When you define your target market, figuring out the best places and tactics to market your business is a breeze. Efficiently spending your marketing budget gives you a higher chance of reaching potential customers.
Here are five steps to help you define your business’s target market:
Review Current Customer Data
Reviewing who your current customers are is a great starting point to determine who you should target. People who have similar profiles as your existing customers are more likely to buy your product or service. You already have a wealth of data at your disposal, and you should take advantage of it.
To start, take the data from your customer database and segment them into groups based on similar characteristics. For instance, you can group your customers by age, gender, location, and types of products they purchased.
Once you’ve done that, you should be able to identify customers that are the most “valuable,” like those with the highest average customer lifetime value. What makes this particular group tick? Why do they keep making purchases? Having these insights can help you to continue to target these types of customers.
Other ideas to gather information about existing customers include sending out surveys, conducting interviews, and reviewing any existing feedback (such as ones from social media comments or review websites like Yelp).
Determine Your Product or Service’s Major Market Benefits
Understanding why your product or service is beneficial can help you determine who you should market to. Reviewing your existing customer base is a great starting point, but, if you’re just starting out, you may not have a lot of data to draw from. This is also a great time to dig deeper into other demographics you may not have considered before.
Create a list of all your products or services, and list all the benefits each one provides — get as specific as you can. Let’s say you own a web design company for licensed contractors, and one of your services is conducting website audits. A benefit could be that you offer fast and detailed audits. Doing so means that your client can figure out how to tweak their website to capture more leads. In this case, the benefit of fast and detailed audits is to help your clients fix their website to generate more leads (and ultimately, sales).
Once you have this list, you can then come up with the types of people who may benefit from your offerings. Using the above example, you can target licensed contractors who have websites but aren’t tech-savvy or those who have a web presence and want to understand why they aren’t capturing many leads.
If possible, try to narrow down this list as you continue to define your target market. Identify a couple of target markets to make sure you don’t leave anyone out.
Look at Your Competitors’ Target Market
Other businesses in the same industry or those offering similar products and services can be a great source of inspiration. Looking at who they target will offer insights into any aspects you may have missed, or, more importantly, help you find a niche market your competitors may have overlooked.
When you’re conducting your research, look at your competitors’ marketing — check their website, print advertisements, social media posts, and emails. Ask yourself questions like who are their current customers? And who are they targeting? Compare it to your existing customers and who you’re targeting. Is there anything you can change?
Remember, you’re not trying to copy exactly what your competitors are doing.. Instead, it’s another avenue to glean insights into how you can effectively target qualified, potential customers.
Create a List of Demographics or Create a Persona
Now that you’ve conducted ample research and created an initial list of potential target markets, it’s time to bring it all together.
Using your research, narrow your list down based on specific demographic targeting commonalities you see. Like briefly mentioned above, this could include aspects like age, gender, and location. It can also include income level, occupation, education level, or family status.
Getting more specific by creating a list of your target market’s psychographics will help you when it comes to creating effective marketing campaigns. These more personal characteristics can include your target market’s values, lifestyle, hobbies, and overall personality. Think about how customers use or will use your product or service, what features are most important to them, and even where they turn to for information on anything from recipes to hotel deals. Will they look to social media, conduct an online search, or ask their friends and family?
Some businesses find it useful to create a persona — a fictitious person that consists of all the characteristics of their target market. If you find that useful, consider naming this persona, writing down their worldviews, age, gender, occupation, and values. Don’t forget to include what they would find most compelling about your product!
Review Your Target Market
Before using your persona or target markets to create your next marketing campaign, do a gut check.
Some questions to think about include:
- Will my target market be able to afford my offerings?
- Is my target market large enough?
- Do I really understand what compels my target market to make a purchase?
- Will my target market truly benefit from my product or service?
- Will I be able to reach my target market with my marketing?
The idea here is to ensure that you can answer most of these questions with a “yes.” If you have more than one target persona, that’s fine too.
Defining your target market may take some time, but doing this upfront work is well worth it. You can now understand exactly who you’re targeting, how to reach them with your marketing messages, and how to attract more customers.