Chapter 18: Customer Segment
Osterwald and Pigneur define different types of Customer Segments, and the first two categories are particularly important to us: Mass market vs Niche market.
“Business models focused on mass markets don’t distinguish between Customer Segments,” they write. “The Value Propositions, Distribution Channels, and Customer Relationships [other building blocks in the business model canvas] all focus on one large group of customers with broadly similar needs and problems.” So if you’re, say, Amazon your Customer Segment is so large and filled with so many different kinds of people that you’re casting your net very broadly.
On the other hand, “Business models targeting niche markets cater to specific, specialized Customer Segments. The Value Propositions, Distribution Channels, and Customer Relationships are all tailored to the specific requirements of a niche market.” A business that sells locally-grown produce at your farmer’s market might be an example of a niche market.
My observation has been that too many theaters—professional, amateur, university, it doesn’t matter—behave as if their customer segment is a mass market, not a niche market. The reason for this is that they have no idea who actually comes to their shows, nor are they interested in finding out because they fear they’ll limit their attendance numbers by focusing on a niche. They care about “ticket sales,” sure, “butts in seats,” but it doesn’t matter to them whether or not they are the right butts! This is a recipe for disaster. The number of people who just love theater for theater’s sake, no matter what plays are being presented, is miniscule to say the least. And no, theater isn’t for “everyone if only they’d see the light.” You are in competition for the limited free time of every person who might be interested in your productions. Why would they come to your theater instead of some other theater, or go to a movie, or watch Netflix, or watch their favorite sports team play, or visit a museum, or go out for drinks with friends, or…well, the list is endless.
And so Osterwalder and Pigneur take a strong position on this issue:
Theater is a niche market in a specific place. It is a local, small business. You need to start thinking this way.“An organization must make a conscious decision about which segments to serve and which segments to ignore. Once this decision is made, a business model can be carefully designed around a strong understanding of specific customer needs.”
I’m a big fan of the famous article written by former Wired editor Kevin Kelly in 2008 called “1,000 True Fans.” “To make a living as a craftsperson, photographer, musician, designer, author, animator, app maker, entrepreneur, or inventor,” Kelly writes, “you need only a thousand true fans.” A true fan, he says
In other words, you need to create a business model focused on the development of a niche audience of people who want what you do. Everything else flows from that. This is what I mean by “the right butts!” If you are opening a vegetarian restaurant, you don’t want to spend your time trying to convince your customers to eat vegetables, you want a customer base of vegetarians! Eventually, you can start persuading non-vengetarians that your food is terrific (I have eaten at a very good vegetarian restaurant in Asheville multiple times), but they are not likely to be your super fan. Similarly, your job as a startup theater is to figure out who those true fans are, and how to reach them in order to offer them something they want. If you want 1000 vegetarians, putting up posters at the local butcher shop isn’t going to get it done!“is defined as a fan that will buy anything you produce. These diehard fans will drive 200 miles to see you sing; they will buy the hardback and paperback and audible versions of your book; they will purchase your next figurine sight unseen; they will pay for the ‘best-of’ DVD version of your free youtube channel; they will come to your chef’s table once a month. If you have roughly a thousand true fans like this (also known as super fans), you can make a living — if you are content to make a living but not a fortune.”
The next thing to remember is that, before you have a thousand true fans, you need ten true fans, and those ten true fans tell others and soon you have a hundred true fans. You build an audience of people you know, and who know you, trust you, and whose tastes you wish to appeal to. That will take time.
Novelists have learned this. There are many who make an excellent living writing and self-publishing genre novels that appeal to a passionate group of readers who the author has identified and cultivated. These fans buy every book when it comes out, and often pay extra to have it autographed by the author.
