Target Market

What is our target market – people or companies that we have identified as the most likely to have a demand for our products and services. What are the characteristics of our ideal customer?

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Clarifying Your Products And Services, And Your Customers

In today’s coaching session I would like to talk about Your Products and Services, and your Customers,  the first two items in Step 3 of your business plan –

Step 3 is what we call the “building blocks” of your business plan. In order to plan ahead, it’s important to be clear where you are now, so let’s make sure we have a clear understanding of what we are selling and who is our ideal customer.

This can get a little confusing and there are a few differences if you are in the Business to Business market or the Business to Consumer market. I will address this topic today using the Business to Business context.

The ideas are equally applicable to the Business to Consumer world, the main difference is that Business to Consumer companies tend to have higher numbers – more products and services and more customers. So keeping track of these details can be a bit more challenging, but the principal is the same

It’s helpful to talk about these two topics together- what you are selling and who you are selling to, are obviously interrelated.  However, to simplify the task, we separate the two ideas, then think about the changes you want to make to either or both, going forward.

As with all the other parts of your plan, it’s important to continuously clarify What you are selling and Who you are selling to

The intent here is to ensure you are offering  products or services that  are truly NEEDED by your customers,  and also  to keep you focused on the most important clients, the ones  most likely to buy, and the most profitable to your business

In the B2B world it is common for companies to sell through agents or distributors as well as directly to the end user. If that is true in your case we recommend that in  this section of your business plan you think of your customer as the end user. The next section on Partners and Alliances is set up to capture information about your relationships with agents, distributors, and suppliers (if, for example,  you are selling products manufactured by others)

I’ll use Plan Genie as an example of what this section of your plan could look like.

Let’s start with PG Products and Services:

Here at PG, we have only 2 products we sell, the basic PG web based work book and our White Label version of PG, which we sell to organizations.

Our current fee schedule includes a an annual  license fee and a renewal fee.

Our business is fairly simple to describe –  we have two products and a simple fee schedule. Yours may be more complex than that.

Now that we have a clear picture of our products and services, let’s turn our mind to who we are selling to, a description of our customers

Again, I will use PG as an example of how to approach this

Our ideal client looks something like this:

A company or an individual that

  1. Has recognized the need for an ongoing, working business plan
  2. Is ready to invest the time and money in this work, if they can find the right product
  3. Wants to learn more about running a successful business
  4. May want to do it themselves, or open to invest in a coach/consultant to help
  5. May have tried to write a BP in the past, but were not happy with the result
  6. Understand the need to work “on” their business as well as “in” their business to enjoy long term success and satisfaction
  7. Sincerely want to improve the communication with their employees and other stakeholders
  8. English speakers only
  9. Unlimited by geographic location since the product is web based

Few new prospects will tick all these boxes but if they meet even 2 or three of these criteria they are viable future customers and worth spending time on.

So, that is a quick look at describing a target customer for your busines. Getting clear about your target customers impacts so many things about your business, from your marketing plan to future growth opportunities.

I’d like to make a comment  about secondary markets:

In our business we are also looking for prospects that meet criteria for our Secondary Market

We define our Secondary market as:

  • Companies, organizations that are required to prepare and update a business plan as part of a contractual agreement with a parent company or business partner
  • And may have some of the attributes mentioned above

An example of a prospect in this secondary category is someone who has a loan condition or lease agreement that requires a written business plan be submitted at least annually

And we have yet another set of criteria to describe our target customer for our white label product.

(For our White Label product, we have defined 6 broad market sectors that are.

  1. Industry Associations
  2. Business consultants/Coaches
  3. Franchisors/Independent Professional Sales Organizations
  4. Accounting/legal Firms
  5. Lending organizations
  6. Business Trainers, educators

Then, within these sectors we are looking for those organizations that:

  • Believe their client base will benefit from working form a written plan
  • Offer educational support and other business tools to their clients)

As you can see, this work can get fairly detailed as you drill down and think through these questions. You may want to do some of this work off line using a spread sheet or other formats and bring the summary information back to your business plan.

As you work on your business plan over time, you will get clearer about these two concepts and it will cause you to be more proactive in making changes to your product lines, in tune with your customers’ changing needs. This baseline information is the starting point for innovation, your key to long term success.

By the way, this is a great place to involve your employees, once you have a draft document started.

Good luck and let us know if you need any help along the way

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Customer vs. Partner

In the business to business (B2B) world it is common for companies to sell through agents or distributors as well as directly to the end user. If that is true in your case we recommend, for this section of your business plan, you think of your customer as the end user. The next section on Partners and Alliances is set up to capture information about your relationships with agents, distributors and suppliers.

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Who do you sell to? Who is your target audience?

The intent here is to keep you focused on the most important clients, the ones most likely to buy, and the most profitable to your business and to ensure you are offering products or services that are truly NEEDED by your customers.

