Swipe Right on the Ideal Target Audience

Last week, we scared the sh&t out of you with the statistic about 95% of new products failing. And (hopefully) we successfully convinced you to feel comfortable taking a not-quite-finalized product to market or at least convince yourself that you are. Now, it’s time to move on to the audience. You remember all that market research you did back in Rule One? Pull it out, dust it off and get ready to put it to work as you take the next critical step toward your launch.

Let’s recap before we dig in.

Here’s another sobering statistic for you to consider: More than 50% of product launches fail to connect with the target audience on the first try. And the "Everyone" Trap is usually to blame. Unless you've created a magic pill that makes us mere mortals look and dance like Beyoncé, your product is unlikely to be a fit for everyone, especially when it first launches. And, if you’re targeting everyone, you're effectively targeting no one.

Seek out your early adopters.

Even if you have clearly defined the target audience for your product or service, you will still need to channel your inner Nancy Drew to help track down your elusive early adopters. Remember, only a small percentage of consumers are quick to buy new products right upon launch. To put this into perspective, about 21% of consumers make immediate purchases of new products, while 63% prefer to stick with established ones.

Still, it's well worth your time and effort to ferret out this small but powerful subsegment of your target market. Early adopters are eager to try out new products, have the budget to do so, and they often offer valuable, in-depth feedback on their experiences. If they’re impressed, they can become enthusiastic evangelists, providing strong references, writing glowing reviews and agreeing to be featured on your website or marketing materials to share why they’ve become loyal users.

Successfully targeting early adopters usually requires a niche strategy that allows you to focus your limited marketing resources on those most likely to be interested. Don’t underestimate the impact of specialized forums and communities for this purpose. For example, if your idea is a new, lighter Zombie Tool Blade (a real product), the Zombie-Apocalypse Preppers community, with its 18,000 members and growing, could be an ideal launchpad. Got an ingenuous new way to deal with “yarn vomit” (a real term for tangled yarn)? Consider marketing to the 11 million members of the online knitting community, Ravelry.

Of course, for this niche strategy to work, the early adopter target audience has to be relatively accessible, or at least accessible to you. Ideally, you should either already know them or be able to reach them through social media, online forums or your professional network. If they are within one or two degrees of separation, you can leverage your connections to reach them effectively.

Be cautious about poaching competitors’ customers.

While it’s possible to find your target audience by looking to your biggest nemesis – your major competitor – and targeting their customers, this is a much-debated approach. Personally, we have found introducing new products or services to customers already loyal to a competitor's offerings to be extremely challenging. In our case, it didn’t help that our service was part of a bundled competitive offering for which customers would have to pay extra when choosing to work with us.

But even if your offering costs less than your competitor’s, there are several key (and sometimes hard to surmount) obstacles you will need to consider when crafting a competitive customer acquisition strategy:

1. Strong customer loyalty. Beating out an incumbent brand and convincing a customer to upend the procurement process with a new vendor is usually as challenging as it sounds.

2. Switching costs. Regardless of the cost of the product or service itself, you will have to convince customers to switch from a familiar, integrated service to a new, standalone product, which can be both expensive and time consuming for you and them.

3. Brand recognition. Your competitors have it. You don’t (yet). Overcoming the awareness and trust deficit can often take too long and/or be too expensive for an early-stage product or service.

There is one exception to this caveat. If you're in the minority of new product launches that have identified (and addressed) significant customer dissatisfaction with existing offerings (ideally through thorough market research such as focus groups), ignore our earlier advice and go for it. Buyers who have been burned by earlier bad versions of products often become the most zealous advocates for vendors that provide a solution that actually works.

Resist the path of least resistance.

Initially, we underestimated the importance of an early evangelist strategy, hoping to stumble upon customers by chance. Instead of targeting the most likely buyers, we introduced our product to people we already knew within our professional network. While they appreciated our offering, they didn’t buy it. Those who showed interest could only consider a low price point or weren’t really inclined to go ask for more budget.

But then we got extremely lucky. A few of our best contacts, seeing the ideal buyer for our product before we did, invited their general counsel (GC) to our meetings. At the time, ESG responsibilities were just beginning to fall under the GC’s domain, and these professionals were eager to find a straightforward but effective way to address disclosures. Not only did they like our simplified product based on scores and regulations, but they also had substantial budgets allocated for such products with few competing priorities for those funds. Talk about hitting the bullseye.

Once we began asking all our contacts to bring their GCs to our pitch meetings, and started wooing them with thought leadership in legalese only a JD could love, our success rate gained real momentum.

What’s Next?

Once you have your minimum viable product and a connection with your ideal buyers, it’s time to start testing the market. Despite how tempting it is, you can’t use your closest relationships or current best clients as your guinea pigs. Doing so may burn a very lucrative bridge to the future. Next week, we’ll tell you why and what you can and must do instead to get the invaluable feedback you need to keep moving toward launch.