Kentucky riflemen in Daniel Boone’s day said they knew they hit their target on hunting trips when they heard a squawk from the bushes where the game was hiding. Executives trying to find the right target market should look for that same kind of sudden outburst from customers.

Such a response comes only when a company touches an exposed nerve— some frustration so deep, some need so visceral that, when presented with a solution, the customer reacts out loud. Finding that sensitive spot isn’t easy, but the effort is worth it. Hitting an exposed nerve will generate a surge in demand far beyond what most products experience.

The traditional mode of developing business strategy seldom strikes a nerve. It relies on bright M.B.A.s and rational marketing, which come up with plans that are logically pure and which may produce incremental gains but which often miss the reality inside customers’ heads that could lead to breakthrough improvement.

That reality isn’t always rational, and customers usually can’t tell you just what it is. Who, for example, knew that he needed 3M’s Post-it Notes before using his first one to stick a message on a folder? Who in the 1960s would have guessed that FedEx would have a fleet of hundreds of airplanes today that deliver our packages “absolutely, positively overnight”? Who would have predicted so many of us would carry Palms?

Yet customers’ reality determines whether you get the sale. So, over a 30-year career that includes four turnarounds as chief executive, I developed a process I call Finding the Strategic Nerve. It is a disciplined, iterative way to learn what truly motivates buyers.

Instead of relegating product positioning to the marketing and sales departments, senior executives get directly and deeply involved. They help write positioning statements, based on their experience and judgment about what will hit a nerve, then personally talk to prospective customers in the target market to refine their views. If potential customers who have no relationship with you will talk to you under these circumstances or, better still, return your calls, you know you’ve hit a nerve.

The Strategic Nerve process begins with finding the exposed nerve. The next step is to develop a complementary set of seven strategic elements: product, targeting, price, quality, communications, the economics of the customer, and the economics of the company. Here, I’ll just cover the first two, product and targeting, which are the most important and differ the most from the traditional approach:

PRODUCT. Creating the product element has two components. First is finding the exposed-nerve product position. This focuses on the single essential benefit in the mind of target customers, the grabber idea that immediately establishes the company’s value. The idea can be described in a sentence or two, not paragraphs. It is not a series of benefits or product specifications or value propositions; the idea is to solve only the problem that exists in a customer’s mind.

The problem must be pressing, too. Research has shown that almost all people can hold only five to nine ideas in their heads at one time. So, if you’re trying to solve a problem that is No. 20 on a prospect’s list of to-dos, he probably won’t care much.

Second is creating a set of product specifications that will deliver on the needs of the customer. Companies often get these two components backward. Rather than finding the need and then producing the product, they build the product and then try to find a home for it—an approach that can waste a lot of time and money.

TARGETING. This part of the Strategic Nerve process differs most from the traditional market-segmentation approach when dealing with business-to-business commerce. Rather than develop a value proposition that explains how a product will benefit the entire company that purchases it, the Strategic Nerve process looks for different exposed nerves for each type of target—whether CEO, CFO, CIO, or some other title. A company providing outsourcing might position the service as a cost-saving measure for the CFO, a service enhancement for the chief marketing officer, and a way to focus management attention for the CEO. After all, in the chain of command, few have the same exposed nerve.

This approach to positioning and targeting paid big dividends when I was managing turnarounds, including one at InterTech Information Management Inc. (www.intertech.com), which sells document-management software tools. The product offered customers an enormous payback, yet it wasn’t finding its audience. Sales had been declining for years. We looked for exposed nerves and targets in four industries, and finally hit the right nerve and target in health care.

We discovered that hospitals were under excruciating pressure to process huge piles of medical records and submit them for billing. We learned that hospitals bill Medicare and many insurance companies based on so-called DRG codes. Each is entered by hand by coders, typically highly trained women who work part-time in the back office. The better the coders, the higher the reimbursement the hospitals receive. Trouble is, there are not enough skilled coders to go around. So we came up with a way that hospitals could recruit and manage coders who would work from home, operating more efficiently and costing less money.

Developing the right product was not enough. We had to find the position that hit an exposed nerve and the right target market, which are never obvious. We tested four positions: that we could increase the reimbursements the hospital receives, that we could reduce their backlogs of records to be processed, that we could lower their coding costs, and that we could diminish the likelihood that coders would make mistakes that would leave the hospital liable to prosecution by the government for overbilling. We tested those positions with CEOs, CFOs, and medical records directors. Reducing backlogs was the only one that worked. The reaction to that positioning was exceptionally strong among CEOs and CFOs.

By finding the right positioning and the right target, InterTech went from burning more than $250,000 a month to cash-flow positive in less than a year. Gross margins rose to 98%. The sales cycle dropped to two to six months from nine to 12. The annual revenue run-rate is increasing 20% every month.

Interestingly, but not uncommon, the nerve we had hit had the lowest economic payback for customers. If we had assumed customers were completely rational and had focused on delivering them the biggest benefit, we would have missed the exposed nerve.

The main lessons from targeting and positioning are these:

It’s difficult to predict what will be a nerve. You have to test, retest, then test again.

When a nerve is hit, the results are dramatic.

An exposed nerve may not correlate to financial payback for customers or rational value propositions.

The same product positioned in different ways gets materially different reactions, even in the same target market. As Mark Twain once said about writing, “The difference between the almost-right word and the right word is really a large matter—it’s the difference between the lightning bug and the lightning.”

Hindman says he’ll know whether this column has hit a strategic nerve based on the number of responses he receives. He can be reached at steve@hindman.com.