On February 10 2007, a little known junior United States Senator from Illinois announced his candidacy for the presidency of the United States. It was the biggest swing for the fences in US politics. Not only because he had little national recognition and popularity, but he was also a black politician. 

All odds were against him.

Yet, on November 4 2008, Barack Obama won the presidential election to become the 44th President of the United States. He did so by putting together one of the most enthusiastic political movements since John F Kennedy ran for the same office in 1959. 

Obama won the hearts and minds of the nation, but he didn’t start that way. He won it piece by piece. One enthusiastic group at a time. He built a significant part of his campaign strategy on content marketing via great speeches, email marketing and social media campaigns. 

He understood his core audience and reached them with the message they really wanted to hear. He delighted them. And then reached out to a wider audience through the core.

Everyone is not your market

All businesses without an exception want to reach everyone. To be seen and patronized by millions, to be the next Coca-Cola. It’s why new business owners say “everyone” is their target market.

We dumb down the processes, trying to please everyone. Of course, that’s not possible.

And that’s the problem.

One of the biggest mistakes business owners make is assuming their product will appeal to everyone, it won’t. Seeking to please everyone means you rarely delight anyone.

The solution is simple. Find the smallest audience that loves your product and appeal to them. Serve them and they will sustain you.

This approach is what Seth Godin referred to as the Minimum Viable Audience

“When you seek to engage with everyone, you rarely delight anyone. And if you’re not the irreplaceable, essential, one-of-a-kind changemaker, you never get a chance to engage with the market.

The solution is simple but counterintuitive: Stake out the smallest market you can imagine. The smallest market that can sustain you, the smallest market you can adequately serve. This goes against everything you learned in capitalism school, but in fact, it’s the simplest way to matter.”

This is your core audience.

To get that impact you seek, your time, energy, money and resources are better invested in the minimum viable audience – your core audience.

A lot of marketers skip this and make guesses instead. But this is what separates the successes from the failures.

What this guide will cover

The goal of this guide is to provide an in-depth but easy to follow information on everything you need to identify your core audience and customer segments.

The important questions you will be able to answer are:

  • How do you define and classify your core audience?
  • What are the right customer segmentation models for your product?

Defining and Classifying Your Core Audience

According to Seth Godin, marketing is about change. Changing people’s actions, perceptions or decisions.

Successful change is specific, which explains why mass media adverts mostly failed. They targeted everyone. Now you can no longer target everyone, you are forced to choose your audience.

The first important question is, “What do you seek to change with your product or business?” You need to confront this question. It could be a person, a tribe, the way things are done.

Do you have the answer? Because what’s what/who we will be working on.

Classifying Your Core Audience

We will assume that you have more than one answer to the question above. If you do, you need to divide them up into the three sets of people below:

  • The person that will pay you
  • The person that influences the person that pays you
  • Your supporter

The first person on the list, the one that pays you is your main focus. If this first list comes up empty, it’s safe to say you may not have a business.

Having this person(s) is not enough. There are certain questions that need to be asked. Answers that need to be had. These answers are your product specifications. This is what you build for.

You need to be clear about:

  • What does this person already believe?
  • What are they afraid of?
  • What do they assume they want vs what they actually want
  • What is their story? What stories have they identified with, in the past?
  • Who do they follow and look up to?
  • What is their relationship with money?
  • What channel do they love? The messages they identified with, where do they come from?

By answering these questions, you have created a customer persona. A very distilled version of your target customer.

See a sample below from Single Grain

To fully grasp the power of your customer persona, you need to take all of these big-picture data from the answers you have provided above and make it personal. Essentially, create a profile of a single customer.

If you have built a product already and it does not match the needs of this customer, go back to the drawing board and create a product, service or story that works.

There’s no point changing the answers to match what you have already made. You can change the audience of course, but you can’t change the truth of what they need.

Regardless of how you decide to approach this, you must Identify the person who determines if you get paid.

Customer Segmentation Models

“Segments must be be Measurable, Substantial, Accessible, Differentiable, and Actionable.”

Customer segmentation is simply dividing your customers into groups of individuals that are similar in specific ways relevant to marketing, such as age, gender, interests and spending habits.

If you don’t segment your audience, you will end up appealing to bystanders, which makes so sense whatsoever because the bystander is not interested in what you are selling. 

In the 2016 American presidential elections, the non-voting bystanders were in the majority. It would have been a waste of time campaigning to these set of people. They were never going to vote.

So how do you segment your customers?

Segmentation is far more extensive than demographics or gender. It stems from person to person communication, and it comes from activating people who are ready and willing to be activated.

The order of action is almost set in stone. When you have customers, profile them, duplicate them, group them and engage them.

