Staying in your lane: Part 3.
Find Part One of the Staying In your Lane series, How picking a lane for your business helps you grow here.
Find Part Two of the Staying In your Lane series, How to define your niche here.
The whole point of a niche is that it’s a pretty tightly defined group. This makes it easier to find them, easier to develop a relevant offer, and easier to present messages that resonate.
It’s a counterintuitive thing – to limit the number of potential customers you’re talking to. But, in the long run, it can be a better decision for your business.
The number of great customers you need depends on one thing.
How much do you want to earn?
If you say that you want 50% of your revenue to come from great customers, that means that 50% of your revenue comes from customers that aren’t great.
I’m all for dealing with people you like as often as possible – if you’re going to be in business for yourself, you may as well focus on doing it with people you like. It’s what you’d do with your circle of friends, so why not with your clients?
So, after all of that, come back to the one question – how much do you want to earn? Once you know the answer to this, it’s pretty easy to figure out how many clients you need.
What you want to earn + Cost of doing business / Revenue per customer = Number of customers you need
Your desired income will be annualised, most likely. So will your cost of doing business (which is always more than you expect). Make sure your revenue per customer is an annual amount and away you go. For example:
I want to earn $100k, and my cost of doing business is $50k. I earn $10k a year per client, so I need to have 15 customers to hit my target.
It sounds really simple (and it is) but it’s often something we don’t really think about.
The good thing? Finding 10, or 15, or even 100 really good customers shouldn’t be too hard.
How do I find my customers?
There are three steps to finding your perfect customers:
- Understand everything (I mean everything) about them
- Validate where they are
- Tell your story where they’re listening
The first step is really important – so often, marketing fails because the people communicating don’t understand the people they’re communicating to.
Understanding your customer
There are some great resources on the internet to help you understand your customer. Have a look at Customer Avatars on DigitalMarketer.com as a starting point – they’re a really effective way of organising your information. At Proposition, we use them in our consulting sessions.
Basically what you want to do is a deep dive on the customer – if you can answer all the following questions you’re doing really well:
- What are my customer’s demographic characteristics?
- What are their goals?
- What are their values?
- What are their challenges and pain points?
- Why would they buy (from me)?
- Where are they getting your information?
One word of warning – the first time through, you’ll probably put a pretty significant tint on your customer based on what you think they should be like. This is absolutely normal, so don’t worry about it when you realise you’ve done it.
Make sure you go back and change it though – force yourself to walk in the customer’s shoes. Think like them, imagine you’ve got their challenges, and find areas in your own life that are relatable for them.
Now you’ve got a list of all of the things that will enable you to find your customer, the next step is to validate.
Validating where they are
There are two types of people in this world: people who use Facebook and people who are too hard to communicate with. My point: you can identify the size of your target market pretty effectively with Facebook.
2.9 million New Zealanders have Facebook accounts. That’s good for over 60% of the total population – take out the 25% under 18, and you’ve accounted for 85% of the population. That’s a high quality population to sample.
The other great thing about Facebook is the type of information it collects. You’ve got demographics (jobs, ages, genders, families etc), interests, and psychographics (variables that account for personality, values, attitudes, goals etc). What’s wonderful about these is they can be tied quite nicely to our questions above.
You can’t use Facebook to search for these people through a standard account – but you can create an advertising account and use the various options to identify your audience. Check out Facebook’s course on audiences for more information.
Your audience size will show in the bottom right of the screen – you can use this to infer the number of potential customers in your target market. Due to conversion rates, it needs to be way more than your target number of customers – think 200 times larger. This works on the assumption you’re going to get a conversion rate of around 0.5% per year – if you do better, fantastic!
Tell your story where they’re listening
Now you’ve identified your magic number of customers, who they are, what drives them and validated that you can find them.
The next step is to tell your story (we’ll cover this in the next part) where they’re listening. Identifying where they’re listening is actually pretty easy – the last question on our list, “where are they getting their information?” should tell you everything you need to know. If they find out about things on blogs, there’s your channel. LinkedIn? Facebook? Instagram? The local golf club?
Whatever it is, pick the platform, and come ready to develop some great stories that will engage your ideal customers. The fun part is about to start!