Wanting as many people as possible to use your product is a natural part of being a product manager. You have something you think creates value for people and the more who use or buy it, the more successful it will be, right?

It's easy to look at unicorns like Google, Facebook and AirBnB, ubiquitous products that are part of all our lives, and think 'I want my product to be like that'. It's an admirable goal, but important to remember that none of those products started out trying to cater for everyone. And, in fact, trying to cater for a broad range of users too early on is one of the things that kills businesses.

Even huge companies tend to start out with relatively small, focused customer groups. Google was academic researchers looking for articles, Facebook was a single university (then a small group of universities for a long time), and AirBnB was for people renting rooms while attending conferences.

When you try to cater for everyone too early on, you are likely to end up creating a product that does a few things, but none of them well enough to deliver value to the customer. You'll be spread too thinly to understand what customers want and to build anything that really helps them.

By starting with a very specific customer in mind, you can avoid these pitfalls. It means you can:

• get clear feedback on what creates value for your customers
• prioritize effectively and know what to build
• know how to speak to your customers
• build a user-base who loves your product enough to recommend it to others.

Sounds simple. But how do you find which customer group to work with? That's what we'll explore in this article. We'll start by looking at how to segment markets and look for customer groups within them, then investigate some simple tools you can use to get really specific about your customers so you can really understand what matters to them.

Target markets vs target customers

Before we start exploring who your customer are. Let's get clear on two concepts: target market and customer profiles.

Target market

Target market is a high-level, zoomed-out view of who buys your product. It's usually used for strategy, planning commercial viability, market-sizing etc. Your target market is usually cut by demographic and industry information such as age, job and sector.

For example, your target market might be people in their 30s who live in London and work in tech.

Starting with a broad target market then slicing it several times is how you start to narrow down everyone to a more manageable place to look for customers.

Customer profiles

Customer profiles are subsections of your target market, usually incorporating much more detailed segmentation using a range of methods beyond demographic data, such as motivation, goals and jobs to be done.

They are used for more detailed product work such as prioritizing features and refining value propositions. You'll also find that marketing and sales departments use customer profiles but do it in a different way than product.

Be clear on the difference to collaborate successfully

Your target market should be the same for all departments in your organisation. However, you might find that other parts of your organization use slightly different customer profiles.

For example, when your marketing department is writing messaging, briefing on advertising creative work, and knowing who to target with paid advertising, they might want to work with a broader or narrower customer profile than you do in product. And they may also want to include more detailed information.

It's fine for the customer profiles to be in a slightly different format, if that makes people more effective at their job. However, it's important to make sure they are aligned and not promising different things; for example, new benefits or features that the product doesn't deliver.

You can achieve this alignment by working through the core areas of the customer profile together and sharing your research between departments.

Methods for segmenting your target market

There are many methods for segmenting your target market. The most useful of these methods will differ depending on your particular situation.

For example, if your product is for a business-to-business audience, industry segmentation will help you define your target market. However, for a business-to-consumer product, psychographic segmentation might be a better starting point.

When you are segmenting your market, you're looking to narrow it down to a segment that:

• Are able to buy your product. The product needs to be accessible in terms of cost and infrastructure. For example, there's no point in trying to sell your product in a market where it's completely unaffordable.
• Are willing to buy your product. Focus on markets where people actually want your product. This means prioritizing those for whom your product creates the most value.
• You can serve well. There might be logistical factors that narrow down the markets you can cater for. For example, time differences or tax arrangements might mean you are not able to serve some geographical locations.

Bearing the criteria above in mind. The following methods are a good way to narrow down your target market:

• Behavioural. Based on things people actually do or want to do. This includes factors such as goals and jobs to be done.
• Psychographic. Based on attitudes, opinions, aspirations, and lifestyle factors.
• Demographic. Age, gender, income level, job, marital status, education etc.
• Geographic. Where the customers are in the world.
• Occasional. This has some overlap with behavioural and jobs to be done. It's about customers who are going through a specific event where people have a common experience. For example, celebrating a birthday or going on holiday
• Industry. For B2B or work-focused products, segmenting by industry can be useful. For most B2C products, this goes along with people’s job in a demographic segmentation.
• Firmographic. Also for B2B products, this means segmenting according to characteristics of the company people work for. For example, company size, department size, companies with expanding head counts, companies with a particular structure etc.

And you'll likely use a combination of all the methods above in one of two ways.

• Bottom-up. Starting with the customer, if you're clear on the problem your product solves for them, and that they are able and willing to buy it, you can use the other segmentation methods to explore markets by looking for more customers with a similar problem.
• Top-down. Starting with a market, if you are established there already, you can look for customers within that market who have a problem you can solve.

Methods for defining customer profiles

When you're clear on your target market, you can segment that further to create customer profiles. Your customer profiles will be useful for understanding in more detail how well your value proposition works. Typically for early-stage products, you're looking for customers who are going to be the biggest fans of your product, so that means zooming in even further on people who are able to use it, want to use it and who you can serve well.

As you are doing more detailed research with your customers, you can use these methods to synthesize the information you gather, understand it, and incorporate it into your product work.

Customer slicing

In his book 'The Mom Test: How to talk to customers & learn if your business is a good idea' author Rob Fitzpatrick sets out a simple flow of questions you can ask yourself about customer groups to keep cutting them down until you have a customer profile to work with.

He says:

Start with any segment and then keep slicing off better and better sub-sets of it until you’ve got a tangible sense of who you can go talk to and where you can find them. Start with a broad segment and ask:

• Within this group, which type of person would want it most?
• Would everyone within this group buy/use it, or only some?
• Why does that subset want it? (e.g. what is their specific problem)
• Does everyone in the group have that motivation or only some?
• What additional motivations are there?
• What other types of people have these motivations?

Jobs to be done (Using the Strategyzer customer profile)

It might sound obvious, but an effective way to define customer profiles is often starting with what they aim to achieve by using your product, and that's how the Strategyzer customer profile tool is arranged.

It's a simple tool that's part of their larger value proposition canvas, and it helps you write the jobs to be done, customer pains and customer gains in a way that you can match them up with ways in which you can deliver value as you develop your value proposition.

Personas

Although they have developed a bad reputation recently. Customer personas can be a useful method of synthesizing what you've learned about your customers and are a handy way to describe particular customer groups quickly to others in your organization.

At its essence, a persona summarizes key information about a customer group by bringing it to live as a description of an imaginary person in that group. Depending on what you use them for they will have slightly different information on them. Most useful for product managers tend to be: a short description of the 'person', some information on how the segment was cut to arrive at the persona, what jobs they need done, what their pains and gains are, and a short description of any current behaviors they have that are relevant to your product.

Remember, though, personas aren't a substitute for user research. If you think your value proposition would resonate with your persona 'Sally', you still need to test it with customers who fit that persona.

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Empathy maps

Originally developed as a tool to help designers understand their users better, the empathy map can be another useful way to summarize what you know about a customer group and display it in one place.

The categories on the map contain similar information to other customer profile tools but they are arranged in a way that's designed to help the viewer put themselves in the customers shoes, creating more empathy with them.

Where do target markets and customer profiles fit into your product strategy?

Target market and customers cover one part of your product strategy: who will buy your product. But equally important are why your product exists and how you will approach building it. This article is taken from our forthcoming ebook on product strategy, so if you found the tips here useful and want to make them part of a broader product strategy, sign up for our newsletter to enjoy early access to the ebook when it's ready.

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