How Having Target Customers Unlocks Value

This week we’re going to talk about how defining a target customer is one of the most overlooked but most important parts of product management.

I’ll walk you through how to move from broad guesses to sharp customer definitions that guide strategy, prioritize your roadmap, and ultimately help you deliver products that customers actually care about.

Without clarity on your target customer, you’re flying blind. You can pour money into development, crank out features, and still watch your product fizzle because you built something that doesn’t quite fit anyone’s needs.

On the other hand, a clearly defined target customer becomes your compass. It helps you choose the right problems to solve, filter out distractions, and communicate value in a way that resonates.

Most companies stop at the high level. They’ll say their target customer is “small businesses,” “millennials,” or “music lovers.” These definitions are too broad to be useful.

When your target customer is "everyone", you end up building products that don't solve problems for anyone.

Teams also forget to revisit their definitions as markets and customer needs evolve. What was true two years ago may not be true today, but they cling to outdated assumptions until it’s too late.

A well-defined target customer is the backbone of product strategy.

So let's talk about how to create one.

Takeaway 1: Start with a broad segment, then carve down into a specific sub-segment

I once had a start-up that was more or less an online market place for artists. That's where made the rookie mistake of declaring that our target customer was “everybody.”

I had no idea that companies did things like target specific customer segments.

But the first marketer I interviewed with stopped me cold with one question: “Who exactly is your target customer?” I froze.

His reply has stuck with me ever since: “If your target customer is everybody, your target customer is nobody.”

A bold thing to say in a job interview, but he was 100% right and it's stuck with me since.

That lesson changed the way I approached product management. It taught me that solving problems starts with defining whose problems you’re solving.

In our case, we realized the people actually giving us money were the artists, because we took a commission on their sales.

That narrowed the lens. Then we asked, “Which artists?” The big names with agents had no use for us. But independent artists struggling to get exposure and sell their work? That was a group we could serve.

Your first step is always to start broad and then narrow. Begin with an industry or a market segment, then drill down until you find a specific group whose needs are not being met.

Takeaway 2: Define by demographics, behaviors, and preferences

Once you’ve identified a sub-segment, you need to sharpen the picture. A vague label like “independent artists” doesn’t tell you enough. You need details that describe who they are, how they behave, and what they value.

In our case, the definition looked something like this:

• Visual artists, not musicians
• Selling canvas paintings, sculptures, and original works (not replicas)
• Actively participating in local art shows
• Located within 50 miles of Philadelphia
• Daily internet users, comfortable promoting and selling online
• Capable of shipping and digitizing their work

Notice how different this looks compared to “everyone who likes art.” This definition is concrete. It guides what features to prioritize, what marketing channels to use, and what user experience to design.

Without this kind of clarity, you risk wasting energy building things your real customers don’t need.

Takeaway 3: Research the segment deeply before committing

Once you’ve drafted a sharper definition, it’s time to validate it. This is where real discovery work begins.

Talk to these customers directly. Observe how they solve problems today. Look at the tools they hack together because they can’t find something that works. Study what frustrates them and where they spend money.

When we finally started interviewing artists, we realized we had overestimated some needs and underestimated others.

For example, we thought the digital sales feature would be a huge differentiator. In reality, many artists cared more about tools that could help them bring people to in-person events, because that’s where most of their money was made.

This kind of research is what stops you from building features that sound good in theory but flop in practice. It also helps you calculate the size of the opportunity.

Defining a segment is only useful if the segment is large enough to support your business.

Takeaway 4: Use customer definitions to prioritize and say no

A clear definition of your target customer doesn’t just tell you what to build. It tells you what not to build

This is where many product managers struggle. They hear requests from sales, leadership, or random customers and feel pressure to deliver on all of them.

But when you know exactly who your target customer is, you gain the confidence to say no to requests that don’t align.

For example, when a well-connected art dealer approached us with ideas for premium services tailored to galleries, it sounded tempting. Bigger margins, higher-profile users, more visibility.

But galleries weren’t our customer. Independent artists were. Building for dealers would have diluted our focus and left our core audience underserved.

Your target customer definition becomes your prioritization framework. If a new idea won’t add value for them, it doesn’t make the cut.

Takeaway 5: Revisit and refine your target customer regularly

Customer definitions aren’t set in stone. Markets shift. Competitors enter. Customer behavior evolves. What worked yesterday might not work tomorrow.

You need to revisit your target customer regularly. Maybe that’s quarterly. Maybe annually. But it has to happen.

Ask yourself:

Are we still solving this group’s most pressing problems?

Has their behavior changed in ways that make our product less relevant?

Are new sub-segments emerging that we should pay attention to?

Are we still delivering the kind of value that keeps them coming back?

If you ignore these questions, you risk drifting off course. Your product might still function, but it will quietly lose its grip on the people it was meant to serve.

In Conclusion

Defining a target customer is the compass that keeps your product strategy pointing in the right direction.

The reason my first company struggled wasn’t because the idea was bad. It was because we skipped this step. We thought everyone was our customer, which meant no one really was.

Learn from my mistakes. Define your customer sharply. Revisit it often. Use it to guide your strategy. Do this well, and you’ll not only build better products, you’ll build products customers are willing to pay for.

Thanks for reading. See you next week.