Given the current state of the economy today, knowing your business’ target market is more important than ever. No one can afford to target everyone. Some say that anyone who expresses interest in your services is who you should target your products and services to, however that’s not the best practice. This will only leave you wasting time and valuable resources on empty leads. If your business continues in this cycle, it will surely begin to sink.
Target marketing does not mean that you are excluding people from your services. It simply allows you to focus your brand’s message, resources, and marketing funds to the audiences that are more likely to buy from you than others. This practice is far more effective than targeting everyone. Overall, it is much more affordable, effective and efficient in attracting the clients you desire and generating steady business.
For example, a digital agency could choose to market towards businesses that work closely with Instagram Influencers with an average age of 20-40 years old and income of $100,000+ living in San Diego, California. To define the market even more, this agency could choose to target only those interested in social media management services. This market can then be broken down even further into niches, depending on what target market the digital agency is attempting to reach. This also goes for ecommerce. For example, an ecommerce company selling travel accessories could choose to market towards men with an average age of 20-30 years old that enjoy international travel with an income of $35,000+ living in Miami, Florida. The market could be defined even more by just targeting those interested in certain methods of travel such as cruises or backpacking.
According to Forbes, clearly identifying target audiences makes it easier to capture someone’s attention because their needs and goals are front and center. With a clearly defined target audience, it is much easier to market and advance your business.
How to identify your target audience
- Look at your current customer base
Who are your current customers, and why do they keep coming back to you? This initial question will likely open the door for others such as:
- What services are most commonly sought after?
- What values do you provide to them?
- What are the needs of my customers?
Asking these questions will give you a clear indication of the exact audience your services cater towards. Once you have these questions answered take a look at their characteristics and interests. Which ones bring in the most consistent business? There is a high possibility that others just like them could benefit from your services as well.
2. Check out your competition
Who are your competitors’ current customers? Who are your competitors’ targeting? Being aware of these aspects will help you craft a marketing strategy that targets a niche they aren’t serving currently.
There are two different types of competitors to be aware of. Direct competitors are rival businesses who offer services and goods identical or nearly identical to what you offer. Indirect competitors are those who offer services and goods that aren’t similar to what you offer, but which satisfy the same customer need. An example of this would be a customer that is looking for something fun to do on a Friday night. A movie theatre, mini-golf, a restaurant, or even Netflix would all be considered indirect competitors. Being aware of competitors that fall into these two categories will give you a leg up against the competition. Finding your competition begins with research. Start with searching your businesses keywords in Google Search and see what other businesses pop up alongside yours. Once you have a list compiled take a deeper dive into your competition by investigating:
- Annual reports
- Prices and promotions
- Government reports and certifications
To keep your business practices up to par with the competition, conducting a competitor analysis at least once a year is recommended.
3. Analyze your product/service
List out the products and services that your business provides. Next to each item list three benefits of that product or services. From that list write out a benefit of those benefits listed. For example, a digital agency provides social media management services. The benefit of that is a cohesive look and feel for their customers’ brand on social media platforms. A cohesive look will increase brand awareness and ultimately attract potential customers to the businesses social media pages and could result in a referral of your services.
Once you have this list make a list of people or businesses that could benefit from your services. This step will give you a base to build on. For example, a digital agency may target businesses looking to increase their social media presence. From that starting point you can get more specific with targeting.
4. Choose specific demographics to target
According to Investopedia, demographics help identify the individual members of an audience by selecting key characteristics, needs, and wants. This then allows companies to tailor their marketing efforts based on specific segments of their customer base. A successful business needs to identify not only who has an interest or need for their service, but also who is most likely to buy into it. Consider the following:
- Education Level
- Marital or family status
Use your demographics to target your marketing towards those that matter. For example, if your business sells life insurance one of your main demographics is age. Your company should be targeting individuals that are a minimum age of 30, as that is the average age most American’s purchase life insurance. Targeting audiences younger than that will likely not get you the return you are hoping for. The same goes for setting the target age too high and targeting elderly individuals. Keep in mind when first identifying your target audience testing different demographics and how they respond will be an integral part of the process.
5. Consider the psychographics of your target
Identifying the psychographics of your target market is a commonly missed step, but it is one of the most important. Psychographics are the attitudes, interests, personality, values, opinions, and lifestyle of your target market. Psychographics are extremely valuable for marketing but can also be useful in case studies and broader social research.
Many businesses have trouble deciphering the difference between psychographics and demographics, hence why it is often skipped when identifying target audiences. In contrast to psychographics which focus on interests and opinions, demographics focus on the structure of a population – factors like race, sex, income, and age. These two sets of data should not stand alone because they both hold valuable information to advance your marketing strategy.
Essentially, if you are aware of how your target audience compares and chooses products in your area, you better structure your content:
- If you know what they don’t care for, you can dismiss those messages or edit them to be more fitting
- If you know your clients’ deepest beliefs, you can target them emotionally with your marketing
- If you know what they watch, listen to, or read you know where to reach them
6. Evaluate your decision
Once you identify who your target audience is, review your results. You can start this process by answering the following questions:
- Do I understand what drives my target to make decisions?
- Can my target audience afford my products/services?
- Are there enough people who fit in my criteria?
- Will my target audience benefit from my products/services? Do they see a need for what I’m offering?
- Can I reach them with my current message? Are they easily accessible?
It’s important to not break your target down too far. Also remember that you can serve more than one niche. If that is the case, you’ll need to figure out different marketing messages for each niche. If you find that you can reach two different niches with the same message, then you’ve narrowed your audience down too far. Also, if you see that your target audience consists of 40 people, then you will want to reevaluate that as well. It’s all about finding the perfect balance.
To begin collecting this information, start searching the web for research other companies have done on your target audience. Check out blogs, competitors’ websites, and public forums that your target audience frequents as well. Doing this will give you a starting point to build from.
The importance of not blending in
The success of your business depends on how well you are able to market to your target customer. You can create the best products, have the best marketing team, and provide innovative services, but none of that will matter if you aren’t connecting with the customers that matter. Setting yourself apart from the competition is what will keep your business afloat in the long run.
Defining your target market is the hard part, but once you identify it all the other pieces of your business will fall into place. You will have a clear idea of what your customers respond to and how to reach them in order to maximize profit. Instead of spending marketing dollars on targeting the masses, spend it on targeting those that matter. Save money and time and get a better return on investment by defining exactly who your target audience is (and isn’t).