How to identify potential customers

This week we’re talking about identifying customers. We’re going to be deep-diving into some theory, so I really recommend that you do the further reading this week to give you a better understanding.

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Tasks

Create a profile of your ideal customer using the workbook as the basis of your exploration.
Find 5 online or offline spaces where people with over 50% of the characteristics your ideal customer congregate.
Seriously do the further reading.

Downloadable resources

Feedback

Book in a 40-minute 1-2-1 video conferencing based feedback session based on this topic's tasks.

Further reading

Attention: the new currency TEDx talk by Sree Sreenivasan
1000 True Fans by Kevin Kelly
Taylor Swift criticised for new ticket sale scheme after trying to stop touts by BBC
Beyonce's streaming strategy, explained by Trapital
Understanding Bordieu - cultural capital and habitus by Xiaowei Huang

Tools to adopt

Webinar Notes

Do you know who your ideal customer is really? If I asked you to paint a picture, could you?
Yes, that’s right, we’re going to start this off with a task. Go ahead! Do it. Get a pen and a piece of paper. Spend 5 minutes writing as much as you can about your ideal customer.

The odds are, particularly if you haven’t done something like this before, you will have written a paragraph or some bullet points that are actually very vague. For example, if you were building an afro-hair care brand, you may have said that your ideal customer is aged 25-35, female and Black. While that is true of your target market, it isn’t an apt description of your ideal customer. The key is in the terminology - “ideal”.

This session is titled, “how to identify potential customers” and you may have thought that we would focus entirely on advertising, social media strategies and so on, but those are things you can learn on your own in depth another time. Side Hustle Support is about building your business foundation by teaching you the theory and giving you opportunities to practice that entrepreneurial theory in your real life business. So, we’re taking a different approach. We’ll be working backwards.

Who are you creating value for?
One of my favourite articles to recommend to new entrepreneurs is 1000 true fans. I suggest you read the entire article, make notes and really think about the content, because once you really understand that, you’ll understand a key part of how business actually works.

The premise of the article is that rather than addressing your target market, the 25-35 year old black woman, you should address your ideal customer, identify those people and then consistently engage with them so that you can build a base of support that will always have you making recurring revenue based primarily on brand loyalty.

When I was 14, I had already been to 5 different schools, not to mention after school programs and had lived in 2 countries. I was an avid reader and so curious about things that if I didn’t understand even a little bit of something, I would have to do a deep dive until I understood absolutely everything about it. As you can imagine, that attitude meant I didn’t always have people around me that I could share my interests with because my interests ranged so widely. Well one day, my mum took me from Kent, where we lived to London to do some shopping, and then we walked into Urban Outfitters. That was the first time I felt like I could see my brain in front of me. All the weird stuff I loved or could love was in that store. I felt seen, understood and kindred in a way I hadn’t before then. So naturally, I spent a lot of my money there, and though not as much, I still head to their website every once in a while to catch up on what I may have missed.

When I was 24, so ten years later, I started following a Nigerian brand on social media and I loved their stuff. I loved their messaging, their vibe, their graphics, choice of colours, and apparently a lot of other people did too because they had lots of followers. When I heard they were going to be in London at a trade show, I immediately started making plans. My friends and I bought tickets, made the journey to the trade show, immediately searched through the entire show to find their stall, bought the products, tried it and felt a little less than impressed. As I looked at my friends who had also taken this journey based on my recommendation, I thought, this product is overpriced, not great quality, wasn’t presented with great service, yet I trekked all the way here for the experience of it, completely ignoring every other stall in the entire trade show for it, because they presented and communicated their business in a way that fit with me and my ideologies.

Everyone is using the products they use, the clothes they wear, the services they subscribe to as a shorthand for defining themselves and their beliefs. To get your potential customers, you need to know who they are and then what signals they want from you.

To be a successful entrepreneur, you have to be obsessed with the problem passionate about your solution and know your customer.
That third part is so often left out of the equation. If you don’t know your customer you won’t be able to provide them with a solution that they care to use, and you won’t be able to communicate the problem in a way that will drive them to check you out on a deeper level in the first place.

I’ve mentioned the signals customers want from you. You may want a little bit more of an explanation on that, so here it is. If you get to know what your customer cares about, outside of good service, a good product and ease of access, you’ll be able to show them that you are just like them, kindred, even though you aren’t because if you were like them you would also be waiting for someone to create a solution like the one you’ve set your mind on.

