Ideal Customer - Finding Your Perfect Customer

How to Define Your Target Market for SME Success in NZ

Sam’s Journey – Why Finding the Right Customers Transformed His SME

Sam had always believed that success in business was about casting the widest net. As the owner of Precision Engineering Ltd, he marketed his services to anyone and everyone, hoping that broad exposure would bring in more customers.

But despite his efforts, sales were inconsistent, and he often found himself working with customers who were difficult, unprofitable, or simply not the right fit. Sam’s marketing budget was stretched thin, and his messaging lacked focus. Worst of all, while new customers came in, they rarely became long-term clients.

One afternoon, after losing a major contract to a competitor, Sam realised he had to rethink his approach. He needed to stop chasing any customer and start attracting the right customers—the ones who valued his work, paid well, and stuck around.

The question that kept him up at night -  How do I find and attract my ideal customer in the New Zealand market?

The Solution – A Three-Part Approach -  Define, Research, and Focus

Sam discovered that successful SMEs don’t try to serve everyone. Instead, they define their ideal customers, research their needs, and focus their marketing efforts accordingly.

By following this structured approach, he was able to refine his strategy, attract better clients, and build long-term customer relationships.

1. Define Your Ideal Customer – Who Are They?

Sam’s first step was to clearly define the characteristics of his best customers. To do this, he considered three key areas -

A. Demographics – The Basics of Your Customer Profile

Demographics help pinpoint key characteristics of your target market. For Sam’s business, this included -

• Industry – Engineering firms, manufacturers, and construction companies

• Company size – Small to mid-sized businesses with 10-50 employees

• Location – New Zealand-based firms, particularly in Auckland and Wellington

• Decision-makers – Operations managers, procurement officers, or business owners

Red Flag -  If your marketing targets everyone, you risk attracting no one.

B. Psychographics – Understanding Customer Mindset and Needs

Beyond demographics, Sam considered the attitudes and motivations of his ideal customers -

• Pain points – They needed precision-engineered components but struggled with quality and consistency from other suppliers.

• Priorities – Reliability, expertise, and long-term supplier relationships.

• Buying behaviour – They valued service over price and were willing to pay for quality.

NZ Market Insight -  Kiwis prefer working with suppliers who understand their business challenges rather than those who only compete on price.

C. Customer Segments – Separating High-Value vs. Low-Value Customers

Not all customers are equal. Sam realised that some clients brought in high revenue with minimal issues, while others drained his resources.

By segmenting his customers, he identified the most profitable ones and focused on attracting more of them.

Red Flag -  If 20% of your customers cause 80% of your headaches, it’s time to refine your target market.

2. Research and Validate – Where Do They Spend Their Time?

Once Sam had defined his ideal customer, he needed to find out where they searched for suppliers and what influenced their buying decisions.

A. Conducting Market Research

Sam used several strategies to validate his assumptions -

• Customer interviews – Speaking directly with current customers to understand why they chose his business.

• Competitor analysis – Studying which clients his competitors were attracting and how they marketed themselves.

• Online research – Analysing LinkedIn groups, industry forums, and business directories to identify trends.

NZ Business Insight -  Word-of-mouth and business networks play a huge role in B2B sales. Understanding how referrals happen can be a game-changer.

B. Identifying the Best Marketing Channels

To reach his ideal customer, Sam focused on -

• LinkedIn and industry networks – Decision-makers in his industry were active here.

• Referrals and strategic partnerships – Working with existing customers to get introductions to similar businesses.

• Trade shows and business expos – Places where potential clients actively sought suppliers.

Red Flag -  If you’re advertising where your customers aren’t, you’re wasting money.

3. Focus Your Efforts – Attract and Retain the Right Customers

Now that Sam knew who his ideal customer was and where to find them, he shifted his business strategy to focus on them exclusively.

A. Tailoring Marketing Messages

Instead of generic marketing, Sam refined his messaging -

• Website content – His homepage now clearly stated his expertise in precision engineering for manufacturers.

• Social media – He shared case studies showcasing successful projects with businesses similar to his target customers.

• Email outreach – He sent personalised messages to decision-makers, offering valuable insights.

Psychology Insight -  Customers respond to marketing that speaks directly to their needs and challenges, rather than broad, one-size-fits-all messages.

B. Adjusting Pricing and Service Offerings

Sam adjusted his pricing and services to reflect what his best customers valued most -

• Premium service packages – Offering priority service for long-term clients.

• Flexible contracts – Making it easier for high-value customers to commit to ongoing work.

Red Flag -  If you’re competing on price alone, you’ll always be in a race to the bottom.

C. Strengthening Customer Relationships

Once Sam attracted the right customers, he worked on keeping them -

• Proactive follow-ups – Checking in regularly instead of waiting for the next order.

• Exclusive insights – Sending tailored industry updates and tips.

• Loyalty incentives – Rewarding repeat business with discounts and perks.

NZ Business Insight -  Kiwis value long-term relationships—if you invest in them, they’ll reward you with loyalty.

Sam’s Turning Point

After six months of refining his customer strategy, Sam saw major changes -

• His conversion rates doubled because his marketing now attracted the right businesses.

• His customer retention rate increased as clients appreciated his personalised service.

• His profit margins improved because he was no longer wasting resources on low-value customers.

One afternoon, Sam received an email from a new client -

“We’ve worked with multiple suppliers, but you seem to actually understand what we need. Let’s set up a long-term partnership.”

At that moment, Sam realised that finding the right customers wasn’t about working harder—it was about working smarter.

Reflective Exercise – What Would You Do?

Sam’s success came from focusing on the right customers instead of trying to sell to everyone. If you were in his position, which strategy would you prioritise?

• Refining your customer definition – Who are your most profitable clients?

• Researching where they spend their time – Are you marketing in the right places?

• Tailoring your marketing and services – Are you speaking directly to your ideal customers’ needs?

Consider how these approaches could transform your business.

Why This Focus Area is So Important

For NZ SMEs, defining the right customer is critical. Businesses that take the time to refine their target market -  

·         Spend less on ineffective marketing

·         Attract customers who truly value their services

·         Build stronger, longer-lasting relationships

·         Increase profitability by focusing on high-value clients

A business that knows its customer isn’t just surviving—it’s thriving.

Golden Nugget -  “Success isn’t about serving everyone—it’s about serving the right ones.”