People with a business idea usually start from the product or service they want to make and then assume that "anyone could buy it". Asked who the customer is, the answer you hear most often is "everyone who likes coffee", "every SME that needs bookkeeping" or "working women". These sound broad and confident, but they still do not say whom the owner of the idea will call tomorrow morning, where they will go, or what they will say.
This guide follows on from the Lean Canvas and the Business Model Canvas, which give you one block for the "customer segment". It explains how to write that block narrowly enough to test, and what law comes with the segment you choose, because consumers, business buyers, buyers who need a licence, and minors each play by different rules. For choosing among business customers, such as government, large enterprises and SMEs, see choosing B2B customer segments, which covers that in detail.
The core answer
A good first customer segment is a small group with a clear problem that the owner of the idea can reach through channels that already exist, with an identifiable buyer and a real likelihood of paying. It is not the biggest group on paper. The aim of the first segment is to learn quickly whether the product answers a real problem, not to capture the whole market on day one.
The rule (Thai law). The segment you choose determines which law applies. If you sell to consumers, the Consumer Protection Act B.E. 2522 (1979), section 22, sets the rule on advertising: statements must not be unfair to consumers, including false or exaggerated statements. The Unfair Contract Terms Act B.E. 2540 (1997), section 4, provides that a term in a standard-form contract that gives the drafting party an unreasonable advantage is enforceable only to the extent it is fair and reasonable in the circumstances. If you sell to businesses, the parties have more freedom to set terms, but you must look at credit terms and withholding tax. If the product or service falls in a regulated category, such as food, cosmetics, health, education or finance, a licence or registration may be needed before you sell. When you keep a list of interested people, that list is personal data under the Personal Data Protection Act B.E. 2562 (2019), and whoever holds it must give the information required by section 23 and have a legal basis under section 24 or consent under section 19. As for minors, section 21 of the Civil and Commercial Code makes a juristic act done without the prior consent of the legal representative voidable.
Our practical view. Do not let the law be the only reason for choosing a segment, but make it one of the scoring criteria from the start, because some segments need far more time and paperwork than others before the first sale. If two segments score about the same, choose the one you can test faster without asking anyone's permission first.
1. Why "we can sell to everyone" is not an answer
Answering "everyone" creates five problems we see regularly.
- You do not know whom to approach first. Everyone has no address, no LINE group and no trade gathering. A small segment, such as restaurant owners in one market or clinic owners in one neighbourhood, is something you can walk up to.
- The sales message is blunt. A message written for everyone is so broad that no one feels it is talking to them. A message written about the problem of one particular group usually gets answered faster.
- You cannot read the test results. If you talk to 30 people who are all different, the answers contradict each other and you cannot conclude how to adjust the product.
- Price and channel do not fit together. What a student will pay differs from what a factory owner will pay, and the channels that reach these two groups differ too.
- The law gets mixed up. The same product sold to both consumers and businesses needs two sets of sales terms. If you start with every segment at once, the paperwork gets messy from the beginning.
Choosing a first segment does not mean abandoning other segments forever. It means setting an order, just as the Lean Canvas has you write the customer segment and the problem before the other blocks.
2. Segment by problem and situation, not only by age or income
Demographics such as age, gender and province tell you where a group lives, but not why they buy. A more useful approach is to segment by the situation that creates the problem.
| Example of a broad segment | Example of a situation-based segment |
|---|---|
| SME operators | A shop owner who has just won their first large customer and has to issue tax invoices |
| Parents | Parents whose child has just started kindergarten and who need a ride service |
| Health-conscious people | People who have just been advised by a doctor to change their diet |
| Restaurant owners | An owner who sells through a food delivery platform and is worried about the commission deducted from sales |
Situation-based segmentation works better because the situation is tied to the trigger for buying. A person who has just hit the problem is usually looking for a fix, so they listen to offers and decide faster than someone who "might be interested". Ask yourself: who has this problem right now, how are they solving it today, and what do they dislike about it? These three answers tell you more about the value proposition than age or income does.
