When a business is trying to grow, the instinct is to say yes to everyone. Every enquiry is a potential sale, every request a chance not to lose a customer, so the natural strategy is to serve as broad a market as possible and turn nobody away. It feels like the safe, obvious path to growth - the more people you are willing to serve, the more you will sell. In practice this instinct frequently does the opposite of what it intends. A business that tries to be everything to everyone tends to spread itself thin, dilute the thing it is actually good at, and end up serving a great many customers adequately rather than a well-chosen group extremely well.
The problem with serving everyone is that different customers want different, sometimes contradictory, things. The customer who wants the cheapest possible option and the one who wants the highest quality are not looking for the same business, and trying to satisfy both means compromising on each. Every additional type of customer a business chases adds complexity - more variations to offer, more kinds of problem to handle, more directions in which to stretch limited time, attention and money - and that complexity has a cost. The effort spread across a wide, mismatched range of customers is effort not concentrated on becoming genuinely excellent for anyone in particular, and excellence for a particular customer is usually what actually wins loyalty and word of mouth.
Choosing an ideal customer - deciding who the business is really for - is what makes concentration possible, and concentration is what produces distinctiveness. When a business knows precisely who it serves best, it can shape everything around that person: the product, the service, the message, the whole experience tuned to fit them rather than compromised to fit everyone. That focus makes the business genuinely better for its chosen customers than a generalist competitor can be, gives it a clear identity that those customers recognise and are drawn to, and, perhaps counterintuitively, makes its marketing more effective, because a message aimed at a specific person is far more compelling than one diluted to offend nobody and excite no one.
The hard part is the corollary: choosing who you are for means being willing to say no to customers who are not. That feels like leaving money on the table, and in the short term it sometimes is, which is why it is difficult. But saying no to the customers who are a poor fit - the ones who want something the business is not built to provide, who consume disproportionate effort, who pull it away from what it does well - is what protects the focus that makes the business strong for the customers who are a good fit. Serving a well-chosen group of customers superlatively well is a more durable and often more profitable position than serving everyone acceptably. Deciding whom to serve, and having the discipline to turn away the rest, is not a limitation on growth but a strategy for it.