In this episode, Michelle breaks down why defining your ideal customer often leads to hesitation and second-guessing, even for experienced business owners.
You can have a clear niche on paper and still feel like something is off, and that’s usually the clue that you’re missing a layer. In this episode, Michelle breaks down why defining your ideal customer often leads to hesitation and second-guessing, even for experienced business owners. She introduces the difference between demographic niches and situational niches, and explains how understanding what your customers are dealing with, not just who they are, can completely change the way your marketing lands.
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Hi, I'm Michelle Warner and I'm a business designer and strategist. In the 15 plus years I've done this work, I've noticed the same trend everywhere. Business owners are falling into the trap of centering strategies first, when they need to be centering sequence.
Because the reality is, the steps you take in your business and the order in which you take them is more important than how well you implement any single strategy. So on this show, my goal is to fix that by helping you find and trust your own sequence of actions rather than blindly following someone else's strategy. Welcome to Sequence Over Strategy.
Why Ideal Customers Feel Hard to Define
Here's a question that tends to stop people when I ask it, whether they're a one-on-one client or it's just somebody that I've met and we get into a conversation. What's that question? Who's your ideal customer?
Even if you know it, most people kind of freeze in that moment, right? And it's till you kind of stumble over your answer. And it's not because you don't know the answer.
Sometimes you don't, or sometimes you're in the middle of a change. But it's mostly because what I've noticed is I'm not sure if the answer is right. Especially, and I'll just call myself out here, right?
People come to me, I get into conversations where they know I talk about this stuff. So they get nervous. When they're talking to me, they get nervous that they've missed something about their ideal customer or they're not understanding it fully.
So people will rattle off something like, oh, you know, VP's of marketing at mid-sized B2B company or coaches who have been in business for three to five years. But then they second-guess themselves. Is it specific enough?
Is it too specific? Are they leaving money on the table, limiting themselves? There's always some caveat question or caveat nuance that they put into the end of that, right?
They describe to me who they are, and then they start telling me more about that person. And I find that even when they like commit to this answer, there's this nagging feeling that like, maybe the marketing is wrong again. Maybe there's like a missed opportunity or a nuance in there that they're talking to the right people, but somehow it's like not happening.
And here's what I've learned in that moment, is that people kind of maybe feel like they've stumbled into a niche in terms of who their customer is, or that they've picked one but haven't really fully committed. Or that like they just don't fully understand it, which is normal. Like I still fall into this category sometimes, right?
Knowing who your ideal customer is tricky. And we really get caught up in wanting to define them by a series of characteristics.
And so today I want to talk about that dynamic of trying to define who your customer is, and the second-guessing of it, and maybe something that we don't talk about enough.
And that is something that I call like, there's two different ways to define your ideal customer. And this tends to unlock this answer when it gets awkward, right? And that is that instead of just saying we have a customer niche, you can define that into two different buckets, or at least I have.
Demographic Niches vs Situational Niches
And the way I think about that is that some businesses have demographic niches. That's the standard one that we think about, right? Something that's definable.
But also some businesses have situational niches. And some businesses have a combination of those two things. And so when we understand that, then I see this quickly unlock, and people have ahas, and things that they've been second-guessing about who they think their customer is suddenly make sense.
Maybe they can put a little more nuance on it. Maybe they can twist it in some way. Or maybe they can define it in a way that makes sense for the first time for them.
So we're going to go through this today, because I want to help you figure out which one actually works for your business, and, like, more importantly, understand what the heck I'm talking about, because you are probably hearing the word situational niche for the first time today. So let's break this down. Let's start with definitions.
A demographic niche is what most of us just assume any kind of niche is, right? This is like the default pattern. Kind of how I talk about traffic or relationship marketing, and everyone defaults to traffic marketing and don't know relationship marketing exists.
This is the same thing. Everybody kind of defaults into a demographic niche. And so, again, in a sequence over strategy world, if you continue to struggle with your niche or continue to struggle with feeling like your niche is wrong or is missing something, it may be that you didn't ask this question first.
It may be that you never asked, hey, do I have a demographic or a situational niche? So let's get to the proper definition. I'm rambling now.
But a demographic niche, again, is what most people default to and it's based on who someone or some industry is. It's based on a job title, an industry, an age, how long they've been in business, their company size. It's something that's concrete, right?
Easy to identify, simple to explain. And, again, when we're doing 99.9% of customer niche activities, we tend to be talking about demographic niches. And so most people tend to pick this, number one, because it's what you're directed to pick.
And number two, it's easier to identify. You can look at someone's LinkedIn, understand this is the person you're looking for. But just because it's easier to spot doesn't mean it's easier to market to and doesn't mean it's your niche.
Because there's this other type of niche, again, similar to how we never talk about relationship marketing, I never hear people talk about a situational niche or call it out using this vocabulary that it makes it easier to understand the distinction. And a situational niche is simply a niche that's based on what someone is experiencing. And so we do use these niches, but we tend to try to put them into demographic holes and then it gets really hard and confusing.
So what's a situational niche? Situational niche is like they're burned out. They just got promoted.
