How can you define a target audience with precision for a product?

In addition to using sources such as market research, industry reports, customer surveys which are mostly paid or expensive, if the product is a small scale/ MVP, then the easiest way to identify the market segment would be by studying other similar products/ competitors. By identifying the customers of competitors, we can quickly narrow down the market segment with their common characteristics, demographics and needs of our market segment as well. Also, by using the "Needs Hierarchy" of Abraham Maslow, we can segment the level of our customer. Example: If our product is related to smart housing (app), our target customer would fall under the 'Esteem' level, having already fulfilled the lower levels of needs, as it is not basic.

In a previous role at a fitness tech startup, we initially identified our market segment as fitness enthusiasts. However, after analyzing user data, we discovered a niche within this broad segment: individuals who were specifically interested in at-home high-intensity workouts. This led us to refine our market segment, focusing on a more specific group with distinct needs and preferences.

Our approach in my previous role at a startup approached all aspects with a 'first principles' thinking - this was to make sure our biases stay far from any of our definitive decisions or from making expensive mistakes. In a nutshell and apart from more subjective and less accurate survey mechanisms (in my view), we went as broad as we could for our campaigns in order to collect as much data as possible which then helped us determine characteristics and define personas for sharper segmentation and targeting.

I like to camp and use a Sniper in shooter games. Yup, I'm that guy: ( -_•)▄︻デ══━一 In the end, it's precise, right? Defining a target audience with precision is pretty much the same, it's like using a sniper rather than a shotgun. You start with broad market research to understand the general landscape. Then, you zoom in on the demographics and behaviors of potential users. The key is to identify who can buy/use your product, who will love it, and who will advocate for it. This involves understanding their needs, preferences, and pain points. Use data, surveys, and direct customer interaction to refine this profile. It's not about reaching everyone; it's about profoundly and meaningfully reaching the right ones.

To identify your market segment, you need to do market research and analysis. You can use methods like surveys, interviews, focus groups, online analytics, competitor analysis, and industry reports. You should answer questions like: 1. What problems or goals can your product solve or achieve for your potential customers? 2. What are their characteristics, needs, and preferences? 3. How large and fast-growing is your market segment? 4. What are the trends and opportunities in your market segment? 5. Who are your competitors and how do they serve your market segment? For example, if you are building a social networking platform for professionals, like LinkedIn, your market segment could be people who want to find jobs, network, or learn.

Go further and define your Strategic Customer Profile (SCP), Acceptable Customer Profile (ACP), and Non-Customer Profile (NCP). Strategic ones can become Ideal or help bring them in. Acceptable ones are not a focus area for feature/capability development. Non-customers are the ones you directly reject or cancel for lack of alignment on values (e.g. moral objection to opioid manufacturers), ways of working (behavior towards your employees or partners), etc.

One thing I've found helpful in defining the ICP is, after identifying the market segment, I create a "Customer Persona" or a "User Persona" for my product. I use Hubspot user persona maker which is free to use for this. While doing a persona for the ideal customer, I also make a persona for my negative customer. So that I know who is my ICP and who is the type of customer I should avoid reaching. Nowadays, when marketing our product/brand, avoiding negative customers is crucial because once we connect with a specific group of people, algorithms in social media platforms showcase our business profile to individuals within that category. Therefore, if we connect with negative customers, it will be a failure. That's why this is important.

While working on a mobile app for language learning, we created a detailed ideal customer profile. Instead of a generic "language learners" category, we honed in on specific characteristics such as age, profession, and language goals. For instance, our ideal customer became a 30-year-old working professional aspiring to learn Spanish for business travel. This level of specificity allowed us to tailor our product features and marketing strategies more precisely.

"In my experience, after defining the ideal customer profile, it's crucial to map and force-rank various attributes, perhaps through methods like Conjoint Analysis. This ranking provides valuable insights into trade-offs, allowing us to prioritize and satisfy what matters most to our ideal customers."

The most helpful ICPs I built, were not created from scratch, they were real clients I was already working with, providing CRO services. I just had to feel certain graphs in templates by asking them directly. I found a good example of ICP template on the web (it was on PipeDrive). I think it should be a balance of clients' really need and your own suggestions when building a product, but creating an ICP just from what you have in mind is kind awkward in my opinion, how do you even know what frustrations and pain points they might have if you are not one of them?

In my experience, when segmenting the ICP, we can start by the level of the customer which we identified previously using the Needs Hierarchy of Maslow. Because when we are aware of that, it is easy for us to understand the nature of our customer; whether they are high-end or low-end customers, what professions are they doing, what brands are they using now. Then based on those information, we can focus on the nature, features, quality, customer service and also the price of our product to cater our customers well and gain high customer satisfaction and build a loyal customer base.

Segmenting your ICP is vital to defining your target audience. Here is what I do for my products. 1. Use tools and methods to segment your ICP, such as Excel, Google Sheets, Tableau, HubSpot, Salesforce,etc. 2.Choose criteria that are relevant, such as demographics, psychographics, behaviors, interests, goals, challenges, motivations. 3.Quantify and measure your segments, such as size, growth, revenue, retention, engagement. Use tools such as Google Analytics, Mixpanel, etc. 4.Rank and prioritize your segments based on their value and potential. Focus on the highest value and potential. For example, if your product is Word, your ICP could be a professional writer. You could segment your ICP based on their writing genre, style, or format.

