This is a series about building and testing your messaging, positioning, and value proposition

#1 - Messaging & Positioning Template for Social Impact Leaders
#2 - Messaging & Positioning Template: Core Unmet Needs
#3 - Messaging & Positioning Template: Ideal Client Profile
#4 - Messaging & Positioning Template: Differentiated Solution
#5 - Messaging & Positioning Template: Marketplace Category
#6 - Messaging & Positioning Template: Overcoming Objections
#7 - Messaging & Positioning Template: Testing
#8 - Messaging & Positioning Template: Learning from Data

Ideal Client Profile

Many mission-driven innovators struggle to truly understand their target audience, leading to a critical disconnect between their messaging, what they deliver, and their customers' biggest unmet needs.

This misalignment results in positioning that misses the mark, often emphasizing irrelevant details while failing to engage the most valuable segment: motivated individuals genuinely prepared to adopt and implement new innovations.

The consequence is wasted resources and few satisfied customers, which jeopardizes sustainable revenue necessary to keep the socially impactful innovation alive — potentially leading to its eventual demise.

For instance, a mission-driven startup that indiscriminately targets multiple industries without considering a match between its core competencies and the target's unmet needs may find itself stretched too thin.

Even if they initially attract some customers, they struggle to meet the specific needs of any single market, resulting in high acquisition costs, high revenue churn, and ultimately, a financially unsustainable mission.

At Joyful Ventures, our innovation advisors specialize in helping social impact leaders like you create people-first innovation processes that maximize your and your organization’s impact.

1) Identify your top 2-3 criteria

The first step in generating a hypothesis is identifying the factors most likely linked to success. After generating these criteria, use them to score and prioritize segments.

Based on the scenario that most applies to you, consider the criteria to help you get there.
• Scenario 1: Want product-market fit
• Scenario 2: Have product-market fit; want more speed or efficiency
• Scenario 3: Have product-market fit; want more growth

Scenario 1: No product-market fit

In Scenario 1, an organization lacks consistent customer sales and satisfaction. Your message is not consistently hitting with your target market and/or you’re not consistently closing sales or delivering on results.

Consider the following criteria to prioritize the right segment to help you get to product-market fit

(1) Immediately-accessible Niche

This criterion focuses on how easily you can reach and engage with decision-makers in a potential market segment. Below is a sample rubric, but as noted again, use this as a starting point and modify based on what makes sense to you.

5 = people you can easily access and get feedback from <1 week would use and pay for it it (eg: your own team, friends, family, or existing customers)

4 = access and feedback would take 2-4 weeks

3 = access and feedback would take 1-2 months

2 = access and feedback would take 2-6 months

1 = extended network would use it; hard to access customer base would use it (6+ months)

(2) Relevant Critical Unmet Need

This criterion evaluates how well your solution addresses a pressing problem for the market segment. The rubric awards one point for each of these factors below (up to 5 total).

Segment has spent money or other significant resources addressing the core need you solve

Segment is dissatisfied with existing solutions or workaround to address the core need you solve and actively desires help or improvement

Segment consistently completes discovery and demo meetings with you

Key champions within the segment have supported a compelling business case with a clear return on investment

Segment consistently signs sales agreements, wires money, and begins onboarding in a timely fashion.

Identifying critical unmet needs are discussed more deeply in the second section of the series linked here. I'd encourage you to take a peek and return back there so you have more context on this important criteria.(2) Relevant Critical Unmet Need

(3) Curiosity-driven Expertise and Capabilities

This assesses your team's ability to serve the segment and their core need effectively.

The rubric awards one point for each factor (up to 5 total):

Unique Advantages: Specific strengths or capabilities your team possesses to effectively acquire, serve, and retain customers in this segment.

Deep Insights: Comprehensive understanding of the segment's pain points, solution limitations, and best practices for addressing core needs based on past or current experiences.

