How to Identify Potential Customers

Oct 19, 2022
segmenting your target market. demographic, geographic, behavioural, psychographic methodologies. Researching competitors, and figuring out how to position your company to be different in the marketplace.

How would you describe your target customer? What kind of person does he or she fall into? How much time should you spend researching them before deciding whether they are worth pursuing?

You might already have some idea who your ideal customers are, but chances are you don’t really know them well enough to answer these questions. If you want to increase sales, then you need to get to know your customers better. This exercise is meant to make you craft and create your customer profile. What's a customer profile you may be asking? Think of a movie script, how would someone define a specific character? You may know their job, their personality, what do they like to do when they aren't working. Do they have kids? Do they like to travel? What kind of car do they drive? The list goes on, the more specific you can get in naming and putting an identity together that represents your ideal customer, the better off you are in creating a marketing message that will resonate with them.

Segment Your Potential Customers

The most important step in identifying potential customers is to understand who they are. This means understanding where they live, what they care about, what makes them tick, and how they behave.

Customer segments is made up of different groups of people. These groups are called segments because each group shares common characteristics. Some segments may be defined by geography (e.g., residents of San Francisco), others by age (e.g., millennials) or income (e.g., wealthy retirees).

Market segmentation helps you understand who comprises your target market; where they live, what they're interested in, and how they behave online. This information gives you insight into how you should communicate with them and what type of product or service would appeal most to them. The first step in identifying potential customers is to define your target market. Start by defining your primary audience. What are they looking for? Who are they? Where do they live? What do they care about? Once you've identified your primary audience, you can begin to segment them further.


Customer demographics are data points that describe groups of individuals based on age, gender, annual income level, marital status, family size, education, etc. These demographic categories can be used to segment your potential customer base into different groups, each group has different needs and wants. A simple way to think about demographics is 'what they are;' at this stage it's not about identifying their personalities.

It's important to remember that every demographic has its own set of needs and wants. So, you shouldn't try to appeal to everyone with the same message. Instead, tailor the messaging to address the concerns of each individual demographic.


Where are your customers? This could also be further defined by where your business is located and if you're planning on selling beyond driving distance.

Geography plays a large role in determining who visits your business. People tend to shop locally, so if you aren't targeting local businesses, you could miss out on a huge chunk of your potential customer base.

To segment your potential customers geographically, you can use data from places like Facebook Places, Foursquare, and Yelp. These apps allow you to connect your business listing with other places nearby, giving you a chance to reach out to people based on location.

For example, if you own a restaurant in New York City, you might create a special offer for diners within 10 miles of Times Square. Or if you run a pet store in Los Angeles, you could send coupons to dog owners near Hollywood Boulevard.

This can also impact your marketing and operating costs, eg. if you sell on Etsy and are offering international shipping you need to understand the shipping costs relative to continent so you can reflect it in your pricing or charge a separate shipping fee.

Or if your product/service is software and doesn't need to be physically picked up or moved, think about the general density & makeup of different cities, countries and regions. Is there a particular area that has a lot of potential customers in a particular area? For example, if you're selling an apartment management software and you're looking to sell to apartment management companies, looking for geographic areas that has a lot of apartment buildings (like high density cities) would make sense.

person holding red round medication pill


Behavioural segmentation is a powerful method of targeting specific groups of people based on their behaviour rather than demographics. Behavioural segmentation allows marketers to understand who their ideal customer is, what motivates them, and what actions they perform.

This type of analysis is particularly useful for B2C businesses, since it provides insight into the needs and wants of each group. For example, a retailer could learn that men prefer products that are colourful and fun while women prefer products that are practical and functional.

Think of behavioural segmenting on how you envision a customer using your product and why they use it. Why do they choose to use your product? Some might say there is a particular feature/aspect that they can't find elsewhere, perhaps for others they might just feel it's more convenient. This can also impact how often they use your product/service and their overall loyalty (retention).

woman holding phone


Psychographics are personality traits that describe individuals based on their interests, values, attitudes, beliefs, motivations, behaviours, emotions, and experiences. These characteristics can be used to categorize different groups of people into distinct categories called psychographics. Psychographics are useful for targeting specific audiences because they allow marketers to connect with people who share similar interests and values.

For example, someone who enjoys hiking might be categorized as an outdoor enthusiast, while someone who likes sports might be classified as a team player.

There are three main types of psychographics:

• Personality: Openness, conscientiousness, agreeableness, extraversion, neuroticism, emotional stability, buying habits etc.

• Values: Family, religion, politics, health, money, career, etc.

• Interests: Hobbies, causes, brands, products, services, etc.

While each type of psychographic can be used independently, combining them together allows marketers to create highly targeted messages. For example, if you wanted to send a message to parents interested in healthy eating habits, you could segment them according to demographic data (age, sex, race), personality (openness, agreeableness), and interest (hobbies).