They're scaling fast and things are breaking. They inherited a team they didn't build and are trying to figure that out. It's like a moment in time and a specific problem state, right?
Something that's happening right now. And why is this different? It's different because people don't buy all the time because of who they are.
They buy because of what they're dealing with, right? If you're working with two leaders of HR organizations or two VPs of marketing or two different coaches, right, or two different entrepreneurs, one might be drowning because a team quit and they're trying to rebuild from scratch or someone else is drowning because they're burned out, right? It just doesn't matter all the time that they fit the same demographics.
It really matters that they fit into the situation that you fix. And so when you just market to the demographic, you're trying to solve or you're assuming that you can solve for all of those things, right? If your demographic is leaders of HR organizations and those leaders are dealing with much different things, then you're missing something.
And so I find that when people limit themselves to the demographic side, they get confused. More importantly, when you open yourself up to the situational side, then you can start understanding a little bit of how you can slip in and also how you can work across an industry, right? Because your examples start to get specific, your case studies make more sense.
All of this stuff starts to fill in. Like I'll just use myself as an example. I definitely have a situational niche.
And here's a way that that shows up for me. I work with businesses through a very wide range of revenue levels. We're talking over a million dollar range, right?
Honestly, over a $10 million range. I work with people in my one-on-one services who are like hitting 100K. And I also work with like $10 million organizations.
And I work with people across industries. And sometimes I get this question. So that doesn't fit very nicely demographically, right?
And so if I have a customer maybe who's wondering and only thinking demographically themselves, they might say, oh, well, what industries do you specialize in? Or what revenue level? And I can explain to them, I'm like, oh, it actually doesn't matter as long as you're a service-based organization.
And then I go ahead and describe to them the problem that they're facing, the situation that they're in. And I say, businesses at every level experience this. And the solutions might be more detailed if you have more revenue, but they're similar.
And they're actually the same. And so it doesn't matter where you land in there. I'm like working on the situation.
How to Apply This to Your Own Business
And that's an example, whereas if I limited myself to an industry, I would really limit myself and the ability that I have to work with different types of situations and in different industries. And that really lights me up. And so it helps for me to not feel really contained by a demographic niche.
The demographic niche I have is, well, you gotta be service-based. Like I don't work with e-commerce. So if you're service-based, that's one layer of demographic, but it's definitely not specific enough.
So what might my choices be? My choices could be to branch down a demographic layer and start layering more demographics onto service-based, right? I can start layering in strict revenue, strict industry, strict this, strict that.
And I would be, well, limiting myself. Whereas when I take service-based and then go down the situational branch of, hey, the businesses hit a plateau. They've gotten out of sequence.
They don't know what to do next to grow. Now that opens up my business. Not only does that problem sound really, really specific, to the people that I'm talking to, but it also sounds frankly really specific to me and makes me excited to be able to market and makes me excited to be able to understand how I really help.
And so going back, you know, and bringing ourselves back from that example, it's like demographic niches work really great when the demographic itself creates the situation. So like if you work with people who just became fractional CFOs, it's technically a demographic niche, but there's also a situational piece of it because becoming a fractional CEO creates specific challenges when you're just starting out. Same with working with founders in their first year of business.
The demographic is the founder that kind of creates the situation, first year chaos, so you can layer these things on, right? And so you can ask yourself, does my ideal customer's demographic automatically create the problem that I solve? If yes, then demographic niching works.
What would be an example of this if you work with like every kind of pregnant mom? That's a demographic, right? But if you then layer on a specific type of pregnant mom, now we're into a situation.
And when you can think about it in that way, and I will tell you that that is the most common way I see it, is that there's this layering on, can you just understand things a little bit better? And it's not like you can't figure this out without thinking in terms of demographic and situational, right? Like you can figure some of this out naturally, but I do find that most people are not confident in who their niche is.
Again, they're second guessing it, everything that we talked about up the top. So when you can break it down, again, sequence over strategy, when you can think through and use this mental framework, right? This mental decision making process to say, okay, what are the demographic pieces of my niche?
What are the situational pieces of my niche? And layer those two things together, then it makes a little bit more sense to you. Whereas if you're just kind of combining these things without categorizing them, I find, it's not 100% true, but I find a lot of the time people don't have much confidence in that niche.
And again, they're second guessing things. So that's why I like to think about these things, because sometimes you are only demographic, sometimes you are only situational, but again, a lot of times you can layer the two on, and then not only do you understand your niche better, but also your explanations to potential clients get a lot better. When they are asking, hey, you know, if you don't have specific experience in my industry, does that matter?
Now you have a response, right? Your situational piece of your niche is your response to that.
Let's talk about how this looks like in practice.
Like we already went through my example, but when, you know, one of the biggest concerns and one of the biggest things that comes up, and we talked about it a little bit though, is like, if I niche, can I still work across industries? If I niche this way, can I still work with the specific groups that I want to work with? And again, the answer depends entirely on which type of niche you have, and it depends on being able to layer these things, right?
