Who Is Your Customer?

Marketing & Acquisition

Situation

Kevin runs a house-painting company in Oahu. He's fully booked 3 months out at $1,800 per job. His competitor across town charges $3,200 and is also fully booked. Kevin has been in business 6 years. His competitor: 2 years.

What do you do?

A) Kevin should raise his prices

B) Kevin should fire low-value clients and pursue higher-end work

C) Kevin needs to understand why his competitor charges $1,400 more

The STP Framework: Segmentation, Targeting, Positioning

Three questions every business must be able to answer. These come from the same framework taught at Wharton and Stanford, simplified for the businesses that actually need them.

Segmentation: Who are all the possible customers?

Five lenses: Geographic (where they live), Demographic (income, business size), Behavioral (how they buy), Psychographic (what they value), Needs-based (what problem they're solving). A cleaning company has at least 5 distinct segments: busy professionals, new parents, Airbnb hosts, commercial offices, event venues. Each has different pricing, channels, and messaging.

Targeting: Which segment gives you the best business?

Evaluate each segment on 4 dimensions: Size (large enough?), Profitability (high transaction value?), Reachability (can you find them affordably?), Fit (authentic advantage?). Highest total score = your primary target.

Positioning: Why would they choose YOU?

The Positioning Statement: "For [target customer], [your business] is the [category] that [key benefit] because [reason to believe]." If you can't fill this in with specifics, you don't have positioning yet.

Build Your Customer Profile

Ideal Customer Profile Builder

Best Client #1

Best Client #2

Best Client #3

Most Difficult Client (last 12 months)

The Customer Retention Machine

Acquiring a new customer costs 5-7x more than retaining an existing one. The single most profitable marketing investment is not getting new clients, it's systematically re-engaging the ones who already trust you.

List your last 100 clients

Who has not booked in 90+ days?

Segment by LTV

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Send the re-engagement message

Track the conversion

From The Practice

Once your ideal customer is defined, the job is to keep your calendar full of them. Watch when your acquisition channel mix drifts away from your highest-LTV segment, before you realize you've been filling your calendar with the wrong clients.

Knowledge Check

A competitor launches at 20% lower prices. Best response?

Match their price

Do nothing

Double down on value-based clients

Add more services

Takeaway

You cannot be everything to everyone. The more precisely you define who your customer is, the more powerfully you serve them, the more they pay, and the more they refer. Specificity is a growth strategy, not a limitation.

Pass the knowledge check above to complete this module.

Educational use only

This course is general business education, not legal, tax, accounting or insurance advice, and no client relationship is created by using it. Rules vary by state and by situation, and rates and thresholds change. Calculators here are estimates meant to frame a conversation, not to produce a filing figure. Confirm anything that carries money or liability with a CPA, attorney or licensed broker who knows your specifics.