There’s nothing more unsettleing for me than when someone doesn’t want my product and I don’t understand why.
Lost revenue is never fun, but it’s of secondary concern when a sales conversation or a market research interview casts doubt on what I believe about my market. It throws me for a loop, and I usually process it in three stages:
- Oh sh–.
The Ugh is the realization that I’ve missed something. Like a faulty mathematical model, I’ve either misjudged or completely missed important variables. Either way, my mental map is incomplete; it’s disturbing.
Longtime readers of this blog may wonder if this is the part where I recommend talking to the market – and it is – but I’d urge you to reflect on whether your team might be making a mistake we encounter regularly with product teams who reach out to UserMuse for help.
How’s Your Target Market Doing?
Picture your ideal customer. What are the most important parts of that customer profile? What makes them a great fit for your product?
A disconcerting percentage of the product teams who reach out to UserMuse think of their market in terms so broad that struggle is virtually guaranteed. It’s to be expected from startups who are still asking big questions like this. But I’m surprised by how many companies make it to adolescence and beyond with still-vague ideas of who their ideal customers are.
We see it in the requests that we get to create market research panels for our clients. Occcasionally there’s a good reason for targeting a very broad swathe of the market. More often than not, I grimace when an inbound request looks like this:
“Target customers: Digital marketers at companies with more than 500 employees.”
Easy for us to fulfill? Yes. But the odds of the product manager or UX designer getting what they need from a study that broad are low. An iterative process usually follows to help the requestor reach greater specificity in their target customer so that can run an effective study.
By contrast, here’s an actual request we received, lightly edited to protect the client’s identity, which gave us much more hope that they (and we) would be able to deliver something of value:
“Target users are small and medium-sized business owners or experienced employees. The business should have more than three employees and more than $500K in annual revenue. They must use <product name and edition> to manage their accounting and finances. Additionally, they must have linked at least one of these xxxx credit cards to their account to track spending within the application. Individuals must be highly proficient with either <product name> or one of these xxxx competing products. If not an owner, the individual must have insight into finances and ideally responsibility for paying bills.”
While you might think at first glance that the product team with the very broad persona has the more successful product than the narrowly focused team (broader = bigger market, right?), the opposite is almost always true.
If you’re worried that your target customer definition might be too broad, here’s a laundry list of questions to think about that will hopefully inspire some hypotheses of your own that you can test in your user interviews:
- Which roles need to be filled for us to have a potential buyer in the building?
- What are the ideal job titles and responsibilities we’re looking for?
- What other systems or solutions must must the customer have in place?
- What solutions must they not already have in place?
- How many people potential users do we need in order to have viable opportunity?
- What problem(s) must they be experiencing currently?
- What else (besides the main problem) does the ideal customer believe to be true about their business?
- What’s the minimum budget the department I’m selling into must have to afford our product?
- What corporate initiatives must be under consideration, in progress, or completed already?
- What internal processes need to be in place for them to get value from our product?
- Is our ideal customer’s business growing or slowing down?
- How technically savvy must users be to get value?
- Does our ideal customer want self-service or lots of help from us?
- How frequently would an ideal customer realistically need to use product?
…to pick just a few.
Before you start worrying about overfitting or getting too narrow, remember that it pays to be precise. For whatever reason, the metaphor that comes to my mind for market segmentation is Paul Sorvino’s character in Goodfellas painstakingly slicing garlic with a razor blade to make spaghetti sauce.
Hey, whatever works for you.
Create your own panel of target customers on UserMuse HERE