While the terms are often used interchangeably, there is a distinct difference between an end-user and a target customer. Learning the difference can lead to a better understanding of the commercialization process. Successful marketing can also lend an advantage when writing SBIR (Small Business Innovation Research) proposals.
In retail scenarios, the target customer and end-user are often the same. But in large scale commercialization of new products and technology, the goal is usually to sell to an intermediary or wholesaler who will then re-distribute the product to the end-users.
|Has Buying Power||Does Not Have Buying Power|
|May Never Use Product||Will Definitely Use Product|
|Is Often A Company/Business||Is Usually An Individual/Group Of Individuals|
The main difference between target customers and end-users is the dollar-power they have behind them. A great example can be found in the medical device industry. While many founders list the individual users of a device as their target customers, this is often incorrect. While the individual device users probably are end-users, the real target customers are the large organizations who will buy the devices in bulk. For this particular example, that means insurance companies, medical provider conglomerates, etc. While patients may eventually use these devices and doctors may prescribe them, these individuals lack the large scale buying power to be presented as target customers. Target customers should be thought of as the place a company intends to make their money. No one is going to meet commercialization goals selling one or two medical devices-a target customer must be large. Plans to market to an insurance company, on the other hand, represent a viable target customer choice.
In discerning the difference between target customers and end-users, think of where the dollars come from. If the entity has mass buying power, it is probably a target customer.
End users are an important part of the commercialization equation, however, they lack the buying power necessary to earn the company the income they seek. Hence, they are still an important aspect to keep in mind while developing a product. While the target customer is the focus of most marketing efforts, remember, the target customer is buying products to sell to end-users. If the product is not something that offers a benefit to end-users it is unlikely the target customer will be interested in purchasing that product. Be sure to keep the end-user in mind throughout research and development, and the target customer in mind during marketing.
Target customers and end-users are two very important and somewhat intertwined aspects of marketing and commercialization. It is important to know and recognize the difference. Determine the role each one plays independently and both play together. This makes it possible to create a stronger, more focused marketing and commercialization plan. When writing a proposal for federal funding, show the reviewers you understand the difference between these two very important players in eventual product commercialization. Your knowledge could go a long way with proving your readiness to the reviewers!
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