The Need To Define Your Target Market
Whether you are a new entrepreneur or an established business with a healthy customer base, it never hurts to appropriately define your target market. Many new business owners speak against this idea, electing instead to embrace the philosophy that ‘everyone is welcome to their product’ – but that philosophy leads to wasted marketing budgets.
Having a target market does not mean excluding anyone. Simply put, your marketing efforts and budget can be defined to a group of potentially profitable customers. It’s that clear pathway your marketing department will utilize.
Here we highlight 6 ways your business can narrow down and define your target market.
1. Take a Look at Your Product
2. Study the Customers You Have Now
The market is a fickle thing. Sometimes, you can end up getting a different audience than your business originally intended – and you might not notice. Take a look at the consumers choosing your business every now and then. Look for the overlap between the highest spenders and their demographics. There you will find your target market.
3. Consider the Competition
While imitating the competition is rarely a consistent path towards succeeding, there are a few occasions wherein studying what they do is worth the energy. Figuring out how to define your target market is, strangely enough, one of them.
Take the time to study two things about your competition – who they are currently serving, and who their target market appears to be. Once you have a good idea what that is, you can adjust your target market accordingly. If their position is weak, you can adjust your sights and focus on taking the fight to them. Alternatively, if you find that their strength is overwhelming, knowing what the competition is focused on can allow you to discover a niche market that you can use to wedge yourself into the game.
4. Narrow Down the Demographics
Just because someone needs something or has a problem does not mean they will do something about it. That’s because people can live with a lot, and sometimes, the hassle or expense of the solution is not worth the perceived slight improvement. You cannot only look at those who have the problem your product will solve – you have to look at that, as well as the demographic that would actually spend to solve that problem.
Narrow down your specific demographic as much as possible. Age, gender, where they live, even the level of education they reach – all of that information and more will help you further target innovation and marketing. The more specific a message your company can craft, the more responsive your target market will be.
5. Think About the Target Market's Behaviour Patterns
Who your target market is, represents just one part of the picture. What they do and how they think should also play a part in identifying and defining your target market. Without that information, you will target the right people, but your message and product innovation will be inherently flawed.
There is a lot to sort out when it comes to your target market’s behaviour. The kind of personality they generally have will inform the tone and content of your marketing campaign. You will also have to consider what morals or values they tend to hold. E.g. if your target market puts extra importance on saving or protecting the environment – your company will need to ensure that its systems are as green as possible. Or else you risk alienating the audience.
6. Consider Whether the Market is Worth It
Once you have a clear idea who your product is best suited for, you need to make a difficult choice. You need to consider whether or not the ideal target market is worth the effort. You might have an audience willing to buy your product, but there might not be enough people there to ensure you make a profit.
You must also consider whether or not the market understands the value of your offering. Consequently, educating the market will incur additional costs and will likely require changing your approach.
It's Review Time
To conclude, it’s important not to get married to the first target market you define. Pivoting is almost always an option, one that you should take should the initial survey indicate low odds of profitability. What is important is you make the right decision using your head, and not your heart.
Reviewing your target market is something your company will occasionally need to do. It is not something you set and forget. The world changes, technology marches on, and people are subject to change – especially from your competition. Review and identify your potentially profitable customers regularly, to keep sales flowing. Keep up with who your product or service is ‘valuable’ to, and your business will prosper.