When it comes to the success of any digital marketing or advertising efforts, properly defining your target market is among the most important things you can do. Ensuring that you are talking to the right audience can be the difference in growing your business or not. In this post, we’ll discuss how to properly define your target market.
It goes without saying, but not everyone is your customer. As a business, you probably have an idea of who your ideal customer is. Or at least who you ideally would want your prime customer to be.
That’s what defining your target market in is all about. It’s understanding who your ideal customer is and then determining how to best communicate with them in order to attract them.
Starting to Define Your Target Market
It’s simply not enough to assume that your target audience is anyone who might be interested in your product or service. That’s a start, but what else about them makes that person or group of people the ideal customer for your business? Answering these questions are how you begin to truly define your target market.
When it comes to spending money on advertising, every dollar counts. So, you want to ensure that every dollar spent is reaching the right people. Doing so will help you save money in the long run as well more effectively reach your potential customers.
Let’s say for example that you run a fine dining restaurant. You might find that your target audience is married couples ages 34-45 with household incomes of $130,000 or more per year who live within 5 miles of your restaurant. You could even break this down further by adding the criteria that they are interested in fine dining or red wine as an example. The more narrowly you can define your target, the more effective your marketing will be.
In addition, by defining your target audience, it becomes much clearer how you should market your business and where.
How to Define Your Target Market
Defining your target audience or market doesn’t have to be hard. But, there is some research and work involved in doing so. To help, here are steps on how to define your target market.
Time needed: 2 days
How to Define Your Target Market
- Evaluate who your current customers are
One of the best places to start is with the customers you already have. Who are they? What are they like? What are they interested in? Why do they go to your business?
By first taking a look at your existing customer base, you can begin to get insights on who your ideal customer is. If people are already buying from you, then there are likely other people similar to your customers who are not currently, but that would make sense to.
So jot down a few notes about what your current customers are like. You may find that there is a commonality that can help narrow down on a particular interest.
- Study your competition
There is much that can be learned just by studying your competitors. If you’re in business, you’re in a competition. There’s no question about that.
So what is different from your competitors than your company? What makes their customers choose them? In addition, what are their customers like?
By taking a step back and evaluating your competitors, often you can see how they’re marketing their own business. Maybe you can use a similar approach if their customer base is similar to yours.
- Perform an analysis of your own product or service
Now that we’ve looked at the existing customer base and the competition, next it’s time to evaluate your own business. Whether you offer a product or service, you’ll want to analyze it. What about your product or service are people attracted to? Why do they buy it? What are its benefits and where could it be improved?
Part of attracting new customers is offering what they want or need. Some customers are attracted to the best deal possible and the lowest price. While other customers want the absolute best, no matter the cost. So, who is your customer?
As you’re analyzing your product or service, it may help to list out what needs it fulfills. Then next to each need, write down a description of a person who has that need.
For example, let’s say you run a sporting goods store. Some of the needs that are being fulfilled are equipment for sports teams, or maybe active wear for exercising. Now, who are the people that need those things?
Maybe it’s parents who have children in Little League and need baseball equipment. Or maybe it’s people who go to the gym three times a week and need new training shoes. Whoever it is, writing descriptions is going to help you better understand the type of people whose needs you are trying to fulfill. Understanding the benefits that your business offers and the needs it helps resolve is a key insight in defining your target market.
- Identify demographics of your target audience
Once you have a strong understanding of who buys from you and why, you’ll want to more narrowly define your target by demographic. In other words, you want to attribute some measurable numbers to your potential customers.
Examples of Demographics Include:
– Geographic Location
– Income Level
– Marital Status
Demographics are important to establish because they help you define a criteria for your target. Meaning that you only want to communicate with people who match these attributes. The reason is that they have a higher likelihood to purchase from you, so staying within your target audience will help improve customer conversion.
- Identify psychographic data of your target audience
In addition to your ideal customer’s age, gender and location, you’ll also want to look at psychographics as well. These are more like descriptions of what your target is like as a person. Characteristics, if you will.
Examples of psychographics Include:
– Personality Type
– Affinity Characteristics
This is important because psychographics really dig deep into the mind of your customer. When you can better understand why they like or dislike something, you can better tailor your marketing message to them. In addition, you can better speak to what is truly important to them. Rather than what you want them to find important about your business.
Taking time to get to know your ideal customer can help make your product or service more attractive to that person. It will also more narrowly define who it is you should and should not be marketing to.
- Finalize your target market
At this stage, you have a strong grasp of who would be best to target in your marketing. But before running your next advertising campaign, it’s a good idea to perform an evaluation of your target audience.
Have you turned over every stone? Or is there something missing?
For instance, you’ll want to ensure that there are enough people that are within your target audience to market to. Too few people and you might be casting too narrow of a net.
The opposite is also true. If you find there are too many people within your target, then you might be casting too wide of a net and need to define it a bit more.
Either way, it’s important that you feel strongly about the audience you define. It doesn’t need to be daunting – it just takes a little bit of time and effort.
Now, the last thing you’ll want to do is put everything on paper. Your target audience is something you should reference regularly and reevaluate from time to time to ensure that it’s up to date. It’s okay for target markets to change as business does.
Once you’ve successfully defined your target market, it will be much easier to make decisions on where and how to advertise. Maybe social media makes the most sense. Or maybe advertising on Google is the better option.
At the end of the day, by going through the exercise of defining your target market, you will attract more qualified customers, save more money, and run a more successful business as a result in the long run. This is something most business owners would likely agree is worth the effort.