How to Market to Your Ideal Customers

In this week’s Labcast, conversion rate optimization expert Lincoln Murphy explains why learning to market to your ideal customers will take your business from mediocre to spectacular.


Narrowing your customer focus may seem like a recipe for missed opportunities. However, sticking to a generic marketing strategy can actually hinder your scalability. Listen to this week’s Labcast to discover how to identify your ideal customer and how to tailor your marketing to your very best prospects.

This Week’s Guest

“Customers buy from you not because they understand what you do, it’s because you understand what they do.”

— Lincoln Murphy, Sixteen Ventures

Key Takeaways

  • Narrowing your target customer doesn’t have to limit your opportunities. Incorporate campaigns targeting your best customers into your market strategy. [3:45]
  • Determining your ideal customer is situational. They might be the customer with the highest lifetime value, the customer easiest to close, or maybe a customer who brought in a specific order. [5:00]
  • Analyzing historical data on your current customers can help you identify your ideal customer. [6:35]
  • Not sure what outlets to use for marketing to your best customers? Survey your customers on how they consume marketing. [11:50]
  • Understanding the nuances of your customers is key. Who is involved in their buying process? Are they going to pay with their credit card? Etc. [14:25]

Listen Here

Labcast 119: How to Market to Your Best Customers with Lincoln Murphy

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Kevin: Hello there and welcome to this edition of Labcast. I’m your host, Kevin Cain, and today I’m joined by conversion rate optimization expert, Lincoln Murphy, to talk about how to market to your ideal customers, and how to do that as part of a larger go-to-market strategy.

Hey, Lincoln, thanks for joining me on Labcast today. How is it going?

Lincoln: It’s going well. Thanks for having me.

Kevin: Yes. So, as I was saying in my introduction, today we’re talking about go-to-market strategies and the importance of marketing to your best customers. So, the first question I want to ask you about today is, why is it important for SaaS companies to get so sharply focused in, zeroed in on the best customers. What’s the advantage of doing that?

Lincoln: Well, the advantage, to me, the way I look at it is that when you’re trying to be all things to everybody, so, when you’re trying to market your product to everybody, you end up really talking to nobody, and that’s a problem. You’re just sort of putting out these generic messages. SaaS companies, due the nature of what it is SaaS companies do (technology) tend to go even a step further and, instead of just talking about themselves, rather, instead of just sort of talking to a generic audience, they start really talking about themselves and talking about their product and maybe even talking about the technology. Unless you are selling something that’s really at a low-level from a technology standpoint, most people aren’t buying technology. They’re buying a solution to their problem, and what happens is you start talking, again, to nobody in particular, and then you start talking to nobody in particular about yourself. It just starts to get really hard to make a sale. So, what I like to say is, there’s a high tax on getting people to figure out what you do. Right?

You might be growing. This is the problem that I run into a lot. Companies, maybe they’re not scaling huge amounts every month, but they’re doing okay and it’s sort of in spite of their efforts, rather than because of their efforts. They’re getting a lot of just random people coming to their site and figuring out that they can potentially use their product, signing up, and becoming a customer. You’re like, “Well, hey, that’s not bad.”

The problem is, that’s a recipe for mediocrity, and you don’t want to be there. Right? You got into this business because you want to scale and become the best there is in your industry. You need to work a little bit better than that.

One of the things I like to say is, and I didn’t come up with this, but I honestly have no idea where I heard it. So, sorry. Apologies to the source, but, basically, “customers buy from you not because they understand what you do, it’s because you understand what they do,” or something along those lines.

So, that’s what I mean. You know, ultimately, we need to be getting into our customer’s head and be speaking their language, and that’s what we’re going to talk about today.

Kevin: Yes. So, I mean, I can imagine for many companies a temptation to say, “Well, my solution could really appeal to a very broad audience, and so, why not try to capture some of all that audience, rather than focusing on just one?” Obviously, it doesn’t always make sense, because you want to try to dominate your niche, but how would you recommend that people actually identify that right-customer segment when there potentially could be numerous ones that are attractive?

Lincoln: Right. Right. So, there’s a couple of things that I think sort of set the stage for this. When I’m talking about ideal customers, a lot of the push back is, “Look. It’s two-pointed. I don’t want to just focus my file sharing business on one particular use case. Right? You’re asking me to take what’s potentially a horizontal product that, literally, anybody who’s connected to the Internet could use and focus in on one particular niche. Not going to happen.” So, how you combat that?

Well, one of the techniques that I’ve used, and I don’t think this is rocket science, but it’s just simply say, “Okay. Well, you can keep doing what you do, with your generic marketing, but how about we take a campaign?” If you were already going to do a campaign that was maybe generic in nature, let’s take that, and let’s focus on one of these ideal customers. That becomes easier to wrap your brain around. Right? So, it’s like, “Okay. Cool.”

