Defining your target market

Hitting target market

Photo credit: Hans Splinter via Flickr

Underpinning any marketing strategy is your target market i.e. who your customers or clients are.  But tackling this question is surprisingly difficult for most business owners.  Answers are usually vague and when asked for specifics, many reply with demographics such as gender, age group, income – answers that are not quite enough for strategy formulation.

When I try to tease the answer a little further by asking ‘who needs your particular service?”, the answer is inevitably ‘everybody’ or something of that nature. While ‘everybody’ could potential use your service, having such a broad definition of your target market is not helpful when developing your marketing plan.  If you don’t define your target market and segment that target market even further, you risk having a scatter gun approach and missing the mark – a waste of time and resources.

Today’s post deals with this issue and attempts to provide some guidance.  Throughout the article, I will use the term ‘client’ and ‘service’ but the principles are the same even if you have a ‘product’ and a ‘customer’.

Step 1 – Does your potential target need your service?

Whatever group you come up with, you will eventually have to refine it into segments, but in the first instance, ask whether they need your service?

Target market - step 1

 

Without being biased, if you answer both yes and no, that is an immediate sign that the group needs to be segmented into a ‘yes’ group and a ‘no’ group.  As the flow chart suggests, if you answer is ‘no’, you have to start with a strategy to create a ‘need’ or ‘want’.

In all likelihood, you would have chosen a target market that you already know needs your service.  You know but do THEY know?

Step 2 – Does your target market know whether they need your service?

Target market - step 2

 

Do not assume that your target market is aware of their need!  You may need a strategy to bring this need to the forefront of their awareness.

Note that the strategy in (A) and (B) are subtly different.  (A) is about creating a market while in (B), a market already exists but there is low awareness.

Step 3 – Why should your potential client choose you?

Taking the analysis further if you have already defined a target market that needs what you offer, and is aware of that need, your next question should be why should they choose you?

Target market - step 3

In most cases, you will be operating in a competitive market.  (C1) is therefore your unique selling proposition.  Why would a potential client choose you over your competitor? Think pricing, unique features, specialisation (this is where a very targeted niche comes in very handy!), technology, speed, convenience etc.

In addition, you also need a strategy to help your target market find you.  You may have the best service and a potential target market that is ready to buy, but if you open a shop in the middle of a desert, how are your clients going to find you?  Think of the channels that you will use – traditional media, social media, referrals, alliances etc.  How will you expose your service to your target market?

Step 4 – Refine and segment your target market

If you struggle at any point in the above process, it means your target market isn’t sufficiently refined.  Segment your groups further, and each segment should be put through Steps 1-3.  You may find that each segment needs different strategies and if it all becomes too much, you need to decide who and where you really want to focus your energies and resources.

TIP – Identifying Uniqueness

As you think about what is unique about your product or service, think also about what is unique about your target market.  If there is match, this will be your sweet spot.

TIP – Ask why?

At every stage of the process, ask ‘why’?  The answers should give you valuable insight into your client attributes and help you go beyond describing your target market merely in demographical terms such as age and gender.

Ideal client

What’s the difference between the strategy in (A), (B) and (C)?

The strategy in (A) is like selling ice to an Eskimo.  Difficult but not impossible.  The Eskimo does not need ice but a clever marketer could ‘create’ a need or want.

In (B), take the same Eskimo and a business that sells vitamin supplements.  The Eskimo’s diet could benefit from a variety of supplements, therefore there is a need.  The Eskimo passes Step 1 of the process but the Eskimo isn’t aware of this need.  The marketer now has to bring this need into awareness before the product can even be sold to the Eskimo.  One of the most common mistakes in marketing is skipping Step 2 and going straight to developing strategies in Step 3.  If you find your client resistant to your marketing, your sales spiel, this is a signal that you need to revisit a strategy for (B)

Your ideal client sits in Strategy (C) – where the need and ‘awareness’ of the need is established.  These are clients that are ready and willing.  Generally, if you have a wider reach than your competitors and get to your target first, all other things equal, you will have a good chance converting the target into a client.

Target market segmentation

However, as indicated in the diagram above, sometimes there just isn’t enough ‘fish’ in (C) and the target market is too small.  This is when you revisit the other segments that you may have discarded through the process and expand your target market, but keeping mind, that you will need a strategy to convert (B) to (C)!

—–

This has been a long post but hopefully one that has given you practical steps in understanding your ‘target market’, ‘niche market’, ‘ideal client’, all of which are ‘marketing speak’ that won’t do you much good unless you do the analysis thoroughly.

This topic is an excerpt of a workshop that I was running and as with the nature of all excerpts, it is incomplete.  What has been assumed is that you have clarity about the nature of your product or service and the needs that it meets.  In addition, what is missing is how you put together your strategies after you have identified your (A), (B) and (C) groups.  So consider these issues also as you digest this post.

I would love to hear your comments and feedback!

Download the – Target Market Flowchart

 

www.coachmi.com.au

Coach Mi @ FB

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I’m a business coach passionate about helping women make the impossible possible! Do get in touch. I would love to have a chat to see how I can help.

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