Dogfooding: The team actively uses or experiences the product or service in their own work or personal lives, providing intimate knowledge of the problem and solution space.

Team Interest: The project and activities required aligns with the team's personal interests and passions, making the work engaging and enjoyable.

Proven Success: Demonstrated excellence in solving similar needs for the ideal target segment, indicating strong potential for success in this new area.

For more on this, see founder-market fit, the critical prerequisite to product-market fit.

Scenario 2: Have product-market fit, but seek more speed or efficiency.

Product-market fit means you have repeatable sales and onboarding processes, ensuring that your marketing efforts consistently resonate with your target audience, leading to successful discovery meetings that convert into closed deals and effective renewal efforts, all because your positioning and product or service perfectly align with their needs.

Once product-market fit is achieved, an organization may seek more speed or efficiency before growing too quickly.

A few additional criteria can be considered alongside the pre-PMF criteria when selecting your market.

(1) Profitability

This criterion focuses on how much money you make after costs to serve the market segment. Here are some options to measure that.

LTV / CAC ratio

Customer Lifetime Value (LTV) to Customer Acquisition Cost (CAC) ratio measures the overall profitability of acquiring and serving customers. A high LTV / CAC indicates a more sustainable business model with long-term customer relationships.

LTV is the the total net profit a business expects from a customer over their entire relationship. LTV = (Average Purchase Value × Average Purchase Frequency × Average Customer Lifespan)

CAC is the total cost of acquiring a new customer, including marketing and sales expenses. CAC = (Total Sales and Marketing Costs) / (Number of New Customers Acquired)

Gross Margin

The profit margin on products or services sold to this segment. If this does not vary based on your segment, please ignore. In some companies, different products or services are sold to different segments, with varying margins.
• Gross Margin = (Revenue - Cost of Goods Sold) / Revenue

Revenue Predictability

One way to measure this is Monthly Recurring Revenue (MRR) Predictability This assesses the stability and predictability of revenue streams from the segment, such as standard deviation of MRR for that segment.

(2) Satisfaction

This criterion examines the quality of customer relationships.

Customer satisfaction

This is a qualitative metric examining how well a company meets or exceeds customer expectations.

It can be assessed through various metrics, such as
• Net Promoter Score (which measures the likelihood your product will be recommended to others);
• Product-market fit score (which measures how much the segment can’t “live without” the service or product) • simple customer satisfaction rating.

Net Revenue Retention (NRR)

This metric measures the ability to retain and grow revenue from existing customers over time. A high NRR suggests strong customer relationships and product value. NRR is defined as (Revenue at the end of the period minus Revenue lost from churn) divided by Revenue at the start of the period, multiplied by 100.

(3) Speed / Scalability

This criterion looks at how quickly you can serve that segment:

Time / cost to close the sale

Time / cost to onboard and reach north star moment

The north star moment refers to the moment the customer achieved their desired outcome, realizing significant value from the product.

For instance, servicing larger organizations like Fortune 500 companies or government agencies, costs tend to be higher due to the necessity for extensive compliance mechanisms, legacy systems, and dedicated customer success teams.

In contrast, a streamlined process that requires fewer users or types of personas—ideally just the owner and their admin—can significantly enhance success rates.

For more on the concepts in this section, see the series below

This is a series about building financially sustainable business models

#1 - Financial Sustainability Meets Social Innovation
#2 - Tech-Enabled Services Versus SaaS Business Model: A Framework
#3 - Contract to Cash: Why Social Impact Leaders Should Care
#4 - Contract to Cash Tools: Top Criteria and Categories

Scenario 3: Have product-market fit and sustainability, and want more growth.

The main issue you’re likely encountering now is a cap on growth due to the size of the market. The criteria for pre-product-market fit (PMF) can carry over, with additional considerations for market growth and size.

