If you’re in the process of transforming your business/brand to the next level of success, the first step in positioning your brand for competitive advantage is to be laser-focused on targeting high value customers.
Knowing where to aim your creativity and money is the essential first step in any marketing initiative to grow the value of your early stage brand.
Targeting customer segments is about exclusion rather than inclusion. That said, identifying high value customers doesn’t have to be an exercise in precision as much as it is having a focused navigational aid to aim your marketing resources.
It's worth noting your most perfect and profitable customers most likely will not comprise the largest majority of people who will make up your customer base. Like a game of darts, you can score points and win without a hitting the bullseye with each throw.
To gain a comprehensive and actionable perspective on defining your high value customer profile, consider all these criteria:
Demographics The basic and fundamental starting point, critical for segmenting the market to identify the highest potential target groups, usually defined by sex, age, household characteristics, occupation, origin, income, and education. The most useful aspect of demographics is these attributes are concrete and without bias.
Psychographics These are particular psychological and attitudinal traits that can be discovered and characterized to better understand what will drive certain purchase decisions – e.g. lifestyle, interests, values, likes/dislikes, preferences, etc. How a person feels are big clues to discovering about what really matters to them. And people always buy into meaning and emotion rather than the perceived functional benefits.
Category/Brand Attitude Drivers Often marketers define the attitudes of consumers of their brand by using descriptors that really reflect the basic category or “cost-of-entry” drivers that engage all people in a category regardless of their specific brand preferences. The result is that there is no special attitude in the target customer profile that will be different from what all other consumers in a particular product category expect at a minimum. In effect, these are the antes to participation in the category at large. Knowing what this base line is will help you uncover what makes your brand good and different.
Category/Brand Usage Habits Current usage is critical to assess, because ultimately your marketing efforts should be designed to modify the current attitudes and change the expected behavior of target consumers, so a good category benchmark is critically important. This is often overlooked by many marketing teams simply because certain habits and attitudes are assumed rather than confirmed.
Behavior Limiting your profile definition to psychographics, attitudes and usage habits may not be actionable enough for innovative marketing initiatives. Having a clear understanding of the exact type of mindset and behavior that characterizes the target consumer is imperative. Your segment profile description is more actionable if you can visualize evidence of this profile with a specific behavior.
Emotional Needs Once again the more compelling dimension of a target customer need is the emotional side, especially for consumers who have yet to establish a strong loyalty to brands. In particular, one must determine precisely how the target customer currently feels about a current product, and even more critical, coming up with an insight that identifies what she/he yearns for that is the highest relational, expressive-to-self benefit that transcends product use. Once properly defined, higher emotional needs become the basis for re-shaping your value proposition and your brand’s positioning strategy.
It takes a both a macro and micro view to define your best opportunities to connect with the people who represent your best opportunity for marketing success. Having a detailed definition of a target segment is only the beginning.
Defining a segment of people who represent your most fervent customers will not automatically translate into understanding them in ways that matter to them enough for them to engage with your brand. You’ll need to gather real insight into why your proposition matters to these people in ways available alternatives in the category do not meet. This requires you understand their unstated needs, their fears, how they think now, how they are buying, and finally what you want them to think, feel and do.
Your value proposition must be relevant to the target customer’s emotional desire, it must resonate with how they live their lives, and finally it must substantiate how it delivers on its promise.
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