Target market

Customer Targeting

What happens if we target a product at everyone? We can get radically different requirements, a bloated product and confusing feedback. You will find tools to model your target customers for B2C (business to customer) and B2B (business to business) at the bottom of this page.

Ideal Customer Profile

A single Ideal Customer Profile (ICP) representing similar customer needs will give your product clear direction. Selecting the right ICP to match your offering will also help you achieve the highest potential revenue. This is because when customer’s needs are met by a product they are more likely to buy it.

ICP selection during growth cycle stage

  • Start – Optimise your ICP definition

  • Growth – Prioritise a single ICP

  • Scale – Consider changing your ICP as the market becomes saturated

  • Maturity – Change your ICP to continue to grow

Why is there the option to record more than one customer persona on the canvas (not just an ICP)? You may find your product appeals to more than one customer group in the following scenarios:

  • Your product is broad enough to appeal to a wider group of customers. Perhaps you are a business-to-business (B2B) seller who appeals to larger enterprises and smaller companies. You can pivot your ICP over the medium term if one of these shows improved opportunities or is starting to fail. Keep a close eye on churn rates for the latter.

  • You may have a pricing strategy where specific tiers are targeted at different groups. You can create cheaper pricing tiers for more price-sensitive customers or those with a simpler use case who will not see value from a full offering. In this case, ensure this strategy is clear to your teams.

  • Your market may have become mature and, therefore, highly competitive. You decide to pivot your ICP to go after more profitable customers but still want to stay close to your previous target customers.

Overall, the ICP is there to focus your strategy toward achieving the highest revenue and not to ignore your customers.

Improvement versus evolution

Your offering may be like other competitors (improvement) or be fundamentally better (evolution). Having an evolutionary offering can collapse an existing market. Just consider the camera film market now, there is barely anything left since the development of the digital camera.

Transport for a family…

Market maturity stages

Understanding the market maturity stage you are entering into is key to success.

When entering mature or saturated markets, a strong entry strategy is needed. Without this, you will almost certainly fail.

This may include:

  • Better serving niche customers

  • Extensive (and potentially expensive) advertising and marketing to create an established brand

  • An initial low price that may loss lead in order to gain market share

Disruptive Innovation

By the mature market stage, established organisations will have been building for extended periods of time, resulting in their solutions growing in functional depth.

As existing solutions grow, these organisations become able to serve high-value customers with more complex use cases. This focus can leave space for new entrants to target customers who:

  1. Have a simpler use case

  2. Want a lower price

These entrants can, over time grow to capture more of the market resulting in saturation.

B2C Customer Persona

Customer personas can help us model our target customers. Where a business sells directly to customers (B2C), the product user is typically the person who is buying. Click the persona picture or this link for the full guide.

B2B Buyer Persona

Where a business sells directly to other businesses (B2B), there can be a variety of people involved. The product user may not even be involved in the buying process. Click the persona picture or this link for the full guide.