Growthink Blog

Try Serving Fewer Customers

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When launching their business, or launching a new product or service, many entrepreneurs dream big. They picture tons and tons of customers buying their products or services, and sailing off into the sunset. Now, the dream of massive success is great. But the strategy is generally flawed.

Here's why: these entrepreneurs typically believe that every man, woman and child will want to buy their product or service. So, when asked "who's your customer?" they say "everyone."

There are two problems with this answer. The first is that marketing to "everyone" is really hard and expensive. Sure, occasionally you have companies like Facebook and Groupon that enjoy organic growth via viral word of mouth. But this is rare. For the rest of us, marketing to "everyone" costs millions of dollars.

The second problem is that when you try to serve too many customers, often times you don't do a great job serving any single customer. That's why there is the following great saying: "When you try to be everything to everyone, you end up being nothing to anyone."

Even behemoth Walmart is not everything to everyone; there are many folks who have never stepped foot in a Walmart. And clearly the retailer doesn't target the upscale market. What Walmart does well is picking one large customer segment (customers who want low prices and high value) and serving them very well.

So, the solution is to target a smaller audience and serve it really well.

In doing so, a few things will happen. First, you will be able to more effectively market to the needs of your smaller market and gain revenues and profits. Second, even without specific marketing, you will undoubtedly serve some customers outside of your target market (e.g., while not their core audience, upscale customers do occasionally shop at Walmart). And third, via brand extensions, you can always target additional customer segments later.

So, more specifically, here is my 3-step plan to achieve more success with any new company or product/service by focusing on fewer customers.

1. Pick a more narrow market. Make sure to really define your target market. Understand that it is better (and easier) to achieve a 20% share of a smaller, more defined market, than a 0.1% share of a huge market.

2. Leverage the 80/20 rule. The 80/20 rule states that 20% of your customers will result in 80% of your sales. Figure out who these 20% of customers are. And then focus on attracting them.

3. Create an avatar based on the 20%, and speak to that avatar. An avatar in this case is a person who embodies the characteristics of your ideal 20% of customers.

Once you have identified this avatar, market your company as if you were speaking one-on-one to the avatar. By doing so, you will better speak to the needs of your customers.

Let me give you an example. Growthink's customer avatar is a man named Rick. He's a 41 year old entrepreneur who is looking to grow his company. He has a wife and two young kids and enjoys running and cycling.

So, when I write this blog post or do advertising, I have Rick's needs, thoughts and desires in mind. And as a result, I am better able to attract and serve him.

Now, you might be thinking, Rick really only represents one customer of ours. Because it would be pretty rare for another customer to embody the exact same attributes as Rick (e.g., 41 years old, likes cycling, etc.).

But that's ok. The message I give to Rick, also resonates pretty well with Mary, a 58 year old entrepreneur with two college-aged kids, and Tony, the 22 year-old single entrepreneur as well. Etc.

But, my message to Rick does not resonate with non-entrepreneurs (who could buy and benefits from several of our products and services, but who are not worth targeting from an ROI and focus perspective).

When you market to a faceless group of target customers, it's hard to really speak to their needs. By creating an avatar and giving your customers a face, you can serve them better. You can think about what's bothering them, and what their hoping for. And then you can give them solutions.

In summary, you need to start by thinking small to achieve your big dreams. Start by defining and better serving a smaller group of customers. And parlay that into more customers and market segments. By doing so, you will achieve greater success!


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Jay Turo

Dave Lavinsky