So, for the next 30 days, I’m going to go after this one particular, ideal customer. So, if you’re having a hard time sort of saying, “Well, I don’t want to limit my opportunities,” here’s the thing, when you kind of think that way, “I’m going to limit my opportunities,” or, “I’m going to miss an opportunity, because I niched down to far,” the problem is, when you’re talking to nobody about yourself, you’re missing opportunities.

Kevin: Sure.

Lincoln: You’re missing a lot of opportunities. So, when we’re done talking about how to identify your ideal customer, if you’re thinking about the situation of using that idea of customers as one of, “This is the ideal customer for our entire business,” and you want to go back to your main marketing site and say, “Would your ideal customer know if they are your ideal customer simply by looking at your marketing site?” Most of the time, the answer is no. So, that’s a problem.

And if it’s not overall marketing, then we go back to the campaign that’s directed towards that ideal customer. Would they know they are your ideal customer by simply looking at your ads and your landing page and all that?

So, kind of to start the discussion of your ideal customer, like I said a second ago, it’s situational. So, you kind of have to know who we are defining an ideal customer for. Is it for your overall business or your overall product, or is it for a particular product line? Maybe you have a different use case of your product that you’d like to go after a particular market segment for, or maybe it’s for a particular offer. Okay. Let’s say you have a monthly subscription business, and you would like to do annual subscriptions, just because maybe you want to boost your cash flow, or something like that. Okay. So we could just offer that anybody, but maybe there’s a particular ideal customer that would be right for that particular type of offer. So, that’s something to think about, too, is what’s the situation? Okay.

So, once you kind of have that, that’s like step zero. Right?

Kevin: Yes.

Lincoln: You kind of have to know why you’re doing this. So, step one of determining your ideal customer is, really, kind of this is the base, and it’s really, there’s two ways to do it. Okay. You know, if you’ve been in market for a while, you have a lot of data. We can look back and say your ideal customer is maybe the one who has the highest LTV, highest lifetime value. Depending on how you define that, or maybe it’s the most profitable customer. But, maybe, it’s also the customers that were easiest to close. Maybe it’s the customers who had the shortest sales cycle, okay, from time of first contact the time of close. Maybe it’s the type of customer who bought into a specific offer, or maybe it’s a customer who maybe they want the most profitable, but maybe they just had less support, less on-boarding requirements.

And, see, this goes back to the situation, right? Because if you’re trying to offer people an annual subscription, maybe you can go back to your historical data and say, “Who bought annual subscriptions? Who’s the most likely to buy annual subscriptions?”

On the other hand, if you haven’t been in market for a while, or maybe, quite frankly, you’ve been attracting the wrong audience, and your historical data is just kind of not really useful, then you kind of have to go with your gut, and your gut can be augmented by things like primary and secondary market research. It could be augmented by your experience in a particular industry or those of your advisors or team members. But, ultimately, you’re going to kind of have to just say, “I believe this is the ideal customer for this particular situation,” and that’s what entrepreneurs do.

At some level, they think about information and then they kind of pull that together and then they place a bet on whether or not they’re right, and we want to figure out if we’re right or wrong, as quickly as possible. At that point, you’ve determined to your ideal customer is. Again, that’s not really rocket science, but it’s a method. It’s also not really that crazy or sexy. It just is.

Kevin: So, it doesn’t sound like there’s any universal definition, there, of what an ideal customer is, but, what about in terms of the things that you need to know about the customer in order to market to them effectively? Is that more a standard or what’s your thought about that?

Lincoln: Well, sure. So, once you’ve identified your ideal customer, based on the situation, then we want to figure out what the characteristics are. So this is exactly what you’re talking about. So, what I like to say is, “This is the who, what and where of the customer.” So, let’s say that you go back and you find out whom. And you look at your historical data and you say, “These are our most profitable customers,” however you define that. That’s up to you. Right? So, you come out with the most profitable customers, you sort the list by from most profitable to least. Let’s say you just want to take the top thousand most profitable customers that you had. We’re not marketing to them. Right? We’re just trying to find out who they are and go find more of them.

So, let’s say all you have, though, is their information. You have their email address. You have the name. Maybe you have the company name, whatever. At this point, you’re going to have to go probably back fill with some data, but the great thing is this is 2013, man, there’s lots of really great ways to get additional data. Now, you could literally go out and hire somebody to just go scrape the data together for you, or you could use a service like Full Contact to back fill data. In a B2B scenario, maybe Wrap Leaf, on a B2C scenario, which is going to be able to pull in demographic information about actual, sort of, individuals.

