Up Periscope

How to Determine your Ideal Customer

Alison Kawa - Monday, October 21, 2013

You should be thinking of your prospective customer from the moment you come up with your initial idea. Otherwise you won't be able to design a product! At each turn of product development, you should consider your customer. What would they find most helpful? How are other companies addressing this problem? Where are they succeeding or falling short?

Determining your Ideal CustomerThe question of who to design for is very important. You need to ask yourself:

  1. Who has the money?
  2. What is their problem?
  3. How can I solve this?

Starting out with "Who has the money?" is the opposite approach of what most people do when they come up with an idea for a startup. Most startup ideas are born out of personal frustration. "Why can't someone come up with an easy way to.... Eureka!"

Some angel investors are willing to fund your startup simply because they share your frustration and would like to see your product make it to market. However, most investors want to see a solid business model and customer acquisition plan before they hand over a check. Make sure you're setting yourself up for success by starting with a plentiful market.

We made this fundamental mistake when we started Social Sonar. My father's loose leaf tea shop was the inspiration for our service to manage social media for busy small business owners. We figured out a way to offer basic services at a very low cost and began signing up sole proprietors.

We soon discovered that even $150/month was a stretch for most small business owners. Tracking sales from social media is not a very straightforward process, and most of our customers didn't have the ability to attribute sales to our efforts. We found ourselves struggling to prove the value of our services and began losing customers sooner than we had anticipated.

Eventually we realized larger businesses would better understand the value of being seen as a content expert and building a relationship with their customers; they also have the resources to analyze traffic sources and attribute sales accordingly. Read: they have more money. 

We developed a higher-cost, more comprehensive offering for mid-sized businesses and have been more careful about who we sign up. Before we agree to provide services, we make sure they share the same goals and understanding of digital marketing we do. Our customers now stay with us longer and are more satisfied with our services.

Questions? Suggestions? Comment below or send us an email at service@socialsonar.com.