Market Growth
Market Growth refers to the target segment being sizable and growing but largely ignored or underserved by existing solutions. This criterion assesses the potential growth and size of the market for your product, which is important because a growing and large market ensures sustained demand and opportunities for scaling your business.

Market Size

Market Size is calculated by multiplying the total number of actors in this space by their average budget or spending on solving their needs. A larger market size leads to higher average contract values, which translates to more revenue, supporting business growth and profitability. This measures how much customers are willing to pay initially or on average for your product.

Stepping Stone

From a strategic perspective, capturing a leadership position in addressing this need or assisting this segment can serve as a foundation for expansion into adjacent, higher-volume markets.

It can also open up other strategic opportunities, such as network effects or ecosystem advantages that strengthen your competitive position. Investing in this strategy may be worthwhile even if it results in short-term financial losses.

2) Brainstorm Segments

Now that you’ve identified the key items that determine which segments are better target based on your goals, brainstorm the options to choose against.

First, filter out

For impact-driven organizations, common filtering mechanisms can help you ensure you’re only comparing the most relevant segments that have “must have” traits.

These filters can include:

segment’s alignment with your company's mission and values

baseline market growth. Filter out segments with negative or stagnant growth rates

segments and needs that clearly don’t fit your interest areas or expertise at all

Strategy 1: Bottom Up

Start with your current data (“Bottom up”) by identifying your bright spots.

Create a comprehensive list of all your leads and customers. For each contact, clearly indicate their position in your sales process, such as whether they were an inbound, outbound, or referral-based lead, sales discovery, sales close, or renewal phase.

Look for bright spots—those leads or customers that show promising engagement or success. Group these bright spots based on criteria that matter most to you, such as customer lifetime value or cost to service. Or if you haven’t had many sales, prioritize your leads by cost of effort (e.g., inbound or referral), level of critical unmet need, and closest to a sale.

Next, analyze the patterns among these bright spots to determine common observable traits or factors that distinguish them from others. This analysis will help you understand what is effective and where improvements can be made in your overall strategy.

Here are common categories to consider for observable traits:

• Affiliations. Does the organization align with a particular niche with clear needs/expertise (e.g., urban planning or fundraising or community health or use case (e.g., artificial intelligence)? Attendance at key public events, such as recent fundraising efforts or partnership announcements, can also provide valuable insights.

• Language. The organization uses language directly related to the priorities and challenges your top value propositions address in their website, strategic plans, or blog posts. Look for specific instances of this language. The top priorities or challenges you address may be implied by the staff roles they have and are hiring for.

• Demographics. These include industries subject to new regulation that make your offering more urgent, team size, geography, use of certain technology or use cases (e..g, data and AI), and other publicly available data points that predispose them to being interested in your value proposition.

Example - Bottom Up

To apply the audit process in a B2B context for nonprofits, consider a scenario involving a nonprofit consulting firm that specializes in helping other nonprofits improve their operational efficiencies.

The firm begins by creating a comprehensive list of its leads and existing clients, categorizing each contact based on their stage in the sales process, such as initial outreach, proposal submission, or project implementation.

By identifying bright spots—clients who have successfully implemented recommendations and seen measurable improvements—the firm groups these clients according to criteria such as the level of critical unmet needs they addressed or their potential customer lifetime value.

This analysis reveals common traits among their most successful clients, such as those in the community health industry currently going through a digital transformation effort due to a new data privacy law. This is now added to their sub-segment list as area of focus.

Strategy 2: Top Down

Brainstorm new segments based on the criteria you brainstormed (“Top down).

To effectively identify new market segments that align with your strategic needs, start by pinpointing segments that meet your criteria.
• Remix: Explore new combinations or adjacent markets or needs related to your existing categories, as this could uncover untapped opportunities.
• Engage: Talk to your top customers and partners to brainstorm potential adjacent markets or customer segments they might have in mind. Consider leveraging tools like ChatGPT to generate more ideas and insights.
• Spot: Evaluate trends in funding sources, demographics, technology, laws, or other major shifts within the nonprofit landscape, as these factors can reveal new segments or needs that align with your mission and capabilities.