3. Criteria for scoring possible segments
Write down five to seven possible segments and score each one against the criteria below. Use a simple scale such as high, medium, low; there is no need for detailed calculation. The goal is to make the differences between segments visible.
| Criterion | Question to decide it | Why it matters |
|---|---|---|
| How painful the problem is | What do they lose if they do not fix it, and how often? | A problem that does not hurt rarely gets paid for |
| Ability to pay | Has this group paid to solve problems like this before? Whose budget is it? | Someone in pain with no budget is not yet a customer |
| Reachable through existing channels | Whom do we know, which groups are we in, which events can we attend? | A channel you have to build from scratch takes a long time |
| Buying decision-maker | Who approves, who uses, who pays, and are they the same person? | If the user and the payer differ, you must talk to both |
| Purchase frequency | One-off or repeat, and when? | Determines how many customers you need and what the cash flow looks like |
| Legal and licensing burden | Is permission or registration needed before selling? Any special rules? | Determines when you can start testing |
| Size of the segment | Are there enough of them to find people to talk to? | A segment too small to find people in is unusable |
A hypothetical example: Ms. A wants to offer a service that prepares standard employment contracts and work rules for small businesses. She lists three possible segments: restaurants with several employees, newly opened beauty clinics, and small factories. After scoring, she finds that restaurants have a painful problem but no one is responsible for the paperwork; beauty clinics have budget but need several licences, so their owners are busy with other things first; and factories are hard to reach because she knows no one. She therefore picks restaurants in an area where she already knows some owners as her first segment. This is only a hypothetical example to show the way of thinking, not a conclusion that any one segment is better than another for this kind of business.
4. The beachhead segment and early adopters
"Beachhead" means the landing point an army takes first. In business it is the first customer segment you intend to win, and use as a base to expand into neighbouring segments. Such a segment has these features:
- Its members know each other or gather in one place, for example an association, a LINE group, a market or a neighbourhood, so word of mouth travels fast.
- Its members share enough of the same problem that one answer works for all, without adapting the product for each customer.
- Its members are willing to try something new. Early adopters are people who already know they have a problem and are looking for a fix, even to the point of trying temporary workarounds themselves.
- Once you win this segment, there are neighbouring segments to expand into, for example from restaurants in one neighbourhood to restaurants in other neighbourhoods and then to other service businesses.
A good early adopter is not someone who gives good compliments, but someone who can tell you how they tried to solve the problem last month, how much time or money it took, and why they are still unhappy. These people are the most honest measuring instrument. How to interview so as to separate compliments from real evidence is covered in validating a business idea before a large investment.
5. Write the customer description in one sentence
Once you have chosen a segment, write it as one sentence with four parts: who, in what situation, with what problem, and how they solve it now.
(Example sentence pattern; adapt the wording to your business)
Our customer is [a restaurant owner with several employees in Mueang district]
who [has just hired more staff and has no clear employment documents]
and has the problem [not being sure what documents are needed and fearing a later dispute]
and currently [uses a form copied from someone else, or has no documents at all].
Use this sentence as the filter for every later decision. Advertising wording, channel, price and the list of people to talk to should all be answerable against this sentence. If you cannot write it without using the words "everyone" or "several groups", you have not finished choosing.
6. Where to find the first 20 people to talk to
Before doing anything more, aim to talk to about 20 people in the chosen segment. This number is a rule of thumb to help you see patterns in the answers, not a statistical figure. Sources you can use without paying for advertising are:
- People you already know. Friends, former colleagues and former customers of a previous workplace who are in the target group.
- People who know someone in the group. Ask them to introduce one or two more.
- Online communities and LINE groups of the target group. Check the group rules before posting, and do not send sales messages into groups that forbid them.
- Associations, chambers of commerce, clubs and industry events. This includes events organised by local authorities.
- Where the target group actually is. Markets, wholesale shops, and government offices that people in that group have to visit.
- Service providers with the same customers. For example accounting firms, distributors or building-material shops that can recommend customers.
