The Ultimate Guide to Creating an Ideal Customer Profile

Demographic criteria

By Hector Cisneros

You ever wonder why some businesses just take off and others just languish, not growing at all? What if you could focus all your marketing efforts towards the right area of town or region of the country? What if you knew how your best customers’ shop, where they live, how much they earn, what motivates them and why they buy your products? This would in essence pinpoint who your ideal customers are.  From there you could quickly deduce how to entice them to buy from you.  In this article, we will explore the importance of understanding your ideal customer profile. You will learn how to conduct research to gain insights into their demographic and psychographic attributes. You will learn how to target prospects by setting up better marketing based on these attributes. More importantly, you will better understand the significance of testing, measuring and picking the right marketing medium for your budget. 

One of the most fundamental marketing elements that few small businesses grasp is that of the ideal customer profile (aka ICP). Knowing your ideal customer grants you the power of focus. It gives you the ability to concentrate your marketing and advertising message so that it targets the right people. Understanding whether your customers are mostly male or female, rich or poor, have a large family or are single, discretionary income, where they live, profession, and education level, etc., allows you to target the your marketing message. Knowing who your ideal customer is by understanding their demographic/psychographic vital statistics can bring you closer to them. It allows you to perfect your product and your message so that it fits like a glove. This perfect fit is a very powerful competitive advantage. Once acquired, it is a weapon you can use to win the marketing war. Let me elaborate.

Courtesy of  wikimedia.org

For example, if you know your average client is 42 years of age, has 4+ years of college, is female, makes 59 thousand dollars a year, is married and has 2.2 children and lives in a specific area, you can then target media outlets geared for women of that demographic.  If you know even more information like what TV shows, music and books she reads, you have even more places to place your message.  If you're placing ads on internet properties, you will include keywords that match things that are important to her (her children, her profession, etc.) and place them on radio stations that play her music type and internet sites like Facebook where you can target her psychographics as well.

About 30 years ago I was tasked with managing the advertising budget for a ComputerLand franchise of which I was the manager. I had recently moved to Jacksonville, Florida and I only knew a little about the population in the area. Back then, advertisers like the local radio and TV stations would call on me and they would tell me about Nielsen ratings of the shows as well as the demographics of their audience. I was told that my target audience was 35 to 54 years of age and that they had a medium income of 45 thousand etc.… At that time I had no idea if any of it was true, and could only hope they were right. Luckily for me, my store already had a client base of 300 plus customers and we held a regular user group meeting at the store.

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I took it upon myself to look through the customer files to put together what I thought was a list of ideal customer types. I began my search by asking my employees, which customers they considered to be our best customers. I also asked the other store owners what they thought.  I created a profile sheet for each customer. I  filled them out as best I could and placed them in their file. At the same time I also started to group them by what I consider their demographic.  If you read lots of articles today about market segmentation, you will find hundreds of criteria. This is a good place to start when creating your own profile worksheet. Now I am not asking you to build one from scratch. I don’t want you to reinvent the wheel. All I want you to do is to adopt one that already exists.

One of my favorite profile worksheets is the Mackay 66. There are many such profile models that I like. Here are some links to some templates and articles that provide such profile models;

• Find Your Ideal Customer Profile, By Aswin Natarajan
• Creating ideal customer profiles by Steve Johnson
• Customer Profiles and Buyer Personas: Know the Difference, Know Your Audience by Troy Irland.

The notes page that goes with this article and the BlogTalkRadio show  about this subject has other examples,  links and other information you can use.

For some, creating an ideal customer profile is not enough. They believe (as do I) that you

Courtesy of  convinceandconvert.com

should take the customer profile one step further. You should build an ideal customer persona. That is to say, build a detailed and highly focused profile of a fictitious ideal person by fully understanding all their demographic, psychographic, and motivational attributes, for every product or service that you sell. You then use this profile as a benchmark for employees to focus on. It allows the salespeople to go after the right prospects, production is making the right product/service and customer service and support is taking into account the needs of that particular persona. This helps the entire team to all move in the same direction and in general produces synergy that exceeds other  approaches I have seen. Along with the other links provided in the Notes Page of this blog, I recommend reading, "How to Create Customer Profiles to Reach Your Target Audience" by Greg Ciotti. It provides many examples that you will find useful.

