Having a clearly-defined target market is essential for creating a marketing plan that leads to real growth in revenue in the next 12 months.
However, small business owners often choose to “target” anyone who is even remotely interested in their products or services, or go for really broad categories like “homeowners” and “teenagers”. This approach completely defeats the purpose of defining a target audience and tends to leave you with a higher cost of marketing and a low ROI.
This article will explain the importance of defining your target market, as well as provide you with 7 factors to consider when zooming in on your own target audience.
PART 1 – The Importance of Defining Your Target Market
1- It lets you compete with larger companies
Choosing a specific niche to market to can help you compete with larger businesses (with much bigger marketing budgets).
Chances are if you stick to vague audience categories like “small-business owners”, “homeowners” or “stay-at-home moms”, bigger competitors will be able to outspend you and drown out your message. These larger general markets require more time and a larger budget to penetrate.
Instead, dig deeper and try to zero in on a smaller subcategory that your competition isn’t paying as much attention to.
That’s actually what RedBull did to build their loyal audience. They were struggling with growing sales. Then they decided to focus on one specific target audience (students). The result? Their sales numbers were stellar!
2 – It allows you to be laser-focused on your potential customers
Being laser-focused on your target market means your marketing dollars are likely to generate a much higher ROI than if you were trying to communicate equally with everyone.
Better, more-specific messaging will let you reach potential clients effectively and generate business rapidly because your audience will feel like you really understand their specific needs and problems.
3 – It makes creating a marketing plan much easier
Knowing who you are targeting will make it much easier to figure out the specific steps required in your marketing effort..
You will have a much better idea of what keywords your audience is searching on, , what topics to focus on, and the tone of writing to match the interests of your target audience.
4 – What defining a target market does NOT mean
Sometimes businesses confuse targeting a specific niche with excluding people from your list of potential customers entirely. That’s not the case here – all you are doing is simply focusing your efforts (and marketing dollars) where they matter most.
Good Content Marketing execution will include sections to enable the general audience to feel included.
If someone who is completely outside of your target market ends up being your best customer? Great! Perhaps it’s a clue that you should keep another niche market on your radar, and start expanding your offering soon.
PART 2 – 7 Factors To Help You Define Your Target Market
1 – Determine what problem your company solves
People don’t buy products. They buy solutions to their problems.
That’s why so many marketing professionals recommend highlighting the benefits of your product, not its features. Instead of emphasizing how good your product or service is, you should show your potential customers how you will make their lives (or their business profits) better.
Many times your buyer may not know all the details about the costs of their problem. What happens if they don’t solve it? What are the related problems that they don’t know about?
Writing in detail about the problem will involve your potential customer emotionally. It also builds trust because the problem is about them and not about what you are selling.
Define the problem your business solves, show your audience you have what it takes to solve it, and voilà – you’ve got yourself a new customer!
2 – Develop a profile of your most profitable current customers
Who are your current customers? Why do they buy from you?
Think about the characteristics and interests they have in common – which ones bring in the most business?
Once you have a good idea of who buys your products now, you can expand upon it and figure out who else could benefit from what you’re offering.
3 – Monitor and continuously learn from the competition
Check out who your competitors are targeting, and see if you can glean some insights from that.
Don’t go after the exact same market (the goal is to stand out, after all!), but see if what they are doing can give you some additional ideas about niche markets to target.
4 – Analyze your product or service
We recommend making a list of features your product or service has and reframing them as benefits.
Who would be after these benefits? Whose problems are you really solving? Who really needs the solution or solutions your business offers?
5 – Choose specific demographics to target
Demographics are used to identify population segments by specific characteristics, like:
- Income level
- Education level
- Marital status
- Ethnic background, etc.
Using demographics can be a great starting point for small and large business alike. They can help you figure out who is likely to actually buy your product or service and can aid in putting together the building blocks of a great marketing plan.
6 – Consider the psycho-graphics of your target market
Psychographics are some of the more personal characteristics of your target, including:
They will help you determine how your product fits into your target market’s lifestyle:
- How (and when) do they use your product?
- What features are the most appealing to them? Why?
- What types of media does your target turn for information and entertainment? Do they read newspapers, search for information online, attend particular events?
Considering these factors will allow you to build a more focused marketing plan that works with the specific behaviors, interests and lifestyle choices of your target market.
7 – Evaluate your marketing investment over time
Sometimes we all need to take a step back and see if the market we have zeroed in on is actually the one that will bring us the ROI we are looking for.
Before you jump into creating Facebook ads and calling up trade shows, consider these questions:
- Are there enough people who fit my chosen criteria?
- Will my target audience see the need for my product or service?
- Can my target audience actually afford what I’m offering? How can I do anything to help them afford it (like offering payment plans)?
- Will I actually reach my target audience with my message? If it’s not as easy as launching a Facebook ad campaign, am I prepared to deal with the difficulties that arise?
- Do I really understand what drives my target audience to make decisions? What actually makes them press the “Buy” button?
Part 3 – Your Next Steps
1 – Finding balance
You can absolutely have more than one target market, but your messaging will need to be different for each one. That means that you and your marketing team will need to do a lot more work upfront.
If you are just starting out, having to create multiple separate marketing plans can seem daunting, and there’s no shame in starting with a single subset of your potential customer base, and expanding upon it later.
However, if your target market is smaller than 1000 buyers, you should probably reevaluate your choice – or add another segment to your list before you move any further.
2 – Finding more information about your target market
You can never be too familiar with your target audience. There are a few things you can do to zero in on them even more:
- Search the internet. Where does your target audience hang out? Where do they express their opinions? There’s lots of great info to be found in blogs in forums, as long as you are willing to put in the time and effort required to dig it up!
- Consider surveys. Look for survey results online, or conduct your own! You can ask you current customers for feedback, and get lots of valuable information about what attracted them to your business.
3 – Going Beyond Defining Your Target Market
Defining exactly who your target customers are is the hard part.
Once you’ve got that down, it will be much easier to craft marketing messages that truly resonate with your audience.
If you’d like to learn more about how to increase your marketing ROI through better target marketing, contact us for a Free Assessment on your Digital Marketing.