Not the largest file, not the most attractive file, but the file where your advantages are clearest.
When resources are limited, choose your target audience based on four criteria: large enough to sustain the business, able to pay, accessible at a reasonable cost, and where you can serve them better than competitors. Do not choose the largest audience; instead, select the one where your advantages are most evident, as limited resources win through focus, not spread. Choosing the wrong audience from the start will misalign your product, message, and channels, leading to wasted costs later.
Choosing the customer segment is the first decision in the strategy, done even before brand positioning. Because when you decide who to serve, everything that follows, from products, pricing, messaging to distribution channels, must align with that decision. Choosing the wrong segment from the start means that even if you do all the other steps correctly, the outcome cannot be saved.
Kotler presents a set of criteria called DAMP, which stands for Distinct, Accessible, Measurable, and Profitable. A file that does not meet all four criteria cannot be targeted, no matter how appealing it may sound.
For businesses in the early stage or restructuring, Sinh Vũ advises focusing on a concentrated strategy first. Winning firmly in one area before expanding is a more sustainable path than spreading thin from the start.
Positioning starts with choosing whom to serve. Selecting the target audience is the foundational decision; if this is wrong, the product, message, and channels will all be misaligned.
Sinh Vũ internal process perspective, S1
In the S1 process, Sinh Vũ builds a trio of customer personas along with an empathy map (a tool that helps deeply understand customers' emotions, thoughts, and behaviors). However, the important thing is not to create all three personas, but to force you to choose the most important group to focus on. The three personas are meant to understand the market sufficiently, not to serve all three at once.
Sinh Vũ uses interviews and market research to verify that the target audience is large enough, able to pay, and reachable, avoiding letting the founder choose the audience based on intuition. When the wrong audience is selected, all costs incurred in product, marketing, and operations will be misaligned and difficult to adjust later.
A question Sinh Vũ often asks clients at the start is: among all the groups of people who could buy from you, which group do you serve better than any competitor, and is that group large enough to sustain the business? The answers to these two questions often point directly to the target audience.
Topic: Choosing which customer segment to serve when resources are limited. Sinh Vũ guide, sinhvu.com
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If you have marked most of the signs above, this is the time to discuss in more detail. Sinh Vũ can help you review and propose a direction.
Philip Kotler, DAMP segmentation criteria and concentrated targeting strategy in STP. Sinh Vũ's internal process perspective, S1, inherits Keller's POD and April Dunford's competitive alternatives.
It is completely possible, and that is normal. When growth stagnates or the cost of acquiring new customers increases, it is often a sign that the initial target audience was not chosen correctly or that the market has changed. You can reconsider the audience, but you should not change it continuously, as each shift requires adjustments to the product, messaging, and channels.
Prioritize the segment where your competitive advantage is clearest, not the largest or easiest to reach segment. A clear advantage means you serve them better than competitors on important points for that specific group. Once you have a stronghold in one area, you can then expand to the next segment.
Sinh Vũ uses interviews and market research to verify, not allowing the founder to estimate based on intuition. You need to estimate the number of potential customers in the target audience, their purchase frequency, and the price they are willing to pay. If that number is not enough to sustain the business at a minimum level, the audience is too narrow even if it sounds appealing.