The Ideal Customer

Who should you do business with?

Businesses often times fail because they do not define their ideal customer. This  failure can lead to the mistake of trying to be all things to all people. Without knowing who it is you will service you will find yourself engaging in transactions that do not take your business toward its long term goals. An example of this would be be doing business with single transaction customers that are costing you money because the product and marketing cost to acquire them is higher that the revenue you make from the first two transactions.

To avoid this issue answer the following questions about your ideal customer. Bear in mind important issues such as transaction costs, marketing costs per customer, and other like factors when answering these questions. The profile you are creating must be grounded in reality in order to work and there must be a match between the products and services you are offering and the customer’s wants and needs, so it’s important to have that aspect of your business planning done before you take this step.

Questions to be taken into consideration when defining the ideal customer:

  • What will be the life of the relationship with the customer and how long will we do business with ideal customers?
  • Will they use our product on a reoccurring basis? If so how can the frequency be projected as a cycle time?
  • Are they selective about who they do business with?
  • What level of feedback do they desire in terms of problems and progress?
  • What level of trust do they want? Do they demand honesty?
  • What are their expectations about product and service delivery and is it important that those expectations be realistic and practical?
  • Do they provide payment in full on a timely basis?
  • Do they respond to our requests?
  • Do they desire the latest innovations or traditional tried and true solutions?
  • What value do they place on innovation?
  • Do they provide testimonials?
  • Do they provide referrals?
  • Are they a long term customer?
  • Do they prefer fixed term contracts?
  • Do they question the accuracy of invoices?
  • Do they trust our advice?
  • Are they cooperative and easy to work with?
  • Do they appreciate a job well done?
  • Do they use us as a provider of choice?
  • Do they provide a high degree of transparency?
  • Are they realistic about the expected results?
  • Do they appreciate personalized service?
  • Are their any other attributes that are important? If so list them.

Grade the answers:

Once you have answered these questions grade each answer for importance on a scale of one to ten where one is least important and ten is most important to the success of the business. This will help you determine the ideal customers key attributes that are most important and which ones don’t matter.

Use the results:

Now you can list the attributes of the ideal customer and rank your current customers according to them. You may find that your existing customer base does not fit this criteria and that you need to migrate your clientèle over to where you will be most effective.  You’ll want to update your marketing material to attract this type of customer. The idea here is to position yourself in a nitch that works best for you and your customer and then over-deliver on the attributes that are important.

Your thoughts?

– Joel




Author: Joel Caton

Business Consultant and Web Developer from Meridian, MS