How to identify the target market for your business
It may be a no brainer that any business worth its name has to have a firm handle on who its customers are, but the reality is that often enough this is where businesses goof up. Identifying your target market is, therefore, the very building block of an effective marketing plan.
Knowing one’s target market allows a business to focus its promotional efforts in a manner that will obtain maximum returns. It empowers a business owner or marketing manager to spend their marketing budget to the best effect.
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Identifying the target market for a small business
Small businesses often do not spend the time they should on researching their target market. The fact that it takes a fair amount of time to do so, does not sit easy with business owners who want to hit the ground running.
Unfortunately, this sort of approach costs the businesses in terms of lost sales.
Spending the required amount of time to learn about your customers can make the difference between modest sales and stellar success.
This is particularly true in the digital age, where using data effectively is key to a business’ survival.
Find your target in 4 steps
At first, identifying your most likely customers will feel like guesswork. Over time, your picture of them will come into focus. Follow these steps to begin.
- Look at your current clients.
- Study your competitors.
- Understand the minds of your most likely buyers.
- Put your guess to the test.
Here’s how your business can zero in on its target audience.
1. Look at your current clients
This is a good place to start if you already have customers.
- Use Google Analytics to analyse the types of people who come to your website most often.
- Sift through your sales reports and with the information you have on customers, you can identify them into sizable groups with shared characteristics.
A few markers of your typical customer may include:
- Language they speak
- Disposable income
- Past spending patterns
Knowing their stage in life — student, newly married, parent, middle-aged, pensioner and so on — will also help you decide your approach towards them. The better you know your target customers, the more successful you’ll be in selling to them.
2. Study your competitors
Client profiles of competitors can provide you with some useful insight into the kinds of prospects you should be targeting as well. Chances are good that your target customers are similar to those of companies in your industry.
Are there groups of customers your competitors have successfully tapped that you should be pursuing?
While your access to data on your competitors’ target audience might be limited, you can still discern useful overall trends. You can study their online accounts (comments on social media, verbiage they use on their website and in ads, etc) by which you can obtain a fair indication about the kind of target audience they have in their sights.
3. Understand the minds of your most likely buyers
Learning demographic details about your current customers is just one part of understanding one’s target audience. The other important part is analysing the way they behave.
You must understand what will motivate them to buy your products.
This can be done by studying their interests, likes and dislikes. These, in turn, depend upon factors like their:
- Personality type
- Value system
- Social mores
You can get a fair idea about these traits by studying the psychology of your target audience.
- If for instance, your target audience comprises of students, your marketing message might talk to them about discounts and bargains.
- For a target audience of millennials, you might want to use edgy humour to get your point across.
It’s important for your product or service to meet the unique needs of a specific segment of people. If you get that right, everything else falls into place.
Related: How personas can help your business thrive
4. Put your guess to the test
The quality of the pudding they say lies in its eating. It is all very well to have arrived at a definitive idea about who your target market is, but you won’t know if you got that right unless you put it to the test.
Write social posts aimed at your target and monitor the response. If you have the funds, place a pay per click ad featuring words and images that are relevant to them. Keep refining your ads, emails and blog posts until you hit success. Then do more of that. Over time, your picture of who buys from you will become clearer.
Any business that aligns its marketing plan with a highly refined customer group will begin to witness a change in the kind of success they achieve with it. The speed with which this occurs will vary from business to business.
Identifying the right target audience for your small business goes a long way in ensuring its success. This is particularly important for small businesses, as they have limited resources to spend on promotions. Identifying the right target audience allows you to get the most out of your marketing budgets.
- The first step is to study your existing clientele and guess who your typical customer might be.
- Review your competitors’ marketing materials to get some additional insights about who might constitute your target audience.
- Examine your target’s mindset and values in order to communicate with them effectively.
- Lastly, you need to determine that you have arrived at the right target audience through testing.
A significant improvement in the sales would indicate that you have been successful in identifying the optimal target audience for your small business.