You’ve probably already heard that almost half of all businesses fail within the first five years of being open.
This can happen for several reasons, like too little financing, business plan issues, expanding too quickly, or remaining too rigid as the world evolves.
But one of the most crucial mistakes businesses make is not investigating the target market enough. Knowing exactly who you’re selling to inside and out is vital for running a successful business.
In this article, we’ll tell you how to identify your target market so you can create business marketing strategies that help you expand into a successful business.
Keep reading to learn more.
What Is Your Target Market?
A target market is a specific group of people you want your marketing message to reach. Simply put, they are most likely to purchase your product or service. They usually share several characteristics, like behaviors or demographics.
It is essential to define your target market clearly. Although some new businesses might be tempted to “sell to everyone,” this is the fastest way to the bottom.
The more you can clearly define and pinpoint your target market, the better you will understand the business marketing techniques you need to use to reach them.
Starting from any broad category is fine: millennials, soccer moms, or single dads. But your conversion rates will rise as you hone in further and sort out the details.
Remember, getting more specific does not stop other people from buying your product. It just makes your business marketing efforts more effective.
Defining your target market comes from deep research (not gut feeling). You have to find the customers that want to buy from you, even if they aren’t the people you initially set out to sell to.
How to Define Your Target Market
There are several steps and strategies that you can use to find your target market, but we broke it down into simple steps to get you started on your journey. Let’s take a look at the process.
1. Gather Data On Your Current Customers
Although the process can be overwhelming, the simple first step is to start with what you already have. To figure out who wants to buy from you, just look at who is already buying from you.
Once you understand the characteristics of the people in your customer base, you can aim for more people that fit that category. The amount of information you have on them can vary depending on how your customers interact with your business.
There’s a chance you don’t have much information on them, but this doesn’t mean you should add a bunch of questions to your opt-in process just to get more information. This can annoy them and ruin their customer experience, leading to more abandoned shopping carts.
Focus on the information you already have and analyze it to find trends and averages. You’ll find a goldmine of information if you already use a CRM or Google Analytics.
Essential Data Points to Keep In Mind
Age: It’s not essential to get too specific, but find a broad age span that you are paying attention to your brand and purchasing the most.
Location (and time zone): Where do your customers live? Knowing which geographic areas to target helps you understand the best hours to reach them. This is important for your customer service and sales reps.
Language: It’s important not to assume all your customers speak the same language as you. Check what their dominant language is.
Spending power and patterns: How much do your customers have to spend? What is their attitude when they make purchases in your price category?
Interests: What do your customers like to do for fun? What shows do they watch? What other businesses do they purchase from?
Challenges:Figure out what pain points your customers are facing. Does your product or service help them fix those problems?
Stage of life:Are your customers new parents? Teenagers? College students?
2. Incorporate Social Data
Another goldmine of information about your target market can come from your social media analytics. This can help you understand exactly who is interacting with your social accounts, even before they are purchasing customers.
There’s a reason they are interested in your brand, so it’s essential to understand why. Doing this can help you uncover new market segments you didn’t think to target.
Social listening tools can help you find people talking about you or your product without interacting with your brand.
3. Check Out the Competition
Your competition is likely going after very similar market segments as you are. An excellent business marketing strategy is to check in on who’s engaging with your competition.
Three critical things can learn by checking out your competition:
- What markets are they targeting, and if they are the same markets that you are targeting
- Different segments that they are targeting that you didn’t think of before
- How they are positioning themselves in the market
Although you won’t find detailed information on the audiences interacting with your competitors, you’ll get a general idea of what they’re doing and how it works.
This can help you understand which markets to target and the best strategies to get to them.
4. Clarify the Value of Your Product or Service
Although this is a step you should already have done as you prepared your product for the market, it is also vital in marketing your product. You must understand the difference between the features and benefits of your product.
Features are simple facts about your product, while the benefits are its effects on the customer’s life. It’s easy to list features, but people will never buy unless they understand the benefits.
How does it make their life easier? How does it fix their problems?
If you don’t already have these listed for your product or service, start brainstorming and putting together a list. Writing the benefits together with your target audience information will paint a grim picture of your marketing strategies.
For example, if you have a product that keeps a person’s coffee hot, you can be confident that your market will have at least a few segments, like coffee drinkers.
If you’re having trouble coming up with benefits for your product, go straight to the source. You can write a survey and ask them on social media or through an email blast.
Although these things might seem obvious, you might even find that people are using your products for reasons you have never thought of. This can help you form new marketing strategies as well.
5. Create a Target Market Statement
Now that you’ve collected all the information about your audience and product, it’s time to wrap it up into a single statement neatly. Creating a target market statement is the first step in brand positioning.
A brand positioning statement tells you:
- Who you serve
- What value your product offers
- How do you position your offer
- The reason you’re in business
- What sets you apart from the competition
Let’s take a look at Nike’s positioning statement:
“For athletes needing high-quality, fashionable athletic wear, Nike provides customers with top-performing sports apparel and shoes made of the highest quality materials. Its products are the most advanced in athletic apparel because of Nike’s commitment to innovation and investment in the latest technologies.”
There are quite a few things we can take from this statement. They are targeting people who:
- Are active
- See themselves as athletes
- Like to be fashionable
- Want high-quality materials that last long
- Appreciate the latest technology
For now, you don’t need to craft your whole brand positioning statement, but we can put together your target market statement with the information you collected in the steps above.
Try to incorporate all the demographic and behavioral characteristics you already found in your research. Here’s an example:
- Our target market is [gender] aged [age range], who live in [area, country, or type of place], and like to [hobbies, activities, etc.].
This is a loose example of how you can change the identifiers however you like. For instance, gender might be irrelevant regarding your product or service. However, try to add three to four unique and specific behaviors to set your audience apart.
Remember that you may need to create several target market statements if you have different products, services, and market segments.
Start Crafting Your Business Marketing Strategies
Now that you’ve learned the first steps to identifying your target market, it’s time to start the research yourself. Finding your target market will be an invaluable tool to start planning your business marketing strategies in the future.
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