An important factor that is often overlooked by small businesses is the relationship between the profitability of your product/service line/s and that of your ideal customer profile. It is quite possible to do all this research and find you have chosen the wrong product/service to sell to what you consider your ideal customer profile. Conversely, you may find you have a great product, but your marketing it to the wrong people.

It's best to first determine what is your most profitable product/service (what you want to sell) and then determine who the ideal customer for that item is, instead of marketing all your items to determine the type of product/service and  customer that rises to the top. All things being equal, find a product or service that you want to provide, that gives you the most exclusivity, meets a current need, is  in demand and is also very profitable (this can be a tall order). If you have a product or service like this in your stable, that's the one to match your ideal customer profile.

Once you have a profile worksheet, it's time to roll up your sleeves and get to work. In the rest of this article, I want to focus on how to find the information you seek.  Here is a list of nine ways to find useful information when creating an ideal customer profile.

#1). Start by looking at your existing customers. Who buys the most from you? Find your top 10 to 20 customers and analyze their demo and psychographics. Ask them why they buy from you. What compels them to seek you out. Use the ideal customer profile models we talked about earlier (like the Mackay 66 profile) to better understand who they are and more importantly what motivates them to act.

Courtesy of  morguefile.com

#2). Send a survey to all your customers. Ask questions like what are the most important reasons they purchased your product or service. Ask them as many questions as you can about what's important about your company, product or service. Is it the speed of delivery, the location, or the distance they have to travel? Is it all about product exclusivity? Asking your existing customer base these questions can tell you a lot about your ideal customers.  When I was managing at ComputerLand I created a survey for the computer user group that met at our store. These were very motivated and enthusiastic customers and their answers gave me many insights into their motivations.

#3). Ask for media demographics, it's free. Earlier I told you that media companies like Radio, TV, newspaper and magazine companies can bring you lots of demographic information you can use. This is not a bad place to start. These companies will gladly  provide you with this information if you're willing to sit through one of their sales pitches.

#4). The Internet is a valuable tool.  Today, we have the internet. A search on the internet can yield lots of useful information. There are many websites that provide consumer and business statistics. For example; you can do a search for “what is the average age of computer buyers” or “what is the average distance a person drives to buy groceries” and “How much does a business spend on marketing”. Clicking on these examples will show you what I mean. The information and answers you can find are almost endless.

#5). Social media A/B testing is easy and cheap. You can use A/B testing in social media. A/B testing is where you create two different ads that market to your perceived target audience. You can also use social media effectively by running these ads simultaneously to not only figure out what ads work best, but also by running the same two ads targeting different audiences (market segments) to verify who is your best target audience. If you have a Facebook or LinkedIn account, you can run these test ads very inexpensively (in many cases for as little $1 a click). Many social platforms today offer built-in analytics and offer pay per click advertising. So you're not just limited to Facebook and LinkedIn.

#6). Don't forget to use AdWords as an A/B test bed. You can run similar A/B tests on Google AdWords. Of course Yahoo and Bing have their version of Pay Per Click. However, these services work best when you create landing pages so your ads will measure more that just click through rates. The landing pages can be blogs, social or video pages as well as websites. Again, these pages will also allow you to measure the success of your marketing message and conversion rate as well.

#7). If you don't want to do the work, sub it out. Earlier I said you can use media companies to provide you with useful information. Another way you can find this information is to hire a consultant or a media company to do your research for you. There are many companies that provide market research who do not sell marketing services. These companies usually provide the most objective results. However they can vary in price substantially. Expect to pay anywhere from several hundred to several thousand dollars depending on how comprehensive the research and final report is.

#8). Ask for a competitive analysis from your vendors. Another form of market research is what is called a competitive analysis. Before accepting a company as a client, we  “do a free, competitive analysis of the “prospects current web presence”. We look at how they are using the internet to market their business. It's our belief that before we can propose any marketing solution we need to understand the prospects current position and goals.  We ask 15 key questions to analyse their on-page SEO, as well as the dynamics of their blogs, social nets, videos, landing pages and more. We also look at their competition to determine their strengths and weaknesses.

