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Tips on how to Define Your Business’ Target Market
Posted on 11th July 2017 in Growth
Written by James Marren
Do you have an inner Sherlock? In this blog, we help you take a detective’s approach to demographics to uncover your business’ target market. This is a case we feel Benedict Cumberbatch himself would be proud to solve.
It’s impossible to be all things to all people as they say and this absolutely holds true for your business. It’s crucial to your company’s success that you’re able to identify and meet specific customer needs and effectively communicate this. One common stumbling block that you don’t want to fall into is trying to be too general and targeting anyone who has an interest in your particular service or product. A small business can only hope to compete with the global giants if they precisely target specific niche markets.
You’re not targeting so much to exclude, but rather to focus your precious budget on communicating your brand to a market that is more likely to make a purchase. This will affect decisions over how you position your business including how you price, package, market etc. and will help your business grow much more effectively.
Here are some tips on how to define your target market.
We recommend grabbing the deerstalker and magnifying glass and creating a list that focusses on each feature of your offering and then really examining the benefits each one provides. For example, a company such as Rawpixel offer great images that are more modern and engaging than stock images of the mainstream. The benefit they offer is the ability for a company to use these images to brand themselves as exciting and contemporary. Modern, engaging images that help a business stand out from the crowd will ultimately attract more customers and increase revenue.
This is, of course, a very general initial step, but the people you identify whose needs are met by the benefits you offer are a good base with which to start off from.
Your current client base
What can you learn from your current customers? Why do they buy from you and which ones bring you the most business? Are there common threads that link them? Characteristics that you can pick out to use to identify other people who might also benefit from your offering? What are they saying online in reviews and on social media? You can even ask them directly for feedback. One tool that we like is SproutSocial, as it scours all your social media on your behalf and offers you real-time monitoring of what is being said about your brand. Another great option is Brandwatch which allows you to collect relevant data and discover key insights.
You can also learn a lot from who your competitors are targeting. Not necessarily as a way of going after the same market, but as a way to identify potential niche markets that they have missed. What channels do they operate in and do they have gaps in their offering that you already fill or could potentially move into? How are you differentiating and what’s your USP? Mention is a very powerful tool with a lot of functionality and can help by allowing you to analyse your competition in numerous ways and compare and track your performance against them.
The devil is in the detail as they say and you need to not only establish who has a need for your offering, but also who is most likely to purchase. Whether it’s Facebook advertising, Google Adwords or, most likely, a combination of several avenues, all will allow you to target based on a wide range of demographics and provide valuable feedback on the type of customers you are attracting. The key to gaining good value is in having a strong understanding of the key demographics in your market in relation to your offering. Below are some to consider tailoring your marketing to.
- Ethnic background
- Marital status
- Income level
- Education level
After establishing your base, it’s time to drill down further and establish how your product or service will fit into your target’s lifestyle. We recommend using an empathy map with your team, giving them an opportunity to bring any ideas, data, or insights about your possible target to the table. To stimulate thoughts and ideas, you can ask the group a series of questions such as “What would the user be thinking & feeling? What are some of their worries and aspirations?” etc. Here are some more traits to formulate questions around.
With the results from this process, you want to start building a customer avatar/buyer persona that is essentially a detailed representation of your target customer. You’ll find it extremely beneficial holding this persona in mind when making important decisions about the future direction of your company. You can read more on building an accurate buyer persona here.
Evaluate, test, iterate
Time for Sherlock’s pipe! As you contemplate your selection, first consider if you have sufficient people in your target group and whether their need is met by your offering. Also, can they afford your product and are you able to find ways/channels to communicate to them?
If you answer these questions positively, now is the time to put aside a small percentage of your budget to test your marketing strategy and analyse the response, iterating and refining your target until you are confident enough to put more budget behind it. There are many good tools online to help you analyse your data and to add to those already mentioned, we recommend giving a test drive to Facebook Audience Insights, Google Analytics, Buffer, and HootSuite.
Finally, it’s important to remember that this is a fluid process and you will need to continually monitor your performance and make adjustments to maintain efficiency.
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