Here is a recent email exchange from my day job:
Random Guy to me: (I’m paraphrasing) Hello, we are looking to acquire companies in Canada and would like to acquire your company. Please let me know when I can call you to discuss terms.
Me: Is this a joke?
Random Guy: Not a joke. I am serious.
Me: You want to buy an $11-billion company?
Random Guy: No.
After that he went away. While I’m not sure this gentleman could buy a paper route, he wasted his time and mine (though, to be fair, it made a dull conference call considerably more fun) because he didn’t understand his Ideal Customer.
Marketers yammer on and on about target markets and micro-targeting and other terms that make our customers sound more like clay pigeons than busy people who need to buy stuff. Understanding who we are selling to is pretty important if we want our sales people to avoid conversations like the one above, but the thing we don’t spend enough time on is who our Ideal Customer actually is.
Ideal Customers probably make up only 20 percent of our base, if we’re lucky (I totally made up that number, but it seems likely enough), yet most of us probably don’t have a working definition of who our Ideal Customer is, let alone any data about what they spend, how long they stick around and whether or not they actually like us.
So, what’s an Ideal Customer? It’s the customer who has the perfect combination of a compelling need for whatever you sell, the understanding or context to fully appreciate its value and the resources to do business with you. This is different from the ideal decision-maker, who we describe as having the need, the budget and the authority. They’re important, but remember that decision-makers and users are not always the same person.
Let’s pull this apart. No, wait. Let’s make a Venn diagram and then pull this apart like an overcooked pot roast.
Don’t you feel better? I feel better.
The Ideal Customer Has A Compelling Need:
I read someplace that 55% of Microsoft Excel users don’t use 90 percent of its most powerful features. I think I use about two percent, personally and would use more if I had the slightest idea what all the stuff in the menus actually does. My friend Jane, on the other hand, actually knows what those are for and can make Excel her b*tch without really trying.
The same has been true, in my experience, for most other B2B products. Our customers may buy a bunch of modules or a bundle of services or some package of widgets, but just like the white crayon, most of the stuff they pay for will go into the trash still pointy.
But for Ideal Customers, the whole shebang (and more) is what they are after. These are the people with exactly the problem you are good at solving. My friend Mike is a consultant who works with late-stage technology start-ups to build and fix leadership teams. His ideal client is a CEO who needs to drive rapid revenue growth.
Another consultant I know works with companies that are struggling, and his ideal client is a CEO who is experiencing stalled growth. For Excel, I might suggest the ideal client is a professional who needs to manipulate complex financial data.
LinkedIn’s ideal client is possibly a sales professional who needs to find and contact buyers based on variable demographics. They probably have an ideal recruiter customer and ideal paid platform customer too. It’s okay to have more than one, as long as they are distinct.
Your product or service needs to scratch a very particular itch for your Ideal Customer.
The Ideal Customer Has Lots of Understanding
This is the trickiest of the three to nail down. In most cases, the Ideal Customer must understand a few things about the value proposition of your product.
Going back to my friend Mike, his Ideal Customer is a CEO who needs to grow very rapidly, who understands that leadership is critical to that goal and has the self-awareness to know they might be part of the problem.
Sometimes the understanding is around the conditions that need to exist for your solution to help them out. That other consultant who helps companies with stalled growth, has an Ideal Customer who understands that restoring growth will mean making big, difficult changes to how things are running.
The understanding can also be about the trade-offs: among Ideal Customers of discount airlines, there is an understanding that the service will be bare-bones and possibly pathologically bad. Creative agencies’ Ideal Customers are prepared to trust the advice and expertise on offer, even if it feels a bit like they are handing over their brand to strangers.
Another thing our Ideal Customer needs to understand is any limitation on what your solution can achieve. They need to have a clear-eyed view of what is and isn’t realistic when it comes to your products. This isn’t limited to results; the understanding can also apply to support, how much time you are able to spend with them, how many changes they can make to projects and deliverables, and how realistic their own aspirations are for the product.
Looking at an offering like Weight Watchers or a gym, the Ideal Customer there understands that nothing is guaranteed, nothing is going to change overnight and there are requirements on their part to put away the doughnuts, turn up for class and sweat a little to make the whole thing work.
The Ideal Customer Has The Necessary Resources
This is kind of obvious but I think marketers spend a lot of time trying to sell things to people who lack the money, the time or the infrastructure to actually use their products or services.
For example, LinkedIn doesn’t make much money off people who have the basic, free service. Like other “freemium” models, theirs works because a very small percentage of their users is willing to pay to access additional features. Sales people, recruiters and job hunters fork over an extra $30 per month or more to get better data, cool reports and access to more people, and LinkedIn makes a bunch of money.
For B2B products, one of the first things a good Sales Squirrel will do is make sure their prospect has the budget to buy what they’re selling. The really excellent ones will also make sure they have the expertise to use, install and maintain the product.
A good example is a humane society I heard about where they installed a state-of-the-art ventilation system to keep the nasty germs in the isolation areas away from the rest of the animals. Problem was, the staff didn’t know it was their job to maintain the ventilation system by changing filters, turning dials and doing other things. Two years after it went in, the whole system needed to be replaced because it hadn’t been maintained. When they came to replace it, they found the box with the manuals and the maintenance videos sitting right on top of it, like a white crayon.
In the case of services, the difference between your ideal customer and the rest, will often come down to time. A client of mine parted company a while ago with their long-standing market research firm. The official reason was they didn’t see any value in the very high retainer fees they were paying. The research company, for its part, complained the client only used about 40 percent of their consulting hours. The client really didn’t have anyone managing the program and making sure they were using up all that expensive analyst time, so the apparent value for money was poor. Ideal Customers of service organizations need to have someone who is accountable to make sure the services are used and measured.
Even for B2C marketers, your Ideal Customer needs to be able to actually use your product over the long-term. Whether that’s downloading the upgrades, knowing how to maintain stuff or having the money to pay someone else to do that for them, they need to have the resources in place.
Car dealers, for example, have a lot of not-so-Ideal Customers. These include the folks who can afford the monthly payments, but who don’t have the money to service the vehicle regularly or, heaven help them, service it at all. When the car meets its premature end, the not-so-Ideal Customer is all over Facebook talking about what a piece of crap their under-resourced car turned out to be. The Ideal Customer, on the other hand, is a raving fan of their faithful ten-year-old car.
Next time we’ll look at what we should be doing with our Ideal Customers.