Because if you have said all along that your demographic is helping tech startups with 20 to 50 employees improve their team communication, okay, well, you can probably also help a 30-person healthcare company, right? Or a coaching business. But again, there you start marketing across those different industries, and so it can get tricky.
And there's one question about how easy it is to meet those different industries, right? Are you putting too much of a burden on yourself to try to meet people in a lot of different industries? That's a different type of relationship marketing question, right?
And it's a valid one. But today we're just talking about like, could you do that work? If all that marketing was equally effective, if your marketing put you in spots where you're meeting people across industries, can you kind of morally and correctly tell them that you can work across industries?
And my answer to that is always like, well, yes, if the situational piece of your niche makes sense, then you should be able to work across industries, again, if it makes sense to you, if it makes sense within your marketing, if it makes your marketing easier, makes your marketing harder because now you're trying to go meet, you know, three different demographics. Again, that's a different relationship question that we don't need to get to. But in these situations where you're not feeling stable with your niche or where people are asking you these kind of situational questions when you're in a demographic setting, adding that layer and being able to separate, yes, I have a demographic niche versus, yes, I have a situational niche and layering them together can really help you, again, not only feel grounded in yourself, improve your messaging, but also really improve your communication with folks.
What You Want To Takeaway From This
So here's what I want you to take from this.
You don't have to choose. You do not have to choose between situational and demographic niches based on what sounds better. But what I do want you to know is that situational and demographic niches exist.
Like, that's the number one takeaway I want you to take away from this and really think about this in terms of if you heard me talk about relationship versus traffic marketing once and that was a huge aha for you, this is really similar in that I am helping you unlock a piece of your brain that you probably just had never even considered. Because being able to categorize marketing strategies as relationship or traffic, I see that completely unlock people's confidence in their marketing, understanding of their marketing, all the things. I see the same thing.
When I work with one-on-one clients and we start separating the demographic pieces of their niches with the situational pieces of their niches, I just see it unlock something. And so that's why I wanted to record this episode because I want you to know that situational niches exist. Maybe that's the right word for it.
Maybe that's not. This is like the day that I named relationship marketing without ever thinking about it. But there are those two sides of it.
And again, when you can start to understand how those layer together, it just unlocks a lot of things. So when you are thinking about your niching, you know, when you're thinking about who your people are, then you're thinking about demographic niching. But when you're thinking about what they're experiencing, then you're thinking about situational niching.
And again, the bigger unlock is that most people are going to have two pieces of it. So in a sequence over strategy world, we start with the demographics and probably a pretty broad demographic, right? So when we start with demographics, I don't want you to limit yourself so much that you keep going on demographics and get to something that's really specific.
Instead, I want you to put a broad layer on the demographics as I did, service-based business. That's not very specific, but it gives me a first layer and then start layering the situation on it. And I bet you get some really interesting conclusions and some really interesting new ways about thinking about your customers that, again, give you confidence, give you a different ability to talk to them, give you a different ability to explain to them why you are the match and why you do make sense because they can start to understand that, oh, this person understands the full piece of it and finding a solution goes deeper than just who I am demographically. And so that's the difference that I see happen between marketing that kind of maybe feels like shouting into the void or doesn't feel specific enough or just feels like something is missing and something that, you know, starts to fuel a conversation exactly the right way.
And, hey, if you are anybody like me and anybody like all my relationship marketers, you know that my whole goal in this is to start that conversation immediately with some really impactful words and kick off any type of business development relationship that you're having in an extremely strong place. And being able to really describe a person's situation and explain to them how that combination of demographic and situational, I don't want you to say that to them. I don't want to be like, well, demographically you're this and situationally you're this, so you're a fit for me.
Instead, make that conversational, right? And they will likely see you in a different way than maybe other people that they're talking about who are limiting themselves to kind of demographics or just aren't as able to think through that layering and be able to explain who they work with in the best possible way. So my friends, that is a demographic versus situational niching.
Again, I didn't make up the term demographic niching, but nobody really combines those two words. So these are just things that I have made up to help my clients unlock things that I've seen. And so if the concept of splitting your niche between demographic and situational helps you, that would just make me so happy.
And if it does, like reach out to me, tell me, reach out to me on LinkedIn, send me an email. I would absolutely love to hear if this was useful. And if you're listening to this and you're thinking, I have no idea which type of niche I actually have or I'm curious about this, the stuff isn't even obvious when you're inside your own business.
So that's the exact kind of thing I help people figure out in my one-on-one work. Like if your business is kind of plateaued and you're not sure why, part of it may be your niching. And so we always look at your business model.
Who's actually hiring you? What's really driving them to say yes? That's one of the core things that we start with when I work with folks one-on-one.
So if that sounds helpful and if you are a business who is plateaued a bit, when you're wondering what your next stage of growth is, or even if you're being proactive and you're looking at what your next stage of growth is, I would always love to have a conversation with you and to see if looking at your niching as a start of looking at your model is something that would help you figure that out. You can always find me at themichellewarner.com.
Thank you everyone for being here. As always, I will be back in two weeks with another episode.