#9). Get a business coach to help you. Going it alone is always an uphill battle. We believe that maintaining objectivity in any business endeavour is extremely important. That’s why we hired Steve Goranson of ActionCoach Intl., to be an objective outside pair of eye and ears to keep our egos in check. We run all of our marketing efforts (business plans in general) by him just to have someone not vested in the idea look over our logic and stats. Here is a recent article Steve wrote about this subject.

Here in Northeast Florida, we also have an organization call Marketing Matters that provides great coaching for new and existing woman and minority own business. Their program allows these businesses to go through a program that teach these owners sound marketing practices and provides them with mentors to help them through the process. Part of their process is to create an ideal customer profile and persona. This gives these businesses a leg up on the competition, but only if they really put their heart and soul into the effort of creating their own Marketing Matter's detailed plans. Here is their Facebook page if you're interested.

What's Next? Placing your marketing message.

Courtesy of  pixabay.com

Once you have defined who your ideal customer/s is, it’s time to create a budget and select marketing venues. Creating a budget first is critical. Also, don’t run on the assumption that the marketing you select will produce the revenue needed to pay for the ads. This often is not the case. Your budget needs to be money you have on hand, in case it doesn’t work. Make sure you match the advertising venue with the attributes of your ideal customers. Ask the media vendors to explain how their product services your ideal customer. If it sounds like a stretch, it is! It's quite possible that the marketing being offer exceeds your budget. If so, don’t gamble, stick to your budget. You may have to find other revenues to do your marketing if your budget is too small. Other options may include trading service or getting a loan.

If you want to improve your marketing results, you must also understand that the marketplace is not static. It evolves over time. 10 years ago we did not have social media and Internet video was nowhere near as popular as it is today.  New media evolve to match consumer and business tastes. Even older media have had to evolve to stay in the game. Notice that TV, radio and print advertising today, almost always provide connections to a web address. A decade ago, this would never have happened. Along these same lines, internet media also evolves quickly.  For example, when Facebook first emerged as a phenomena, it was mainly populated by college students. Today the average age of a US Facebook user is 40.5 years. Subscribers  also varies by region, country and generational attributes as well. Today you will find more young people using Snapchat and many millennia using Instagram instead of Facebook. 

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Most businesses engage in advertising. However, most small business (under a million in sales) don’t engage in much market research. Prior to the turn of the 21^st century, conducting most kinds of market research was very labor intensive and expensive. Today, small businesses have many avenues to gather important market research. More importantly, they can do this at an affordable price. However, most small businesses ignore the avenues listed in this article and continue to fly by the seat of their pants instead.  This is unfortunate, because this pin the tail on the donkey method of marketing costs them much more, than actually doing the research in the first place.

In this article I have discussed what an Ideal customer profile is, how to create one and most importantly, how to gather this valuable information so that it allows a company to market more efficiently and thus be more prosperous. This article provides many useful links to existing ideal customer profile models and nine ways to gather customer demographics and other market segmentation information. This allows your marketing message to be focused like a laser on the right target audience.

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Thanks for visiting. That's my opinion, I look forward to hearing yours.

If you found this article useful please share it with your friends, family and co-works. If you would like to learn more, visit the notes pageon this blog for the BlogTalkRadio show dated 7/14/2015. I recommend checking out "Understanding the Difference Between Branding, Marketing and Advertising" or "The Evolution of Internet Advertising".  You can also search for other related articles by typing in “marketing or advertising” in the search box in the upper left hand corner of this blog.

If you'd like a free copy of our eBook, "Internet Marketing Tips for the 21st Century," please fill in the form on the right hand side bar and we will give you immediate access to it. Your information is always kept private and is never sold.

Hector Cisneros is COO and director of Social Media Marketing at Working the Web to Win, an award-winning Internet marketing company based in Jacksonville, Florida.  He is also co-host of the weekly Internet radio show, "Working the Web to Win" on BlogTalkRadio.com, which airs every Tuesday at 4 p.m. Eastern. Hector is a syndicated writer and published author of “60 Seconds to Success and co-author of Working the Web to Win.”

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