It’s helpful to talk about these first two topics together – who you are selling to and what you are selling are obviously interrelated. However, to simplify the task, we separate the two ideas, then think about the changes you want to make to either or both, going forward. Documenting this information in specific and clear terms provides a reference point for the action plans that follow in step #4.

For example, your marketing and sales plans start with a clear understanding of your target market, those indi- viduals or companies who will have the greatest need for your product and services. This may seem obvious, but I find that many organizations do not have this information readily at hand and in a format that everyone in the company can understand.

As you review and revise this information on a regular basis, you and your teams will better understand who your best customers are, and what changes you need to make to your products and services to continuously add value for them. This document will become a useful record as you evolve your business over time.

As with all the other parts of your plan, it’s important to continuously clarify What you are selling and to Whom you are selling. This is a good place to involve a wider circle of employees to put this information together. The test of this document is when everyone in the company can recognize a potential new customer and know how to categorize a new lead. – and to know who isn’t a likely prospect, so you don’t waste time and effort there.

Depending on the size and scope of your business, you may have a relatively short criteria list or it may require a matrix or spread sheet to clearly explain your current situation.

Note: as you get more clarity in this section, it may influence your thinking about your Unique Business Proposition and Purpose. With Plan Genie you can quickly move back an forth from one section to another to refine and improve your document.

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Why You Should Gather Information About Your Current Business Situation

We will look at Step 3 of your Business Plan; gathering some baseline information and documenting where you are now.

This is information about:

Your Customers  –  who you sell to, who is your target audience

Your Product and Services, and how you charge for these

Your partners, alliances and influencers

And

Your Competitors

Documenting this information in specific and clear terms provides a reference point for the action plans that follow.

For example, your marketing and sales plans start with a clear understanding of your target market, those individuals or companies who will have the greatest need for your product and services.

This may seem obvious, but I find that many organizations do not have this information readily at hand and in a format that everyone in the company can understand

As you review and revise this information on a regular basis, you and your teams will better understand who your best customers are, and what changes you need to make to your products and services to continuously add value for them.

This document will become a useful record as you evolve your business over time.

Let’s start with Your Customers.

The intent here is to clearly articulate the criteria of your target customer. Depending on the size and scope of your business, you may have a relatively short criteria list or  it may require a matrix or spread sheet to clearly explain your current  situation.

This is a good place to involve a wider circle of employees to put this information together.

The test of this document is when everyone in the company can recognize a potential new customer and know how to categorize a new lead. – and to know who isn’t a likely prospect, so you don’t waste time and effort there.

Next, Products and Services/Pricing,

Look at the array of products and services you currently offer, and how you charge for these.

Again, put this information in a format that is easy to understand, both internally and, more importantly, for your current customers and prospects.

Are there any immediate changes you need to make to your current offerings, or pricing strategy? If so, make a note here and transfer an activity to the action plans section later in your business plan.

By the way, when was the last time you asked your customers about their changing needs?

A disciplined, quarterly review, of your business plan, will keep your service offerings fresh, profitable and ahead of your competitors.

Partners, Alliances, and Influencers.

This section captures important information about the companies and individuals you rely on to run your business and deliver on your promises to your customers. These may be your suppliers, or other service providers who have an impact on your business.

The intent here is to assess these relationships and build more productive ones in the future.

We start by looking at the criteria for a productive partner or business alliance, What do you need from a business partner to ensure successful results?

For example,

  • Are their business needs aligned and complementary with yours?
  • Are they open to sharing information about clients?
  • Do they have the same or similar corporate Values?

What other criteria can you use to identify a solid business partner or alliance to ensure your company is successful?

In this workbook, the distinction between partner and alliance is a matter of degree – a partner is a much stronger connection and usually will have a contractual arrangement

An alliance is less intimate connection, and may be seen as a potential future partner

Influencers are people or organizations that can “influence” potential or existing customers – both in a positive or negative way. It’s helpful to recognize these sources, and from time to time, invest some energy in building these relationships.

A good example of an influencer is your industry association groups and key players within these associations. They also might be opinion leaders in the media, either the  traditional media , or social media.

In today’s world of exploding social media, the affect “influencers’ have on your business will surely grow.

Getting clear on who your “Influencers” are, will help you formulate strategies and action plans in the Marketing section later in this workbook

Next, Competitors, 

The Competitors section is designed to capture information and bring some attention to your competitors.

Although I am not a big fan of spending a lot of energy or focus on competitors, it is helpful to keep track of who they are, and, over time, learn as much as possible about them and from them.

We start with a simple list of who they are, a somewhat subjective “risk rating” and a comment on what they do better than you do – what do they, or their customers, say is their competitive advantage?

If you have the inclination and resources you can dig into more detailed Business Intelligence data on your competitors over time. Keeping this document current on each review period will remind you to pay close attention to your changing customer needs, and help refine your target market for future growth.

Keep in mind, a competitor, depending on your perspective, may be a potential future partner or alliance.

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