Example - Top Down

To apply the brainstorming strategy for new segments in a B2B context for a nonprofit consulting firm, the firm begins by identifying segments that align with its strategic needs, especially critical unmet needs and immediately accessible niche.

By analyzing its CRM, list of contacts, and tools like ChatGPT, it generated additional segments and teams, like fundraising and development teams and education nonprofits.

3) Score and prioritize segments based on your top criteria

At this stage, you should have a list of your top 2-3 criteria, along with a potentially extensive list of market segments. Begin by assigning weights to each criterion, ranking them from high to low, with your most important criteria receiving the highest weight.

Next, create a table to score each segment on a scale of 1 to 5 for each of your top criteria, using the columns to represent the criteria.

Finally, calculate a “total score” for each segment by multiplying the individual scores by their respective weights and summing the results. This total score will help you identify which segments are most promising based on your prioritized criteria.

Optionally, I strongly recommend you consider the factor “evidence quality.” as you narrow down your top options for testing. See more about it in the first piece in our series.

Messaging and Positioning Template for Social Impact Leaders

Example

To apply the outlined strategy for segment prioritization in the context of a nonprofit consulting firm, the firm first identifies its top 2-3 criteria for evaluating potential market segments related to wanting product-market fit.

Each criterion is assigned a weight based on its importance, with "Critical Unmet Need" receiving the highest weight.

Next, the firm creates a table to score each identified segment on a scale of 1 to 5 for each of the top criteria.

Here’s an example illustrating how that table could look for its top criteria.

ㅤ	Critical Unmet Need	Curiosity-driven Expertise and Capabilities	Evidence Quality
Community health nonprofits	4	3	3
Educational nonprofits	3	2	1
Fundraising and development teams and needs	4	5	1
Data teams and needs	3	2	3

4) Refine and Iterate

For the top market segments you've identified, take a moment to reflect on any aspects that seem off. Rescore the segments, add new ones, or adjust your criteria as necessary.

To enhance your thinking, rough sketch the below to see if it changes your scores. We’ll delve deeper into identifying core unmet needs in the series.

Clearly describe each segment, including how to identify them, and provide examples of organizations or individuals within each segment that you can access.

Crystallize these segment’s top observable traits that are likely linked to your success.

Additionally, specify each segment’s top 1-2 pressing unmet needs. Identify their main challenges or blockers, and the consequences of not solving that need.

If you're feeling uncertain about proceeding with the prioritized sub-segments for a positioning sprint, consider addressing any personal blockers you may have and developing strategies to mitigate risks associated with focusing on these segments.

Remember that this is a time-boxed experiment where you'll be testing market fit and updating your scores through customer discovery and sales processes with these segments. These are just hypotheses, and your confidence in their fit will grow as you gather more data.

Next: Core Unmet Needs

Return back to Core Unmet Needs now that you’ve better prioritized some promising ideal client segments. This dives deeper into clarifying what problem you’re solving and how. This then generates a critical artifact for discovery and testing with this segment.

See the next article in the series below

This is a series about building and testing your messaging, positioning, and value proposition

#1 - Messaging & Positioning Template for Social Impact Leaders
#2 - Messaging & Positioning Template: Core Unmet Needs
#3 - Messaging & Positioning Template: Ideal Client Profile
#4 - Messaging & Positioning Template: Differentiated Solution
#5 - Messaging & Positioning Template: Marketplace Category
#6 - Messaging & Positioning Template: Overcoming Objections
#7 - Messaging & Positioning Template: Testing
#8 - Messaging & Positioning Template: Learning from Data

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Messaging and Positioning Template: Learning From Data Messaging and Positioning Template: Testing

Dan Wu, JD/PhD

Messaging and Positioning Template: Ideal Client Profile