There are several reasons why targeting a small customer group can be a successful strategy for businesses:

Increased Focus and Efficiency: By narrowing your target audience, you can concentrate your resources on understanding their specific needs and wants. This allows you to develop more relevant marketing campaigns, product features, and customer service approaches, all of which are more likely to resonate with your target group [1].

Stronger Brand Identity: A sharply defined target audience allows you to build a strong brand identity that speaks directly to their interests. This can lead to a more loyal customer base who feels like you understand them better than competitors who take a scattershot approach [2].

Deeper Customer Relationships: With a smaller group, you can develop deeper relationships with your customers. This can turn one-time buyers into repeat customers and brand advocates who spread the word about your business [3].

Faster Innovation: Understanding a smaller customer segment in detail allows you to gather feedback and iterate on your offerings more quickly. This can give you a significant edge over businesses that are trying to cater to a wider audience with diverse needs [1].

Cost-Effectiveness: Targeted marketing efforts tend to be more cost-effective than generic campaigns. You're not wasting resources trying to reach people who are unlikely to be interested in what you have to offer [4].

It's important to note that targeting a small customer group isn't always the right strategy. For some businesses, a larger target market might be necessary to achieve the scale required for profitability. However, for many businesses, especially startups and those in niche markets, focusing on a well-defined customer group can be a recipe for success.