Given the current state of the economy, having a well-defined target market is more important than ever. No one can afford to target everyone. Small businesses can effectively compete with large companies by targeting a niche market.
Many businesses say they target “anyone interested in my services.” Some say they target small-business owners, homeowners, or stay-at-home moms. All of these targets are too general.
Targeting a specific market does not mean that you are excluding people who do not fit your criteria. Rather, target marketing allows you to focus your marketing dollars and brand message on a specific market that is more likely to buy from you than other markets. This is a much more affordable, efficient, and effective way to reach potential clients and generate business.
With a clearly defined target audience, it is much easier to determine where and how to market your company. Here are some tips to help you define & understand your target market.
Look at your current customer base.
Who are your current customers, and why do they buy from you? Look for common characteristics and interests. Which ones bring in the most business? If you’re not sure who buys your product or service, someone in your organization almost certainly does. Consider asking your business partners or assistant for this information. It may also be necessary to segment your types of customers. For example, you may categorize customers based on location, budget, or needs.
Check out your competition.
Who are your competitors targeting? Who are their current customers? It’s likely you know who your obvious competitors are. However, some quick searches on Google and social media (particularly on Facebook and Twitter) can often reveal upstart competition you may not have been aware of. Try searching a keyword or two that are related to your industry. See which businesses come up. Browse their “About Us” pages and feature descriptions. This is an easy way to develop an idea of who your competition is and fast.
Analyze your product/service.
Write out a list of each feature of your product or service. Next to each feature, list the benefits it provides (and the benefits of those benefits). If you’ve been in business for any length of time, you should have some understanding of why your product or service exists. Your content should be related to that purpose, too (that means resisting the urge to share irrelevant memes just because they’re funny—if it’s not connected to your mission, it doesn’t belong in your content marketing).
Choose specific demographics to target.
Figure out not only who has a need for your product or service, but also who is most likely to buy it. Think about the following factors:
- Income level
- Education level
- Marital or family status
- Ethnic background
Consider the psycho-graphics of your target.
Psycho-graphics are the more personal characteristics of a person, including:
Determine how your product or service will fit into your target’s lifestyle. How and when will your target use the product? What features are most appealing to your target? What media does your target turn to for information? Does your target read the newspaper, search online, or attend particular events?
Evaluate your decision.
Once you’ve decided on a target market, be sure to consider these questions:
- Are there enough people who fit my criteria?
- Will my target really benefit from my product/service? Will they see a need for it?
- Do I understand what drives my target to make decisions?
- Can they afford my product/service?
- Can I reach them with my message? Are they easily accessible?
Don’t break down your target too far! Remember, you can have more than one niche market. Consider if your marketing message should be different for each niche. If you can reach both niches effectively with the same message, then maybe you have broken down your market too far. Also, if you find there are only 50 people that fit all of your criteria, maybe you should reevaluate your target. The trick is to find that perfect balance.
You may be asking, “How do I find all this information?” Try searching online for research others have done on your target. Search for magazine articles and blogs that talk about or to your target market. Search for blogs and forums where people in your target market communicate their opinions. Look for survey results, or consider conducting a survey of your own. Ask your current customers for feedback.
Defining your target market is the hard part. Once you know who you are targeting, it is much easier to figure out which media you can use to reach them and what marketing messages will resonate with them. Instead of sending direct mail to everyone in your ZIP code, you can send it only to those who fit your criteria. Save money and get a better return on investment by defining your target audience.
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