Not All Customers Have The Same Value

One of the most difficult questions a brand manager needs to answer when considering how to position their product is “who should the target customer be?” On the surface this seems like a pretty simple question, but in reality it is far more difficult to answer and will have an enormous impact on the product’s success.

When we pose this question to brand teams the answer is often broad and generally non- descript, meaning that anyone who may have some passing interest or a general need that the product satisfies should be a target. What would you think if I told you that not every customer is worth pursuing? Your first response was probably something along the lines of “no kidding, I learned that on day two of marketing training”. The idea here is more than just realizing that a product developed for males 25 – 34 years of age or for Ob-Gyns shouldn’t be marketed to 60- year-old woman or cardiac surgeons. The point is that not every 25 – 34 year old male or every Ob-Gyn has the same value or is worth targeting.

One of the biggest stumbling blocks to brand success is generalizing the target; creating some overall demographic identification that presumes everyone in the target group thinks, feels, and acts the same way. This is dangerous territory because the choice to select these targets is often made to simplify identification and to ensure that the market was large enough to reach the goals established for the product by the organization. We have all been there, if I define the target too narrowly, I’m “niching” the product. Worse, I will have to explain it to someone in corporate who probably won’t get it. What we fail to see is the potential higher cost and lower effectiveness of the dollars spent on what is frequently lower market share. In essence, we feel better that the target audience is larger even though we are not doing as well as we may otherwise do if we had been more specific in our target definition.

When working with brand teams to develop product positioning we push each team to identify their exact customer. Clearly define who that person is, not just demographically but based on emotional, intellectual, and functional needs; the one that will receive the greatest benefit(s) from the product. Establishing a strong toehold in the market is critical to long-term success and the better you identify your customer the greater the likelihood they will have a positive experience. You begin building your market from here. This sure beats the alternative, customers who aren’t sure the product is meant for them.

Build your market systematically; smart, precise targeting; positive experience; expansion; increased market share, and higher profit. This is the conversation to have with that person in corporate.