One of my favourite examples of this is the comparison between Taylor Swift and Beyoncé (especially before the Kim and Kanye thing when everyone started hating Taylor Swift). It's about the way they engage with their fans.

Essentially, they are at the opposite ends of the fan engagement spectrum. Beyoncé is never organic with social media, everything is always planned to perfection, we only know what she cares to share and everything is shrouded in mystery. At a certain point in her career, she drew a line between the fans and herself and her family, which is both sane and important. However, in a world where sharing is caring, lesser talented stars took the opportunity to form extremely close relationships with their fans to the point where they are having sleepovers at the star’s actual house. That’s one of the things Taylor Swift actually did for her fans, in every house she owns in the world, for the promotion of an album. Taylor Swift hand delivers birthday presents to her fans’ houses, she sends them private messages on twitter and Instagram if they post something that shows they’re having a bad day. Basically she goes above and beyond (or someone on her team posing as her) goes above and beyond to make it look like she cares about every single fan, that she is just like them and just got lucky with her music (completely ignoring the fact that her dad is a co-owner of the record label she signed with).

Not everyone that sees your product or service is your customer.
So, if you know that your own Beyhive are the people that are going to be your true fans. You know that they’ll buy your metaphorical album on the first day of release and they’ll share it with friends and promote it for free on their social media. So, wouldn’t you want to do a really good job of identifying who they are and who has the potential to be a true fan before they become one?

Just following on from that example, despite having a similar number of followers or fans around the world at that time, Beyonce would get 1M sales in the first week of her album drop, whereas Taylor Swift would get 8M sales in the first week. Remember, this can’t factor in things like racism because it's about their own fans.

All of them can access the music for free if they want to, so why buy it? Taylor Swift fans went harder than Beyonce fans and were much more determined to ensure that their fave knew they cared enough to buy it in the first week. If you’re into fandom culture, meaning the very organised sub-culture, which in this case we call the Beyhive or Swifties, you’ll know you’re not a real fan unless you buy the album and gift the album to a few friends on the first day of sales. Taylor Swift actually went as far as creating a platform through which fans could promote her album and buy merchandise that would grant them a “cut the queue” pass that would eventually help them get a better chance of buying a concert ticket at full price. Naturally this led to many fans buying multiple versions of merchandise as well as a really steep tour ticket, just so they can say they are the most devoted of her legion. It didn’t go down so well with the rest of the viewing public who saw it as Taylor Swift exploiting her fans and manipulating young people into spending their parents’ money.

Beyonce and Taylor Swift don’t have the same ideal customer, but they are existing in the same industry and engaging with fans in the same markets, so there are real comparisons to be made about the effect of Beyonce’s strategies vs Taylor Swift’s and how those convert via B2C sales. Maybe having read the writing on the wall, meaning, either trade your privacy for sales, or face dwindling sales, Beyonce reshuffled her strategy. Since then, she’s been focusing on higher grade items like the tours, where she can trade off the loyalty fans that have grown up listening to her and have the financial means to buy a ticket being adult professionals themselves, and B2B sales like Coachella, Netflix and so on which don’t require her to sell out her privacy as much (at least not in real-time) and still gives her the ability to build a base of recurring revenue through content licensing agreements, cross-sells and upsells.

I say all of that to say, that no matter how good you are at something, you won’t be able to sell your product or service effectively if you can’t present it in a way that the customer is accustomed to, prepared for and interested in. You have to know your customer, and know your market.

The people that actually go all in and part with their cash are the ones that see themselves in your business. There's a popular saying that if someone loves you, you will be able to see your reflection in their eyes. Well, to check that your reflection is in their eyes, you have to be looking for yourself in them. With everything that is going on in the world, the number of distractions that we have as everything vies for our attention, it is getting more and more difficult to acquire loyal customers, so they have to see their reflection quickly and clearly so that you can build opportunities to gain their loyalty as time goes on.

To get them in the first place, you have to give people a combination of who they are, mixed with who they want to be, in the form of a pair of shoes, or a bag or bracelet or whatever it is you are intending to sell. That’s the first crucial step to getting people to buy from you.

If you really want to deep dive into this type of stuff you can read up on Pierre Bourdieu’s theories on cultural capital. I warn you it is pure sociological theory and it will not reference Beyonce even once.

Do you understand the problem from your customer's perspective?
Remember, you are not your customer. It takes a lot of practice to see things really clearly from another person’s perspective, particularly one you have never met.

