Why Entrepreneurs Target 'Everyone' (And How It's Hurting Their Business)

"Who's our target customer?" asks our Account Manager.

"Everyone, of course!" says the client.

"We need to talk."

No one likes to be told that their baby is ugly.

And no entrepreneur likes to hear that their creation is flawed. So, we try to create something that everybody will love.

It kills us to say no to opportunity—to disappoint most people to create the most value for one group of people. It's so hard for us to focus all our resources on one thing: one target market, one unique (is it unique if there's more than one?) selling proposition, one strategy.

As Steve Jobs puts it:

“People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying ‘no’ to 1,000 things.”

But why, despite all the motivational quotes from big-name people, do most business owners still fall into the trap of trying to target everyone?

Why do entrepreneurs try to please everyone?

Human nature

Entrepreneurs are human (who knew) and humans tend to try to please everyone. It's in our nature to crave approval and validation—to fit in. Some even say it's a survival mechanism. Well, maybe in high school. Most adults know that when you try to please everyone, you end up pleasing no one.

Passion for our offering

Back to our ugly baby metaphor.

We assume that everyone in the world cares about our offering the same way we do. We are so passionate about our product or service that we spend countless hours trying to perfect it. Surely everyone will love it, right? Here's the harsh reality: they don't. People have different needs, wants, and tastes. Part of what makes the world exciting.

Yet, we bristle whenever a prospect (who's not a part of our target market) criticizes our brand, tells us how to run our business, or, my favorite, gets offended by our pricing.

It's good practice to listen to feedback, yes, but if we don't have a well-defined target market, we're bound to take every comment seriously and get pulled into hundreds of different directions.

Thinking it's the path to success

By targeting everyone, we expect to open the floodgates of opportunity. We picture lines forming outside our store and our phones ringing non-stop.

If we narrow our audience, foot traffic will dwindle, and we'll lose the chance to talk people into buying from us. Customers are hard enough to come by as it is. Right?

In truth, by being vague about our target market, we lose the opportunity to attract the right kind of people. Those who will love us for who we are.

Reluctance to put on the work

Sometimes, it's plain laziness. It's work not done.

To properly define a target audience, we need to spend hundreds of hours on research, interviews with customers, strategy sessions, trial and error, and constant refinement. Yes, it's a lot of work.

Not only that, the marketplace never stagnates. The moment we think we know who our target market is, something shifts. Our customers' wants, needs, and demands change, a new technology comes out, the economy turns, a global pandemic hits, and so on. It's a never-ending process of trying to hit a moving target.

That's why a business owner who gets complacent and stops learning and innovating will not stay in business for long.

We let trends do the work

Too often, we start businesses only because it's the hot thing at the moment. How many milk tea stores, bike shops, and beauty brands have opened in the past couple of years? We assume that if we just catch the wave, we'll be able to scoop up so much profit that it's impossible to lose. Everyone will buy from us.

Well, guess what? Thousands of other competitors are thinking the same thing. The problem with a gold rush is most people lose money.

In their book Playing to Win: How Strategy Really Works, A.G. Lafley (former CEO of Procter & Gamble) and Roger Martin (dean of the Rotman School of Management) talk about one of the six strategy traps:

The something-for-everyone strategy: attempting to capture all consumer or channel or geographic or category segments at once. Remember, to create real value, you have to choose to serve some constituents really well and not worry about the others.

Yet, most of us fail to realize that even trending businesses need to define which part of that current hot market they serve best. Otherwise, what we have is a me-too business.

Why targeting 'everyone' is bad for business

Now that we know some of the reasons why we gravitate towards people-pleasing activities, let's talk about why it's a bad idea:

It dilutes our brand

Our offering becomes undifferentiated and thus substitutable with many of our competitors. When that happens, our brand starts to dissolve (at its core, having a brand means having a unique identity). Customers will view us as a commodity and force us to compete on price. It's a race to the bottom. The problem with a race to the bottom is you might win or, worse, come in second.

It's wasteful

When we spray and pray, we waste money trying to convince people to buy something not designed for them. If we want to be wise with our marketing budget, we must spend it on a narrow audience with the highest returns, despite having a higher cost per result.

It makes our message vanilla

If we try to please everyone, we don't stand for anything. Our advertising falls on deaf ears. To get attention, our messaging needs to be relatable. To be relatable, we need to know who we're talking to—their needs and desires, their fears and frustrations, their hopes and dreams. When they see our ads, we want their ears to prick up, their hearts to beat faster, and say, "Wow! I've been thinking about that for years. I feel like they know me."

It fails to take advantage of online targeting tools

Love them or hate them, targeted digital ads are here to stay. There was a time when all we had looked something like this: "Women with disposable income aged 18 to 34." That's the key demographic for reality television. It's about as narrow as we can get for that medium.

These days, we can choose our target audience based on location, age, interests, job title, hobbies, search history, and many more. We can create individual ad creatives for multiple narrow targets, launch AB tests, study the data, and keep tweaking the messaging and targeting to find the most effective combinations. These tools are available to business owners willing to put in the work or invest in a team of marketing experts.

Courage and confidence

In his podcast, Akimbo, Seth Godin riffs about choosing the smallest viable market:

“Begin by picking an industry where you are welcome. The second half of this is getting out of the mindset that you need to please the maximum number of people, that you need the biggest possible market. The goal is to choose the smallest viable market, not the biggest one.”

According to Shane Parish of Farnam Street,

“The most powerful skill you’ve never been taught is focus. We all have the same number of hours in a week. The difference is how we use them. Saying no to mediocre opportunities is easy. Saying no to good opportunities is hard. The difference between average results and exceptional ones is what you avoid. You can do anything, but you can’t do everything.”

Choosing and sticking to one target market takes courage and confidence. It takes a lot of guts to create and embrace a positioning statement, make a stand, and announce it to the world. To say, "This is who we are, this is how we do things, and these are the people we create value for. If you're not one of them, it's okay."