Then, you’re going to be able to say, “Okay. Cool. Out of the top thousand customers, I can group them by SIC code, or whatever. I can group them by geography. I can group by all this different information, and I can start to pull out.” I look for patterns and start to say, “You know, look, my top ten most profitable customers, or my top 100 most profitable customers all come from consumer package goods.” Or, they’re manufacturing where they’re all based in this particular geography. That’s how you start to take your information, pull together other additional information and get some good ideas on the whom.

And you kind of want to start drilling down a little bit more and maybe look for other things like company size, whether that’s employees or revenue or if you’re still in the startups. We want to know what funding they have, we want to know what stage there at, and all sorts of things, and, again, it’s situational.

But, then, you sort of have, “Okay. Here’s the group of our ideal customers. These are the most profitable customers, and here’s who they are and, sort of, what they look like, and, now, we can go out to the where, which is distribution.” So, that was the who and the what, and, you know, sort of kind of combined their, and then the where. That’s the distribution.

So, the next step is to go out and figure out how to get in front of them. So, we take characteristics, and this is where there’s not really a lot of magic. This is where you got to go out and do a lot of hard work. Find out, how do we get in front of those people? And it could be anything from the standby of AdWords, although you’ve got to be careful there. We’ll talk about that a little bit more in a second, but AdWords, forums, groups, LinkedIn, all the different social networks, different ad networks, different strategies of content of these types of companies. These ideal customers that you just identified, how do they consume their marketing? Do they like long-form blog posts? Do they like white papers? Do they like video?

You really have to get to know them, and here’s a little trick. If you don’t know them, you may have to go out and talk to them. So, right now, you can go back to your actual customers that represent this group of ideal customers, and ask them some of those questions. And then you sort of lay out, “Okay. This is how we’re going to go out and get in front of them, whatever that looks like, and then now we need to figure out what we’re going to offer them.” Right?

So, a lot of people sort of do this backwards. The come up with an offer. They’ll write some ad copy. And then they’ll go figure out whom they’re really trying to target or whatever, and that’s wrong. You kind of figure all the stuff out, figure out what the distribution is going to be. Then, you figure out your offer. You figure out what the ad is going to look like or what the content should look like, and what the call to action should be. And then you get into the next thing, which is, really, the phase which is the drivers. Right? So, those are the characteristics of the customer or of our ideal customer. Does that make sense?

Kevin: It does. You mentioned the “who, the what and the where.” What I didn’t hear was “the when,” and I’m wondering if that’s sort of the different stages in the buyer journey. The other thing I didn’t hear you talk about was “buyer personas” and I’m wondering if you’re an advocate of those, or if you think those are not necessary.

Lincoln: Yes. Absolutely. So, the why and the how really come up in what we would say is the next section here. So, one of the inputs, here, is also going to be, “Who’s involved in the buying process?” Right? So, trying to boil all this down for a few minutes here is interesting. I mean, there’s a lot to this, right?

Kevin: Yes.

Lincoln: But, yes, one of the things. So, once you’ve figured out one of the characteristics , this is going to be in the who and the what, and probably in the how, would be the buying process. We have to figure out how they buy. Right? So, really, in the how, is it one person that’s making the buying decision? Is it a committee? Is this a complex sale, where you have multiple types of buyers, like, buyer personas? And, from that standpoint, is it economic buyers, technical? In all that, do we need to understand that and deal with that and provide whatever resources we need to appease these different types of buyers, or are all those buyer personas sort of rolled into one?

An interesting discussion I was having the other day is this idea that small business owners maybe all those things rolled into one. I mean, sort of a misconception could be that they’re all rolled into one and that just the business owners going to be the one that you need sell, but, very often, they have advisors and peers that they will bounce ideas off of, and you may need to take that into consideration when you’re thinking about these different personas that are involved in the buying process.

So, even though it’s a one-person business, they might literally have other people involved that are helping them make decisions. So, you have to know your customer. You have to know, once you’ve identified this ideal customer, you need to go out and figure out all of these different, crazy, little nuances of the way that they buy.

So, yes, and then the other thing, other parts of the how are, “Are they going to pay with a credit card? Are they going to require that you jump through the PO and invoice hoops? Are they going to want to pay through a bank account, ACH, or something like that?” And that’s the thing is, you, as a vendor, unless you are in a position to dictate terms, you are often at the mercy of how they like to do things. So, what’s their procurement process, internally?

So, somebody comes in to your app through a free trial and is using it. You know, if you just give them a credit card option at the end of the trial, they’re probably not . . . I mean, I don’t want to say . . . There may be an opportunity, there, for them to convert or they may say, “I can’t do that. I need other options.” So, that’s not up to you to determine. You can draw the line in the sand and say, “We’re only going to do business with people who require a credit card, or that can pay with a credit card,” but you could be, you know, pushing people away who need other options to pay.