It may be easier if you’re an avid fiction reader. Your customer’s perspective is not a real thing, it is a fictionalised construct you are creating to help you better understand the needs of your customer. In other words, it’s like asking your imaginary friend what they think of the product or service you’ve created.

Is the product or service you are creating a real solution?
The perspective may be fictionalised, but your ability to solve the problem better not be. A real solution is particularly important to stress because if you’re not creating a solution that is sensed as effective to the customer you haven’t created a solution at all.

A good example of this is the difference between a meatless burger and a plant based burger. If you’re creating a burger for a customer, who identifies the problem as being unable to access meat substitutes, you’ll have to ask yourself the question, “what do they mean by meat substitutes”?

To one person a meat substitute is something that literally replaces meat on the plate, like grilled tofu. To another person, a meat substitute is something that vaguely looks like meat but doesn’t taste like it. To another person a meat substitute is something that looks, tastes and even bleeds like meat, but is not meat. If you don’t know the exact answer to that question, you’ve already failed their test and your ability to create a real solution will be based entirely on luck. The frustrating thing is that customers never know what they want until it is presented to them. That’s why you have to reverse engineer and decide who your customer is before the customer comes to your door.

Have you ever thought about the fact that there is usually a Starbucks and a Costa coffee within a 5 minute walk from each other. Or that there is usually a Burger King and a MacDonald’s within a 5 minute walk from each other? They basically do the same thing, so why are they so close? It's because there is a big enough market that they can successfully identify particular types of customers that are interested in exactly what they specifically are presenting. Burger King presents itself as the thinking man’s MacDonald’s whereas Macdonald’s presents itself as the cheap and cheerful alternative to a home cooked meal. There are so many brands out there selling the same thing in different packages. I distinctly remember watching a Patricia Bright try-on haul where she gets all her items from one fashion ecommerce store only to find that one of the items arrives packaged in another fashion ecommerce store’s branding. Despite the fact that it is the same thing, their ability to target their ideal customer makes the difference.

So how do you know the guy that wants a meat substitute doesn’t want grilled tofu and actually wants the Impossible Burger? It's simple, talk to me about how he grew up. Is he close to his parents? Did he grow up in a small town? Has he travelled a lot or not at all? Though those questions have nothing to do with veganism directly, they have everything to do with whether this customer is more likely to want to experiment with something unfamiliar or not.

Do you really know who your ideal customer is?
Go back to the description you wrote and let’s review. Have you been too vague about who you’re serving? Do you know what drives them, their passion, their interests, their background?

It’s so easy to lose yourself in broad strokes when you’re building your business. You’re probably enjoying thinking about the amount of people that could potentially get your product or service, without thinking about the one person who will actually get it, love it, tell their friends about it, gift it to their family members, promote it on their social media, write great reviews online about it and want to have it forever. Those are the people that you should be prioritising.

You may have noticed that our downloadable resource this week is our ideal customer workbook. Take a moment to download it and read through it. Depending on how quickly you read, it’ll take about 5-8 minutes.

There are specific characteristics that define a person.
Stereotypes exist for a reason. Don't apply them in relationships with real people, but for now, think about what stereotypes your customers adhere to that will be quick signifiers for their potential lifetime value in your business.

Make a list of all the assumptions you have about your customer and all the stereotypes you think would apply to your customer. Just get really comfortable and start writing everything that comes to mind. Hopefully you’ve read the ideal customer workbook so you know the type of stuff I’m referring to.

In the next few days fill out the workbook in as much detail as you can. Do your research and make real references to data you can find on the internet. All you have to do is get comfortable enough to know that the strategies you build to attract customers isn’t underpinned by nonsense.

Birds of a feather flock together.
Where can you find people with those specific characteristics gathered together in person or online on a regular basis?

Go back through the list that you’ve made and start thinking about the clubs and associations that could form around the specific characteristics you’ve written down.

Is it a defining characteristic that your customer is a single mother? Well, there are lots of single mother communities around the world that you can tap into. Should they be in a particular professional role, if so, LinkedIn is your friend along with formal and informal professional networking groups. For the vegan guy, maybe a key characteristic for him is that he’s really into fitness, so you need to find gyms and fitness communities.

That’s how it works, that’s how you identify potential customers.

You're on your way to success if you can identify 5 online/offline spaces in which your potential customers congregate.

This webinar was presented by:
Bayo Adelaja, Chief Do-er at Do it Now Now
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