Why Your Business Needs a Defined Target Market

“Everyone” shouldn’t be your target market. Imagine your business sells skateboards in your city. You have 100 flyers that advertise your skateboards. Now, let’s consider two scenarios. Scenario one, you distribute your flyers across the city to anyone and everyone. Scenario two, you distribute the flyers around skateparks in the city. Which of these scenarios is likely to generate more sales? Obviously, the latter, because people around skateparks are more likely to buy skateboards. What’s different between these two approaches? The second approach is an example of optimized market targeting.

What is a Target Market?

To put it simply, a target market is a group of people that you have decided to target with your products or services. Generally, these are people you think or have observed to be the ones that are most likely to buy from you.

That sounds simple but often times defining your target market can be quite a process. What if your business has products or services that have a wide appeal? What if you sell phones? Everyone needs phones, right? If you think that justifies a “we target everyone”, you might be in big trouble.

Identifying your Target Market

The key to identifying your target market is research and a deeper look at statistics. There are a few ways to conduct this research depending on what stage your business is currently in. If you are at the start you can identify your industry’s buying patterns, and look at competitors. If you are at a later stage, one of the best sources for better understanding your market is your own customers. The goal is to figure out the commonalities between them. The chances are pretty good that they will share at least one or two common characteristics or shared interests. Start broad, drill deeper. The more specific you get, the better.

But that’s not all. Looking outwards is one part of the puzzle. Looking inwards is what makes it complete.

Identify the key benefits that your business provides. Ask these key questions:

  • What problem do you solve?
  • What need do you meet?
  • And what desire do you fulfill?

And now ask:

  • Who’s more likely to have these problems?
  • Who’s more likely to have these needs?
  • Who’s more likely to have these desires?

Get this right and your ideal target market should reveal itself. Oh, and make sure the answers to these are not one-liners.

Market Segmentation

Once you have your target market defined. It’s time to group them further. Factors you can segment with:

  • Geographic
    • Continent
    • Country
    • Country region
    • City
    • Cities/towns of a specific population density
    • Climate
    • Areas with specific population thresholds
    • Localized areas (neighborhoods, specific retail outlets)
  • Demographic
    • Age
    • Gender
    • Family size
    • Household income
    • Occupation
    • Level of education
    • Religion
    • Race
    • Nationality
  • Psychographic
    • Personality
    • Attitude
    • Personal values
    • Lifestyle
    • Social class
    • AIOs (Activities, Interests, Opinions)
  • Behavioral
    • Benefits sought
    • Buyer readiness
    • Degree of loyalty to a brand/product
    • User status
    • Occasions

Market segmentation allows you to cater to subsets under your target market. You can have fine-tuned campaigns for a higher degree of personalization leading to more sales.

Should you have a fixed Target Market?

For the most part, it’s better to stay focused. However, the world is ever-changing. Which means you have to respond. Monitoring your insights and adjusting accordingly is beneficial. But if you divert too often you might be hurting your business. Striking the right balance here is what can be the difference between success and failure. Focus on perfecting your niche, you can expand after. Look at Amazon, it didn’t become successful by selling everything. It became successful by first perfecting selling by selling books.

Summary

A clearly defined target market is essential to the success of your brand or business. It helps you get the best out of your marketing efforts, without it you might as well be shooting in the dark.

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