There’s also the possibility that the person trying your free trial, as an example, is not the person who can make a buying decision. So, if they need to go, then, to a CFO or to their boss or somebody else and get, you know, get buy off, you can either let them go sell it on your behalf or you can provide them additional tools to help, at least, you know, smooth that process, maybe give them, you know, and ROI sheet or something like that, that they can present to the CFO, but, if you don’t know that, if you’re not taking those things into consideration, that could be a problem. Right?

Kevin: So, you know, it sounds like, to me, that there’s a, you know, a bunch of information that you can gather, probably more than most people would know what to do with, in theory. So, how do you recommend that people actually take that information and get to the most important details and then actually apply it to their marketing?

Lincoln: Well, I mean, that . . . how do you, you know, it’s a . . . It’s not simple. I mean, it’s easy to understand. It’s simple in theory, but, you know, this is why, quite frankly, a lot of people don’t do this, but I like to say it’s a process.

Kevin: Yes.

Lincoln: You know, all it is, is a process, and if you just walk through the process and, you know, you understand that there aren’t any shortcuts in this process, then you’re going to be a lot better off. The reason, I think, that this becomes a sticking point, where we don’t want to walk through this process, is because, quite frankly, some of this stuff is hard and it takes a lot of work. So, I mean, it’s simple, but it’s not easy. Right? So, you have to go through this.

And, I think a lot of people go into marketing, a lot of, especially, technical founders, and things like that, kind of look at marketing is something that is unnecessary or probably won’t work anyway. So, when you look at this sort of daunting process, it’s like, “I’m not even going to try. I’m just going to go back and talk about my futures and my product, and the product will sell itself, and we’ll be good to go.”

Here’s the thing: I can run through this process relatively quickly. Once you start doing this, it becomes a lot easier. So I think the first time you do this, you might be a little overwhelmed, but it’s really just a few steps and it’s really just boiling things down and, man, once you know your customer, everything becomes a lot easier. It makes so much more sense.

One of the biggest problems is, if people are really honest with themselves, you know, if they’re struggling to grow at a substantial rate, or even things are starting to taper off, you’re stagnating a little bit. If we’re really honest, it’s because of this sort of just unknown mix of people that are coming into the product, generic audience, that we don’t really have any control over, and I think that’s a problem, and what happens is you get to that point where you don’t really want to go out and focus on a particular type of customer, but if you can look back and say, “All we want to do is offer an annual subscription. We want to go back and look at the people who bought those in the past.” We go back and find others that look like them and we can make that offer and put that in front of them in the right way, and that’s not that hard to understand. Right?

And if we have cash flow needs, there’s a great way. You want to attract the right audience that’s going to be able to take you up on your offer. If you want a bunch of cash upfront and want to offer this annual subscription and you just go out and do generic marketing, you might get some people who would be able to take you up on that offer.

But one of the things that I’ve found is that there are, often times, where if you offer an annual subscription and you call it “a strategic discount” or you call it “a discount” of some sort. You know, certainly some of the older businesses that have been around for a while, if they are going to do business with you, anyway, and you offer that, based on their internal procurement rules, they have to take the discount. Right? So, if you know that, go get more of those customers. Right?

So, you’ve got to go out and focus on the right people. That’s, at the end of the day, that’s what this is all about.

Kevin: Absolutely. Absolutely. Well, Lincoln, I really appreciate your time, today. This has been great. One last question. It’s the easiest one of all. How can our listeners get a hold of you if they want to?

Lincoln: Sure. Go to That’s sixteen, spelled out,, and all my contact information is there and tons of content on conversion rate optimization and free trials and freemium, and all sorts of stuff, or follow me on Twitter, @LincolnMurphy.

Kevin: Perfect. Well, thanks again, Lincoln. Really appreciate it. Look forward to talking to you again, soon.

Lincoln: Absolutely. Thanks so much.

Take the Next Step: Download the Free eBook

customer segmentationLearn how to use customer segmentation to identify your ideal target customers so you can sell to them more often and more efficiently.

Download this free eBook and learn how to:

  • Conduct customer research to identify your best, most profitable current customer segment
  • Verify hypotheses about the characteristics and behaviors that set those customers apart
  • Identify and target additional prospects that resemble those customers to speed up your sales cycle and fuel sustainable growth

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Lincoln Murphy
Lincoln Murphy
Customer Success Architect / Mentor

Lincoln Murphy is Customer Success Architect / Mentor for Storm Ventures. Previously he was the Customer Success Evangelist for Gainsight, where he drove thought-leadership in the areas of customer success, retention, and churn mitigation. Learn more about his customer acquisition and churn reduction consulting at
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