You may recall in a previous blog that we discusses how a marketing and sales funnel is so important is because you don’t want to simply try selling to every person in the world. As great as your product or service may be, only a certain portion of people are going to be interested in it, so you don’t want to waste time, money, and resources trying to sell to people that will never become customers of yours.
The same is true for our marketing strategies: we don’t want to try marketing to everyone in the world. Instead, we want to define our target audience and focus our marketing strategies and efforts on them. This allows us to manage our limited cash and resources, and get more out of that limited cash and resources. It also ensures that the leads we draw into our marketing and sales funnel will be more likely to convert into paying customers.
Defining your target market is largely related to how you have positioned your product or service in the marketplace.
You can create a product positioning map of your own, using the two criteria that you think your potential customers will most likely compare your business to your competitors. It is also a tool you used to make sure that you are looking for “blue ocean” opportunities to differentiate yourself from your competition.
This product positioning map is a good place to start when trying to understand your target market. For example, if you positioned your product as high quality and high price, that is going to appeal to a different target market than your competitors that might be providing lower quality at a lower cost.
Now that you understand where you would like to position your products or services in the marketplace, you want to start determining that type of person that you think will be most interested in your business offering. There are two primary ways of defining your target market.
The first is to look at basic demographic characteristics of your potential customers. What age range are they most likely to be? Are they males or females? What profession are they in? How much money do they earn? Where do they live? Do they have children? These are just a few examples of basic characteristics that may define your target market, but there may be others in addition to or instead of some of the ones listed here.
The second way of defining your target market is to look at their behavioral characteristics. In other words, what actions might someone take that would indicate to you that they might be interested in your product or service? For example, what hobbies or interests might suggest that they would also be interested in your business offering? Are there things they may have purchased in the past that would make them more likely to want your product or service? And what might they be researching or reading on the internet or social media?
Here’s an example of how you might define your target market using these different criteria. Let’s pretend you are selling low-cost graphic design and marketing services. Let’s also say that in your product positioning map, you have positioned your business to provide lower cost and more innovative marketing services for small businesses that can’t afford larger marketing firms. You may decide that you are targeting small businesses in your immediate town or community because you would like to build strong relationships with them to ensure repeat business. You may decide that older small business owners are good targets because they are not as good with graphic design and marketing as younger business owners are, so may find more value in your services as a result. Finally, you may decide to target people in your community who have done internet searches or read articles related to marketing and graphic design for small businesses.
This is just one example of how you might define your target market. Notice that you don’t necessarily need to use every possible criteria when defining your market – you just want to use the ones that best describe who your ideal buyer is. Also notice that you may define additional criteria that are not listed here. This list is just meant to get you started as you think about your target market.
One final note: you may not have only one target market. You may find that there are multiple different types of people that may be most interested in your product or service. That’s okay and it’s very common to be the case. You just want to make sure that you’re not focusing on too broad of a group so that you can be sure to make the best use of your marketing resources, expenses, and time. As your business grows, you will learn from experience which of these target markets are your most common and most profitable customers.