The Importance of Customer Discovery: Know Your Audience and Know Your Market

March 20, 2025 by Ada Jobs

Digital Economy Economic Development Newsletter

By: Sunnie Dawn Baker

Entrepreneurs and small business owners must consider many factors to achieve success, with their target market being one of the most crucial. Sometimes, when people are starting out, their optimism leads them to believe that everyone is going to be interested in their goods or services. However, the market is not a monolith. This is why it is vital to determine who the ideal customer is, for both business planning and marketing. Knowing your audience is essential in most situations. If you are writing a story or telling a joke, you are only going to be successful if you tailor your message to your audience. Businesses must also apply this principle. Without a clear understanding of their audience, businesses struggle to craft appealing messages, determine the most marketable products or services, and set appropriate prices.

One of the most helpful tools available for entrepreneurs and small business owners is the creation of one or more “personas.” This activity helps business owners deeply analyze their target audience. Customer discovery is a creative process that encourages individuals to consider often overlooked factors. In essence, it mirrors creative writing exercises where a writer develops a fully fleshed out character or narrator. For instance, in the beginning, a business owner might determine their target market as college educated women, ages 25-35. However, through this process of customer discovery the business owner is encouraged to think more deeply about this target customer, going as far as to give her a name and think beyond basic demographics to behaviors, beliefs, characteristics, goals, needs, and obstacles. Instead of viewing the customer as an abstract concept, the business owner now sees an individual, or ‘persona,’ which helps refine business strategies with a specific customer in mind.

Developing a persona can impact many different aspects of business. Identifying your customer’s needs, goals, and obstacles directly influences the goods or services you offer. If your desired offerings do not align with the persona you develop, it signals a mismatch between your business and your ideal customer—one of them must adapt for success. In addition to the basic offerings of a business, this exercise can also help an entrepreneur develop an idea for their price point. If the price exceeds what the ideal customer can afford, the business must find ways to cut costs. However, if the ideal customer values luxury, then the business may justify charging a higher price.

One of the most beneficial uses of the persona, though, is to make marketing plans. Understanding your customer base improves your ability to reach them effectively. When it comes to social media, are they more likely to use Facebook, X, Tik Tok, or LinkedIn? Are they likely to read the newspaper or subscribe to online newsletters? Would they respond to flyers posted around town and, if so, which locations would be optimal? In addition to deciding where to market, businesses must determine how to market effectively. Does the ideal customer respond better to humor or heartfelt messaging? Are there other areas of interest that could overlap with your business to get their attention? For instance, are they likely to be sports fans? What type of music would appeal to them? Should any social or political ideas be integrated or avoided? All these questions can be answered by doing a deep dive into customer discovery and each persona created would yield different results.

While customer discovery is at the core of entrepreneurship and small businesses, it is also important for an economic development organization to consider. Carol Ervin, President and CEO of Grow Ada says, “Customer identification is important throughout every business. In economic development we often say we will take any job creator. However, if you can identify your niche and focus your efforts on that customer, you will be more successful.” Entrepreneurs can use customer discovery as a lens to evaluate their business. This tool helps them focus on their end goal: persuading customers to purchase their product. Investing more thought in this process inevitably leads to better results.

Back to News