This approach is especially effective if you're trying to reach consumers who aren't easily defined by traditional demographics. For example, if your business sells pet food, you could target dog owners who are open to new ideas and willing to try new foods.

people in a group discussing app development

 What's Next?

Once you've segmented your audience, you need to determine what makes them tick. What motivates them? What concerns them? What do they fear? What do they desire? What do they hate? What do they believe? What do they value? What do they expect? What do they hope for? What do they dream about?

These questions help you uncover what drives your audience. They give you insight into what types of products or services would appeal to them. And once you know this, you can create content that appeals to them.

Once you've identified your target audience, you can use this information to create personas (a fictional representation of your ideal customer) and personify your brand. Personification helps you better connect with your audience because it gives you insight into their needs and desires.

Next, you need to find out where your potential customers hang out online. This includes social media sites like Facebook and Twitter, blogs, forums, review websites, etc. Once you've found these places, you can reach out to your potential customers through email, phone calls, and direct mail.

Finally, once you've reached out to your potential customers, ask yourself questions like: What do they care about? Where do they spend their time? Do they prefer face-to-face interactions or online communication? Are they interested in buying now or later? And finally, what would be the best way to communicate with them? Customer segments are not all created the same, meaning some are more profitable then others. Once you've been able to brainstorm the top 5 customer segments you're considering you need make some assumptions. You need to think about your company's relationships with customers, how to establish customer loyalty (retention) and the overall customer experience. Your marketing plan needs to be able to articular how you plan to a) grab their attention and b) turn them into customers. 

By answering these questions, you'll be able to develop a strategy for reaching out to your potential customers.

Research Competitors

Before you begin segmenting your potential customers, it's important to understand who you're competing against. Are you trying to sell to someone who wants to buy a car, or would rather purchase a home? Do you compete with other companies selling similar products, or are you targeting a niche market?

Knowing your competition gives you insight into how to reach your ideal customer. Once you know who your competitors are, you can research them to learn more about their business model and strategy. Research and potentially go through their sales process, it'll give you a better understanding of how they convert customers and what messaging they use. This will allow you to create a unique value proposition that sets you apart from the rest of the pack.

Lastly, you'll want to consider your own demographic data. Who are you targeting? Where do they live? What type of technology do they use? All of this information will help you develop a profile of your ideal customer. 

Once you've created your segments, you'll want to analyze each one to figure out where they overlap. For instance, if you were selling cars, you might notice that men between the ages of 25 and 35 tend to shop online. You can then use this knowledge to tailor your message to appeal to this group.

After you've analyzed each segment, you'll want to evaluate the success of your marketing efforts. Did you attract more leads? Were you able to convert more sales? Which segments performed best? The answer to these questions will give you valuable insights into your current and future customers.

man using MacBook

Be Different. Be Unique. Positioning

Positioning refers to the idea that you should try to position yourself in the market so that you become the solution to someone else's problem.

For example, let's say you own a restaurant. You might decide to focus on catering events instead of serving food directly to consumers. This would allow you to cater events while still making money off of the food you serve to guests.

To figure out what kind of positioning you should pursue, look at your competition. What problems does your business solve? How could you differentiate yourself from other similar businesses? These questions will help you understand what type of positioning you should pursue.

Once you've decided on a specific positioning, it's time to create a plan (marketing strategy). By this point you should understand the makeup of your ideal customer. Who are they? Where do they spend their time online? What types of content do they prefer? Once you know who your ideal customer is, you can begin creating content that appeals to them. 

Consider your unique selling proposition (USP). USPs are benefits that set your brand apart from others. For example, if you run a clothing store, your USP might be "the place to shop for stylish clothes. Your USP should be clear, concise, and memorable. Make sure that it's easy to remember and includes terms that describe exactly what you offer. When you're ready to share your USP with the world, write down a few sentences describing it and put it somewhere visible where visitors can read it.

After you've created a strong USP, it's time to start promoting it. Promoting your USP means sharing it on different platforms and letting people know about it. There are plenty of ways to do this, including posting it on Facebook, Twitter, Instagram, LinkedIn, Pinterest, and elsewhere.

In addition to promoting your USP, you should also consider creating content that supports it. Create articles, infographics, videos, etc., that highlight your USP. As long as you continue to provide value to your audience, they'll keep coming back for more.

Finally, don't forget about your current customers. They are a wealth of knowledge since they've gone through the entire buying process. Using customer surveys to understand what made them content, what made them bristle can help you not only with your customer service but understanding the type of customers you're currently attracting. They can validate if the customer segmentation you've outlined is correct, or if you need to reconsider your potential market. This is an ongoing project, it's a tough process, but can help you and your marketing team understand where you're excelling and where you're falling short.

woman in black long sleeve shirt holding black ceramic mug

Key takeaways:

  • Identify your ideal customer through research.
  • Know your customer's interests.
  • Create a persona for your customer.
  • Find out what motivates your customer.

Ready to build? Check out our comprehensive blog post about the 12 steps to starting a business

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