Simply put, your target market is the group of people you’re making your products and services for. Other terms used to describe this group are “target audience” and “target customer.”
There are many reasons why you need to identify the people who are willing, able, and looking to buy your product/service. See below:
To figure out if there is a need for your product, service, or idea.
To analyse if the need in the market makes commercial sense to invest in.
To enable you to identify your competition and what market share they command.
See what you can do differently to carve a profitable market share and be competitive
To help you figure out which marketing methods you can use to bolster visibility as a new player as well as how you can use those to increase reach.
As Entrepreneur.com has forewarned in the past, the saying “Shoot for the moon and if you miss, you will land among the stars” doesn’t quite work in the business world. This is because if you do that, you’ll be shooting into the black expanses of space . The power of your brand depends heavily on your ability to deliver a targeted message to a specific group of people that will convert into customers and subsequently, actionable sales. Your target market is the person that will pay you!
One of the biggest mistakes that entrepreneurs make is trying to appeal to everyone. Think about the game of darts: You have to aim in order to hit the board. If you hit the board, you score. And if your aim is very good and you hit the bull’s eye, even better! Whether you’ve just started your business or you’re looking to revamp your marketing efforts, there is one thing you need to secure – a customer base. This is where your target audience comes in. Therefore, identifying and finding your target audience can help set your business off on the right path.
Given the current state of the economy, no one can afford to target everyone. 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 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 revenue.
Here are some tips to help you define your target market.
1. 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? It is very likely that other people like them could also benefit from your product/service.
2. Assess the competition
Who are your competitors targeting? Who are their current customers? Conduct a competitive analysis to get a comprehensive view of the competitive landscape. What are the businesses that offer comparable products and services? How much do they charge? What are they doing differently? Don’t go after the same market. You may find a niche market that they are overlooking.
3. 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). For example, a graphic designer offers high-quality design services. The benefit is a professional company image. A professional image will attract more customers because they see the company as professional and trustworthy. So ultimately, the benefit of high-quality design is gaining more customers and making more money. Once you have your benefits listed, make a list of people who have a need that your benefit fulfills. To whom do you want to sell it? Are you selling to parents? To retirees?
4. 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. As you answer this question, consider factors such as: Age Location, Gender, Income level, Education level, Marital or family status, Occupation, Ethnic background, etc.
You can follow up with crafting a marketing strategy that almost literally speaks their struggle. One that amplifies their aspirations. And connects the dots between what they need and what your product or service can do about it to solve that problem.
5. Consider the psychographics of your target
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?
6. Conduct market research
Analyzing your target market goes beyond understanding your customers — you also have to understand the marketplace. And don’t forget that some of the most helpful data can come from both existing and prospective customers. Tools like surveys, focus groups, and in-person discussions can help you understand what your target market needs, why it is (or isn’t) shopping with you, and what you can do to make your offerings more appealing. You can also look at data from your POS or CRM to glean insights about your customers.
7. 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?
You need to develop your target market as specifically as possible if you’re going to market your product or service effectively. So, think of your “ideal” client or customer as a person. Visualize him or her in detail. “See” what he or she does, thinks, and wants. If you can’t visualize this person clearly and distinctly, then you need to research your potential customer or client until you can. Because until you can define your target market, you won’t be able to make the decisions that need to be made about marketing, such as how, where, and when to advertise.
The Bottom Line
Determining your target market isn’t as simple as guessing who your customers are, or hoping for a certain demographic. Instead, it requires an in-depth review of your products and services, the marketplace, your potential (or current) customers, and more.
Why should people buy the product or service from you? Are you open very late at night so that customers who work long hours can drop by your store? Do you offer free delivery of large items so that walk-in customers don’t have to lug your product home?
When you have the answers to these questions, you should do two things:
1. Focus on your primary market: Many business owners fall into the trap of believing that their products or services are “for everyone”— that is, anyone would be interested in or need the products. But even if your business appeals to a broad market of diverse consumers, you need to identify who your ideal consumer is. After you’ve identified your primary market, your advertising should match that focus.
2. Research your market: Knowing your target audience is critical: Your ads won’t work if they don’t appeal to what your potential customers want or need. Research and find out as much as possible about the people you want to sell to.
Defining your target market helps determine the core needs of potential customers and understanding those pain-points will help you refine your product, service or marketing campaign to address them. This helps you to connect with people who are looking for a product or service that can solve their problem.