If you cannot find 20 people within a reasonable time, that is itself information that the segment is hard to reach, which matches the "reachable through existing channels" criterion in section 3.
7. How the law changes with the segment you choose
Consumers versus business buyers
| Topic | Selling to consumers | Selling to businesses |
|---|---|---|
| Main law to check | Consumer Protection Act B.E. 2522 (1979) and Unfair Contract Terms Act B.E. 2540 (1997) | Civil and Commercial Code, according to the contract agreed |
| Advertising | No false or exaggerated statements (section 22, Consumer Protection Act) | Still must not deceive, but the buyer's expectations on technical details usually follow what was agreed |
| Contract documents | Standard-form contracts can be reviewed for fairness | More room to negotiate, but large buyers often send their own contract |
| Receiving payment | Usually paid immediately or before delivery | Usually on credit, with invoices to be issued |
| Related tax | Consumers do not withhold tax | A juristic-person buyer may withhold tax before paying |
The full comparison of B2B and B2C is in the guide on differences in business models (see the end of this section). What matters for choosing a segment is this: do not choose consumers on the thinking that "it's easy because there is no contract". Consumers are the group the law protects most, and unfair sales terms may be unenforceable. Equally, do not choose businesses on the thinking that "they will surely pay because they are companies", because invoices to business customers go unpaid too; see unpaid invoices from business customers. For the terms of large corporate customers, see checking a large customer's contract before signing.
Once you have decided whether to sell to consumers or businesses, the next guide in this series, selling to companies or to consumers: how the business model differs, compares the two in detail.
Products and buyers that need a licence or registration before sale
Some customer segments are tied to products the law controls. If you choose one of these as your first segment, check what you need before the first sale.
- Food and cosmetics. These usually involve the production site, labelling, and registration or notification with the relevant agency.
- Health products or services. There may be limits on advertising claimed benefits and on who may practise the profession.
- Education and teaching. Some forms require permission to set up.
- Finance, payment collection and lending. These are usually activities that need a licence or registration, as the Lean Canvas notes in relation to payment services.
- Transport. Some types require an operating licence.
This guide does not go into which activity needs which licence, because that depends on the product and how the business operates, and agency announcements can change. Check the latest announcements with the responsible agency before you start selling. Our related service is in business licences.
If the segment you like carries a heavy licensing burden, that does not mean you must drop it. It means you should include the licence waiting time in your plan and choose a way of testing that does not need real sales first, for example interviews and collecting a list of interested people (without taking money and without delivering a product).
Contact lists are personal data
From the very first conversations, the owner of an idea tends to keep names, phone numbers, LINE accounts and emails. These are personal data, and whoever keeps them is a data controller under the Personal Data Protection Act B.E. 2562 (2019). In practice:
- Tell people before or at the time of collection what you collect, what you use it for, how long you keep it, who may receive it, and how they can exercise their rights (section 23).
- Have a legal basis for collecting and using the data (section 24) or ask for consent under section 19, which must be separate from other text, in readable language, and not a condition buried in a long message.
- Marketing messages should usually have consent separate from ordinary transactional notices, and people should be able to withdraw consent easily.
- Collect only what is necessary; do not ask for an ID card number or date of birth if you do not need it yet.
- Do not buy a list and send sales messages without checking whether the seller of the list has the right to pass it on, because the person who uses it must have their own legal basis.
- If your target group includes minors, check the specific conditions in section 20 of the same Act.
A checklist for complying with this Act across your whole system is in the PDPA compliance checklist for businesses, and our related service is PDPA compliance.
Minors as customers
If your target group is students or young people, you need to know that a minor in civil law is a person who has not reached majority, which under sections 19 and 20 happens on reaching the age the law sets or on marriage under the stated conditions. Section 21 of the Civil and Commercial Code requires a minor to obtain the prior consent of the legal representative before doing a juristic act, and if consent is not obtained, the act is voidable, meaning it can be avoided later. There are exceptions, such as section 22, under which a minor may act alone where the act merely gains a right or discharges a duty, and section 24, under which a minor may act alone in matters appropriate to their station in life and necessary for their own living.
