How are user personas defined?
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How are user personas defined?

When we look at a new market opportunity, we start with user personas to understand our potential clients’ unmet needs. We want to understand an unsolved pain point they are experiencing to develop a solution that resolves the problem and thus is perceived as having value.

Value = if you can fix that, I would pay for that!

If you go-to-market with a me-too product (existing competitors have already addressed the pain point), then the only means to compete is by price. That means your only option is to sell it cheaper than your competitive prices. This is a common approach, but it also terribly flawed.

  • Lower price = lower margins = less profitability.
  • Price is often associated with quality. Do you really expect anything at the dollar store to be well made? Is that the brand reputation you want?
  • If the customer already has a solution, will they move to save a few bucks? For example, I could probably save a few dollars on my web hosting, but I would have to move all my sites, I would have to learn a new system, reset all my emails, etc. In other words- no, I won’t move because the work to move isn’t worth the small amount I would save.
  • Your competitors could underprice you, as well. They have existing economies of scale and loyal customers; if they have to drop their prices to undercut you to maintain market share, they can survive. You are already priced low, can you really run the business profitably if you get into a price war?

Being the low-cost provider is clearly not the way to go when you are a new entrant into the market.

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Finding an unmet need

Big companies have big budgets to figure this out. They do market research; they interview consumers; they do A/B testing, and much more.

Most startups do not have those kinds of resources available to them. Most successful entrepreneurs take an unsolved problem in their life and develop a solution to fix it. They identified their problem (unmet need), looked for a solution, found none existed (market research), and built a solution.

Having done so, they need to figure out who else has this problem (the size of the market opportunity). There need to be enough people with this unmet need to make it a profitable venture. In researching the market, we often find different types of customers with unique needs. They all have the same basic unmet need initially identified, but they also have elements to their needs that differentiate them from other buyers. So, we need to build buyer personas to understand better who they are and want they are looking for.

Building the buyer persona

When we look at a new market, we try to develop at least 3 buyer personas to understand the needs of the market.

We are a digital marketing agency. From web development to social media mark, can; can to paid search to public relations. Our customers span a wide range of personas, and we try to develop solutions to meet their specific needs. So, let’s consider three customer profiles –

  • Solo entrepreneur to small business (less than 30 employees) –

Pain point – while these businesses understand they need marketing, they tend to rely on word of mouth to generate new business. They either do not have the knowledge or resources to market effectively. Marketing is an afterthought when they are need of new business. This results in feast or famine revenue cycles.

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Solution – While we offer direct services to these clients, our primary objective is to equip them with the knowledge and resources to understand their marketing needs. With limited budgets, many of these solutions are DIY, but it offers them a framework to develop a strategy to meet their marketing needs. They come to learn what they don’t know, so they can figure out whether to develop a solution in-house or to outsource it.

  • Medium-sized business (30-200 employees) –

Pain point – midsize businesses typically have some staff dedicated to marketing efforts. Somebody updates the website, someone is responsible for lead generation, and someone may post on Twitter and Facebook. They tend to have a marketing generalist covering the basics but lack specific expertise to take the company to the next level.

Solution – Our services attempt to compliment and extend the existing team. They may have public relations or reputation management needs; we offer specialists in that field to meet those needs. Specialists support more advance digital marketing needs, such as Adword campaigns, funnel marketing, content development, and video campaigns.

  • Large corporations (200+ employees) –

Pain point – Most large companies have these capabilities in-house. They typically turn to us to fill in gaps. They may have a unique project that needs specific skills but recruiting, and staffing a position doesn’t make sense based on the project’s duration, so they choose to outsource it instead.

Solution – Each client segment has unique pain points and requires slightly different solutions. So, we attempt to tailor our offerings to meet those challenges. We develop these personas by talking to potential clients and update them with the feedback we get from current clients. As the market changes, we attempt to update the personas to identify emerging needs.

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In future posts, we will further explore buyer personas and user stories. In the market’s needs and learn more – we recommend Buyer Personas – How to Gain Insight into Your Customer’s Expectations, Align Your Marketing Strategies, and Win More Business by Adele Revella.

How are user personas defined?

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