#1 Segment Based on Touchpoint Engagement

For example, if someone made a first-time purchase from you two days ago and has visited your website 5 times within the last two days looking through your help articles – this is a big retention signal you want to address.

You can deal with this by creating a segmented email campaign to onboard this user (and others who fall within the same category). Doing this prevents him from giving up on your product too soon and preparing him to make another purchase should you have something else you want to sell.

This segmentation model is great for learning about customer behaviour and interaction with your business. Study the different touchpoints people have with your brand after making their initial purchase. 

Segment similar behaviours and activate marketing campaigns solely for them based on that behaviour.

#2 Segment Based on Buying Patterns

Sales patterns are great for building segmentation profiles. You can segment based on buying patterns through the following questions;

  • What did this customer buy in the past?
  • When did he make the purchase?
  • How did he make the purchase?
  • Who are your most frequent shoppers?
  • Who are your highest value customers?
  • Who are the savers? (they always want discounts)
  • What motivates them?

Definite answers to these questions can yield customized models for your business in the future. When you know these answers, you become better at guiding them towards an offer, the next step of the perfect product for them.

This model is the shortest path you can take to retaining your customers. For example, households generally reorder FMCG like detergents regularly. In that case, segment your customers by how frequently they buy, their fragrance and size preference, to guide them towards their next purchase. 

The key is to create segmentation goals based on their buying patterns.

#3 Segment Based on Customer Goals

Earlier on in this article, we touched on identifying your core audience and their customer personas. This is the tactic that brings multiple types of data – demographic, geographic, behavioural, goals, passions, aspirations – into a wider profile built around specific goals.

By providing answers to the questions asked early on, you are in no shortage of data.

Are there groups of your customers who share the same passions? Does your brand attract a specific generation? What are the specific wants of this generation? 

Conclusion

Identifying and segmenting your core audience gets you deeper into your customers wants, needs and goals. For each layer of personality, there’s something you can cater to. The deeper you go, the more personal your marketing will get and the closer you’ll get to your retention goal.

We will deep dive into some of the issues raised in this article during the monthly webinar.

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Growth is the only essential thing you need to be a startup. Startups are created to grow fast. Everything else that happens within a startup is a derivative of growth.

Everything – ideation, product validation, product management, team building, fundraising – follows from growth. Without growth, early stage startup is just a small business losing money.

That is why founders are encouraged to focus on one metric – the one that matters. This is because, as a startup, your limited resources are a deterrent to wasting your time trying different things.

Depending on your type of business, growth will mean different things to different startups. And your one metric that matter changes over time. Getting rid of distractions enables you to focus your already limited resources – people, time, and money – on the one thing that moves the needle.

What is the one thing that signifies that your business is growing at a particular point in time?

In the beginning, growth for a lot of startups has more to do with user acquisition and engagement than revenue. The advantage of defining your growth metric is it tells you the most important thing about your startup and how should drive it.

You need to consider the followings when choosing your growth parameter.

1. Your business model

The way you monetize your product is an indication of the value that will be created by your business. It’s not always about the money, but revenue metrics provides a standard benchmark for growth metrics.

2. How you acquire your customers

The rate at which your products gets into the hands of users is a substantial measure of how scalable and successful your product can be. Inherent in the DNA of startups is the ability to build products that have the potential of being ubiquitous and viral within a short time frame.

That is why most startups are tech-enabled companies because technology enables innovation not just in the way products are made, but how they are distributed. You can measure your growth based on metrics such as unique web visits, page views, app downloads, partner signups, user signups, conversion rate, churn rate, etc.

3. The stage of your business

The stage of your company will determine what to focus on. Early stage business should be obsessed about metrics that validates their product-market fit more than mid or late stage companies.

In the beginning, your growth metric is based on time-based milestones you need to reach such as partnerships, signup at a particular time, user signup rate, number of feature releases, etc. It is important that you wrap this with specific numbers as much as possible to measure progress.

4. How you measure growth

Answering this question will help you make right decisions. Let’s assume you decide to measure your growth by the number of subscribers to your email list. First, you’ll have to optimise your product, website, app, content and every potential user interactions to grow this list.

You then measure the results of all your actions on a regular basis against this metric. You hold yourself and your team accountable with data and see whether you are making progress or not. You deep dive into all your acquisition channels to identify where you are getting the most number of subscribers. You look at the numbers every day and experiment with various tactics and tools to see how you can grow the subscription rate.

As you focus on a particular growth metric and optimise your products accordingly, magic happens. You identify particular big hairy destinations to drive your startup towards and you can measure the how and the rate at which you are getting there. And as you grow, your goal may change, and you redefine your growth metric.

You build, you measure, you learn.  And you continue the cycle until you reach your true north.