In a SaaS company catering to project management, we segmented our ideal customer profile based on organizational size. Initially targeting small and medium-sized enterprises, we observed that larger enterprises had unique needs. This led us to create distinct features and pricing plans for each segment, ensuring that our product resonated with both startup teams and large corporations.

Thinking from BTB standpoint you need to consider the “buyers” of your product who may or may not be the users. We still need to communicate to these buyers and make the product appealing to them and that cannot be done just through product features. Of course what problems your product solves is going to play a role but there might be other “non functional” factors/features that can play significant role in making the sale. Identifying such buyer personas and pitching solution to relevant concerns based on their profile (depending on how close to business, IT, legal or admin teams they are) can be helpful too.

Agree for sure on the importance of the segmentation and homogeneity of each segment , however too many segments , to many customized sales pitch to each segment is double sworded job , sales and marketing teams need to segment the market carefully , wisely , not to leave any segment undiscovered also to review collectively messages to be communicated to make sure it’s not confusing to the market , nor the sales team , best way is to practice sales scheme pitching .

In my experience, the best way to validate the target audience is by trying the functionality of the product manually with a group of test users. This can be done even before building a prototype/ MVP. And based on the information we collect by trying it manually, we can build a good prototype/ MVP. Additionally, the test users we use should be a sample identified from our ICP, because it is useless to test a product with persons who are not in our customer segment as it is not build for them. Example: If our product is a highly tech product (eg: an API builder), it is useless to test it with technical BAs, but we need to test it with Developers who will use it.

At an e-commerce startup, we had hypotheses about different target audience segments based on demographics and online behavior. To validate these assumptions, we conducted surveys and A/B tests. Surprisingly, our data revealed a segment we hadn't initially considered: users interested in sustainable and eco-friendly products. This unexpected insight prompted us to adjust our marketing messaging to resonate with this environmentally conscious audience.

"You should never ask your customers if they like your idea; you should ask them how they currently handle the problem your idea solves" Customer Discovery is often the most important part of the product journey. It's also one of the hardest because people lie (either intentionally, so as to not be rude, or unintentionally). The only true way to validate a customer and their problem is to run experiments, and let their actions dictate your decisions (as opposed to their opinions). Running cheap, fast tests using YCombinators 90/10 rule is an amazing way to validate hypotheses. look for a way in which you can accomplish 90% of what you want with only 10% of the work/effort/time. There is almost always a 90/10 solution available.

I use customer interviews and A/B testing to validate target audience segments for products. Customer interviews help me understand the customers’ needs, pain points, and desires. A/B testing helps me compare different versions of a product or a feature. For example, I used customer interviews for cross tenant migration feature I worked on. I asked the targeted customers how do they migrate their data today, their pain points, top asks, etc. I used A/B testing for a Microsoft search feature that I worked on. I had three designs and I tested different elements, such as the layout, color scheme, content, and functionality, to see which one resulted in higher engagement, retention, and satisfaction among the target audience segments.

- Validate the segments by comparing them with known customer behaviors and outcomes. Do these clusters align with differences in customer lifetime value, churn rate, or customer satisfaction? - Continuously refine your cohorts with new data and feedback. Customer preferences and behaviors change over time, so it’s important to update your segments accordingly.

No matter how well you identified your target customer at the beginning, it's essential to keep an eye on their interests, feedback and the trends that come in to the market. Because the only thing that doesn't change in this world is "Change" itself. That means, everything changes, people change, so as their likes and dislikes with age or with the new trends in the world. When our customers change, our product needs to change as well to cater their new needs. The best examples for this are; Nokia, Kodak and Blockbuster. Once giants in the business world, failed like dinosaurs in the history. So, don't become another dinosaur ignoring the changes in the world and in our customers.

My last top two things to consider are: 1. Defining a target audience with precision for a product is not a one-time task, but a continuous process that requires constant research, feedback, and iteration. As the market changes, so do the needs and preferences of the customers. Therefore, keep track of the satisfaction of your target audience segments. 2. Another thing to consider is that not everyone is your target audience. Trying to appeal to everyone can result in a product that is generic, bland, and ineffective. Instead, you should focus on the specific segments that are most likely to benefit from your product. You should also identify and avoid the segments that are not interested in your product, or are too costly to acquire.

Instead of viewing your target audience as a homogeneous group, consider them as a mosaic of individuals with unique characteristics, preferences, and needs. This approach encourages you to delve into the specific traits that define each segment of your audience.

Segmentation and determining ICP is an iterative process. You need to adjust based on prospect and customer engagement until you have signs of or have Product-Market-Fit.

Static segmentation models degrade fast. Rapid iteration and evolution are key. Segment dynamics to watch for: 👉 Personas shifting 👉 New groups emerging 👉 Values changing 👉 Needs transforming Like products, segmentation requires continuous improvement. Build frameworks to keep a close pulse.