This isn’t new. Charles Dickens, for instance, wrote many of his novels to be published in serial form in his own periodical, All the Year Round. Dickens owned the means of production (check), and his income was dependent on subscription sales—i.e., he had skin in the game (check). Wikipedia tells the story:
Publishing serially (in other words, bringing out chapters in a weeklyor monthly magazine) “made the stories affordable and accessible, with the audience more evenly distributed across income levels than previous.” He wasn’t writing for an audience comprised of wealthy Londoners who could afford to buy his books; he knew that a large portion of the people who would like his books were at the lower end of the economic scale and he wanted to serve them.“In 1859, Charles Dickens was the editor of his magazine Household Words, published by Bradbury and Evans; a petty dispute with them led Dickens to realize that he was at the publisher’s whim, and to decide that he would create a new weekly magazine that he would own and control entirely.”
So ask yourself:
- What are the characteristics of my ideal audience?
Let me give you an example from the theater: the Minneapolis company Ten Thousand Things (have you gotten All the Lights On yet? Let’s go!). In the epilogue, Hensley writes, “I do hope that I have provoked you to think about ‘audience’ differently. I hope you will no longer take them for granted. I hope you will think honestly about who you would like your audience to be and how you might better reach them.” In other words, she’s made a conscious choice of whom she wishes to perform.
How did this come about? As a young theater artist, Hensley was working at an unnamed traditional urban regional theater. “Looking around at the audience before the lights went down,” she writes,
Do you see the thought process? Who do I want in my audience? And then: how to I remove obstacles that might prevent them from coming? So how did Hensley overcome these obstacles? Her theater went to where the ideal audience would be found: shelters, prisons, and adult education classrooms. The title of her book, All the Lights On, reflects the fact that performing in such venues meant using just the overhead lights (you can’t turn off the lights in a prison, for instance), so they performed with “all the lights on.” Hensley wanted to do theater for people who didn’t have access, who thought they weren’t interested, and who believed they didn’t belong. That required her to develop a theater that could overcome those obstacles and beliefs.“I saw mostly well-off, educated white people. Lots of other people seemed left out….I really didn’t want to spend my life on an art form that seemed to be set up to leave so many people out….But we couldn’t imagine how to get such an audience [of left-out people] to come to the theater. The forces against it felt enormous: there was the ticket price of course, but also the fact that this audience, like my [Iowa farmer] grandpa, probably wouldn’t feel comfortable. Seeing it through their eyes, the theater ‘scene’ felt daunting: people were all dressed up, they’d been to college, they knew some mysterious code of behavior that told them when to applaud and when to be quiet. The plush lobby and seats seemed foreign and unwelcoming. My audience would never come. I realized the only way to reach my imagined, caring audience would be to go to them.”
Everything develops from the answer to this single question: “Who do I want to perform for?”
How would I apply this idea to this book? Who are my ideal readers? Well, I described them in general terms in the introduction. But I would need to focus that more closely to start building my 1000 true fans.
One day not long ago I saw an actor post this on Twitter:
That’s the guy. It’s somebody who has worked hard to forge a career the usual way, perhaps had some success, but is starting to run out of energy.“An acting ‘career’ is basically treading water in the middle of the ocean hoping a ship will come by before you run out of energy and just die. I’m not even mad. It just is what it is.”
If I were writing this book in order to make a living (which I am not), then I would start adjusting my approach to seek out more people like him. I might reach out to him to suggest a particular blog post he might like, and if he was interested, then I might ask if he knew others who were experiencing similar frustration. And interacting with them would, in turn, affect what I was offering (consultation? class? book? newsletter? Facebook or Discord group? personal assistance?), what income stream might be best, and so forth.
If, on the other hand, I wanted to focus on, say, undergraduate theater majors, who might be feeling ambivalent about the whole New York thing, all of those aspects would be different, right? Maybe I would reach out to theater educators in liberal arts universities to offer a workshop for their students. Convincing an undergraduate who is struggling to make ends meet to buy a book might not be effective, but maybe offering some free YouTube videos along with an offer to serve as a coach might be worth exploring. Or maybe I’d make my book available free online, and make my income from the universities themselves, who might pay me to offer workshops for graduating seniors.
Everything would be adjusted depending on my choice of Customer Segment.
But if you don’t know who that is—if you’re just doing plays for the faceless “General Public”—then you have no way of focusing your limited resources. You’re reduced to putting up posters and buying newspaper ads.
And how’s that working for you?
