If you're anything like me when you started to build your business you were grateful for any customer who would walk through the door (or contacted you online). In the early days that's generally how a business starts, being selective feels like a luxury.

The problem is that if we don't start to get selective and targeted with our customers, we get whoever comes our way, for whatever reason. This means we can end up with the customers we deserve, but probably not the ones we want.

One example of this is when we sell ourselves as being cheap. Now we attract customers who are looking for cheap. They in turn tell their cheap friends and before you know it, you have a business that struggles to make money because all of your customers are cheap. And cheap customers tend to not be overly loyal. They are demanding at a level far higher than they are prepared to pay for.

We need to reach a stage where we are clear on the type of customers we want to attract into our business. Making an "ideal customer avatar", is a great way to paint a clear picture of the exact type of customer you want to attract to your business.

Figuring out who your ideal customer is can sometimes be a little challenging. Here are a few ideas that might help you get more clarity:

  1. Go back over the last years worth of figures and see which customers have been the most profitable (not those that have spent the most, but those that you have made the highest profit margins on). Clearly we want more of these people or businesses as customers.
  2. Think about every project you did in the last year, which ones were perfect? The customer was great, they paid well, they respected you and your team, in fact everything was perfect. Who were they, what industry were they in, what made everything go so well? Ask these questions to paint a picture of your ideal customer.
  3. Think about where your business is heading - your goals and dreams. Are your existing customers going to help you achieve these? If not, what are the characteristics of the customers who will help you to get where you want to go?
  4. What products or services are the most profitable for you and the easiest to deliver? Who are the ideal customers to buy these?
  5. What is going on in your industry and what trends are emerging? You need to do some serious research or you may wake up one day and find that you no longer have any customers. Generally there is a lot of information available about trends, big data is churning this information all the time. Use it wisely and plan your future.

Once you really are clear about who your ideal customers are, and you can define your niche, you can develop your messaging, start to write content for them, develop your online presence accordingly, develop products and services that they will want and generally tailor your business to suit them and whatever it is that they want.

When this happens, you develop a wonderful competitive advantage, you enjoy your business much more and you generally make more money. Three wonderful outcomes that simply come from knowing who you want your customers to be.

Now one word of warning, if the customers you want are vastly different to the ones you have, it make take some time to change the mix. You have to go through the "losing the deadwood" stage and that can be scary because all we see is lost revenue, not the transition into something better. So be prepared for things to dip before they rise and become far better than before.

Published on: Feb 16, 2016
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.