What does your ideal customer look like?

February 14, 2024
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    Targeting high value customers and finding lookalike audiences can be a nebulous process. But if you have the right data, you can see through the haze–and find your best customer.

    Every company has an ideal customer. Whether fifty-something health-oriented dog owners or twenty-something fashion-conscious college grads, parents of young children or nostalgic adults (or both, if you’re the Lego company), you can have one–or a few–high lifetime value, ideal, audiences for your brand.

    Initially, you may not know what they look like. Or you might have an idea–but in practice, it might not be the audience you expect. But by developing an understanding of your current customers and analyzing brand interactions, you can find out who your real best customers are–and formulate an ideal customer profile that can help you reach similar audiences, as well as encourage your fringe, high-potential, customers to act like your best ones.

    Reading the room

    The initial customer persona you build, before you even launch a campaign, might be much different from your later ideal customer profile. Or, conversely, the two may coincide. Regardless, that initial persona you build is a hypothetical–but your ideal customer nearly always exists among your existing customers. The “ideal” customer, after all, is built on real, high-value, engaged customers of your brand.

    So what makes somebody an ideal, high-value customer? Typically, one of these customers will have a high amount of what we call “future value”–that is, they are likely to make purchases far into the future. Momentum is typically built from their first purchase all the way through to their most recent one, so while the time difference between their first and second purchase may have been 180 days, the time difference between their twelfth and thirteenth purchase might only be 30–they buy more frequently than the average customer and typically spend more when they do. 

    That’s why it’s essential to constantly read your audience, engaging in acute data analysis to find defining traits of your customers, and examine where they are in their lifecycle journey with your brand.

    And once you find the traits of those high-value customers, deep in the lifecycle journey, you can use lookalike modeling to find more of them. And by working on relationships with current high-value customers, you can further them down the path to becoming best customers–loyal, engaged, returning supporters of your brand.

    So study the customers you already have. Read the room. Who are your repeat buyers? What draws them to make purchases? This is where data analysis and machine learning kicks in, to aggregate data and synthesize key findings about your audiences. 

    Using identity graphs and organizing your customers within a framework can help you create more ideal customers out of your current ones. That includes strategies like: 

    • Audience segmentation: Segmenting your customers into groups based on who your loyal customers are, who your repeat customers are, and who your mildly engaged customers are helps you define high-value customers and their traits–and consider strategies to push the rest of your segments in that direction as well. 
    • CRM enhancement: Enhancing your customer relationship platform can help you see where each customer is in their lifecycle with your company, identify traits about your best customers, and determine the catalysts for conversion. 
    • Identity resolution: Working with a data partner to connect your customers’ offline data to their interactions across channels and devices, can help you formulate a more robust view of your customers.  

    Building ideal customers out of existing ones

    You have several options when it comes to finding more ideal customers. The most effective way is to create them out of your existing pool of customers. These customers don’t already exist “out there” somewhere–rather, you have to work on the brand relationship with these audiences to transform them into ideal customers. 

    For example, for fringe customers, you can try targeting them with personalized emails. For customers further in their lifecycle, reward offers can encourage them to convert again. Soft sells like brand education emails can also work on one-time customers, while loyal customers can be incentivized to purchase again with recommended offerings to keep them among your best customers.

    Expanding your pool with lookalike modeling

    So you’ve segmented your audience. You know the groups of people who form the basis for your ideal customers, and their traits. Now, using data partners and AI, you can find lookalike audiences who don’t know about your brand yet would be interested in what you offer.

    The strategy works like this–using machine learning, you find new audiences that behave the same way your current customer base does–with similar behavioral traits and demographic characteristics. 

    Now, you target these new segments from the beginning of the customer journey–and lead them down the path of becoming loyal, returning customers.

    Discovering your ideal customer 

    So, what does your ideal customer look like? It’s hard to know at first. Reading your current audience, developing lookalike audiences, and continuing to push your customers into deeper levels of loyalty and return makes your ideal customer–and can give you the blueprint to pursue more of them.

    Because, at the end of it all, the ideal customer is one you help build.