In practice, a minor buying a low-priced item with money from a parent is normal. But selling a continuing service, or a contract with long-term obligations, directly to a minor risks being avoided, so design it so that a parent or guardian agrees or at least is aware. This is why some businesses whose users are young people have to separate the "user" from the "payer" at the point of choosing the segment.
When the chosen segment requires direct selling to individuals
If your way of reaching the first segment is to call them, message them directly, or sell through chat, you may fall under direct marketing as defined in the Direct Sales and Direct Marketing Act B.E. 2545 (2002), which has conditions on registration and consumer rights, with exceptions under ministerial regulations in some cases, depending on the way of selling and the seller. Check the latest conditions before you start selling. Details on online channels are in selling on a marketplace or your own website.
8. Use the chosen segment to continue the Canvas
Once you have the segment and the customer sentence, go back to your Canvas and revise the other blocks to match.
| Block | What to go back and check |
|---|---|
| Value proposition | Does it answer this segment's problem directly? Does it use this segment's own words? |
| Channels | Do they reach where this segment actually is? |
| Customer relationships | Does this segment need close support, or can it buy by itself? |
| Revenue streams | Who pays, and is it one-off or recurring? |
| Cost structure | What does it cost to reach this segment? Is a licence needed? |
To work out what is left from one job once the often-forgotten costs are included, see calculating cost per sale before starting a company. If you want to turn the Canvas into a business plan you can use with a bank or co-investors, see business plan preparation.
9. When to change segment
Set the criteria in advance as countable behaviours, not feelings. For example:
- Change segment when you have talked to the planned number of people in the segment and almost none can tell you they have ever tried to solve this problem, or none is willing to schedule another conversation.
- Change segment when you find that the person who feels the pain and the person with the power to pay are different people, and you cannot reach the payer at all.
- Change the way you reach them when the segment is good but the channel you use does not get to them.
- Keep the segment and fix the offer when people in the segment agree on the problem but do not like the solution you offer.
- Expand the segment when you have paying, repeat customers in the first segment and people outside it start contacting you on their own.
When you change segment, remember to check the new law under section 7 before you start selling, and keep a record of what evidence led to the change so you do not circle back to re-testing the old segment unnecessarily.
10. Checklist for choosing your first customer segment
- Write at least five possible customer segments, divided by problem and situation
- Score every segment on pain, ability to pay, reachability, decision-maker, frequency, legal burden and size
- Choose one first segment and write the four-part customer sentence
- Name at least five real people in this segment you will contact this week
- Set a target of talking to about 20 people in the segment, with the sources to find them
- Check whether this segment is consumers or businesses, and which main law is involved
- Check whether the product or service needs a licence or registration before sale
- Prepare a short privacy notice and a way to ask for consent for the contact lists you keep
- If the segment is minors, decide how a parent or guardian will be informed or will agree
- Write the criteria for changing segment as countable behaviours before you start testing
Further reading
- What is a Lean Canvas — write the problem and customer segment blocks before choosing a first segment
- What is a Business Model Canvas — see how the chosen segment affects the other blocks
- Validating a business idea before a large investment — the next step after choosing a segment: interviews and evidence that people will pay
- Selling to companies or to consumers — a detailed comparison of the two models
- Choosing B2B customer segments — if you sell to businesses and must choose among government, large enterprises or SMEs
- PDPA compliance checklist for businesses — for collecting contact lists of interested people
A good first customer segment is a small group with a real problem, reachable through channels you already have, and the law that applies to that group should be checked before the first sale, not after a problem arises.
We help people starting a business write business plans, check what licences a product or service needs before sale, and prepare the contracts and terms for the chosen customer segment. For an initial consultation, call +66 92 254 2045 or send us the details. See also business plan preparation and business licences.
This guide is published by Suwanvara Law Firm — a Khon Kaen law firm established in 1986. General information only, not legal advice on a specific matter.
