When I went into business for myself two years ago, I read an excellent book aimed at service professionals, Michael Port’s Book Yourself Solid. In it, he wrote about the importance of selecting an ideal client, knowing who was best suited for and needed, your offerings. He was very insistent that this was one of the first things you should do because you don’t want to end up working with someone who’s not an ideal fit.

But this idea scares most business owners because they already see a small, competitive market and now some loon of a business guru is telling them to sell to an even smaller segment. That sounds absurd! But it isn’t here’s why:

Know Your Audience, Tell Your Story

Let’s pretend you are a ghostwriter and someone very wealthy offers to pay you a king’s ransom to write a book for them. One of the questions you’re going to ask before taking on the project is “What kind of book?” Is it fiction or nonfiction? If you’re a seasoned writer you might also ask what category it would fall into. The reason you’d ask the category is that you are going to write a children’s book very differently than you would a Hollywood Tell-All “Autobiography.”

Knowing your ideal customer or target audience allows you to effectively craft your business story in a way they will respond to. When they identify with your story, they begin to know, like, and trust you. If you don’t create a business story that is appealing to your target audience, they’ll fail to identify with you, which means they’re less likely to buy from you.

A More Targeted Audience Means More Sales, Not Less

Defining your audience is no different than deciding to open an Italian restaurant. You could spend all day lamenting the fact that as an Italian restaurant no one will ever cross your doorway looking for egg rolls. You can think of all the egg roll orders you’re missing. This probably seems silly because you know as an Italian restaurant, when someone is in the mood for Italian, they’ll think of you. Who cares if they don’t come to you for satisfying their egg roll cravings?

The reason this is true is that when you commit to appealing to a certain segment, you can speak to them more directly. Luscious images of your mouth-watering pizza and lasagna can take center stage in your advertising and social promotions instead of needing to explain your vast menu over and over. If your customers are in the mood for pizza they won’t spend any time asking themselves if you have pizza. They’ll know.

Speak to Individuals, Build Loyalty

When you know your ideal customer and you speak to them directly it’s like inviting a friend to your house instead of a stranger. A friend is more likely to accept your invitation. People want to be a part of a group. We are social creatures. We like to do business with people we know, like, and trust. While we can’t get to “know” every customer in the strictest of senses, we can speak to them, their needs, and their problems in a targeted way that will have them saying, “That business gets me.” This is one of the highest compliments a customer can bestow on a business owner. A compliment like this means they identify with you and believe you understand their needs. “Bonding” like this creates customer loyalty. It is very difficult to create customer affection and a feeling of being understood by issuing a generic message.

Some businesses are concerned they represent more than one demographic or ideal customer. If that is the case, market to all segments differently in a way that appeals to their needs and solves their problems.

Business owners are often hesitant to narrow down to an ideal customer but by doing so you increase loyalty and build greater affiliations in a competitive marketplace.