How to identify your ideal customer

Edited excerpt from How to Find Your Ideal Customer by Sachin Rekhi:

1. Generate candidate customer segments. First, take an inward look at your existing customers, using available customer registration data, your analytics tool’s demographic segmentation capabilities, customer surveys, tools like FullContact, Clearbit, Pipl, ZoomInfo, and MaxMind’s IP Address database, and interviews with sales reps, account managers, and customer service reps. Then, take an outward look across the broad industry by reaching out to industry experts, analyzing competitor websites, marketing materials, and customer forums, and by conducting potential customer interviews.

2. Determine the most meaningful attributes by which you can segment and cluster your candidate customers. Some of the most common segmentation attributes include use case, role, demographics, firm characteristics, and psychographics (like willingness to try new solutions, personality characteristics, and personal goals).

3. Evaluate the attractiveness of each of your determined customer segments based on attributes that you’ve developed. Typical evaluation criteria include segment size, resonance with value proposition, willingness to pay, strongest delivered value, acquisition strategy, and strategic fit. As you start to build up an existing customer base, you can start directly measuring the attractiveness of given customer segments empirically by studying product engagement rates, analyzing monetization and churn metrics, analyzing sales funnel conversion rates, and conducting NPS surveys.

Notes:
(1) With the Job To Be Done approach, customer characteristics are not the primary focus, because different types of people may share the same need for a job to be done. But identifying the characteristics of your ideal customer can still be important, because they are relevant to pricing, marketing and sales channels.
(2) Cf. How to learn about your customers.
(3) Cf. Why it matters who your early customers are.

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