Target, or die
Trying to sell to everyone will lead to startup failure
Your startup business simply can’t be all things to all people.
Sales success comes from serving one well-defined (and hopefully lucrative) target market. Walk through any downtown business district and you’ll see storefronts of businesses that understand the power of focusing on a niche market.
For example, in my downtown Toronto neighbourhood, there's a store selling vinyl records. Hard to believe a store selling records could thrive in this era of iPods and digital downloads. But this store has successfully tapped into a niche market of local people who prefer the robust sound that comes from vinyl records.
Unlike big companies (think Walmart) your startup business likely doesn’t have a huge marketing budget to promote a wide range of products or to engage multiple customer segments. And so you must decide which customers are most likely to buy from you and focus your money, efforts and time to reach them.
Do your research first
You can find your target market by doing your homework in the form of market research.
That may involve surveys, interviews, focus groups and product testing. Assess research results to spot patterns – you’re looking for a group of people who are the most responsive to what you propose to sell.
For example, an entrepreneur I advised held focus groups and discovered the best market for her hand-made toys to be affluent parents willing to pay for top quality toys for their children.
Test your findings
Customers often say they’ll buy a product or service, but behave differently when it comes time to actually buy it.
That's why you should challenge your research findings against some actual sales. Many startups develop a minimum viable product (MVP) during this stage in order to get feedback from early buyers. For example, you could post a simple website to test buyer interest.
Focus your marketing
Once you decide to launch, align all of your customer communications to appeal to your target market.
Make sure your logo, tagline, website, blog, social media channels and marketing materials resonate with your preferred customer. Form a small advisory team of customers or prospects who are willing to review your marketing materials as you develop them.
You're focused when you just say 'no' to other buyers
You can always add more customer segments when your business (and budget) grows. For now, keep calm and keep focused on your chosen customer niche. Your business will be stronger for it.