Defining your target market is an important piece to a successful business. Your product or service may appeal to a wide audience, but you may find focusing your communications and advertising on a specific target can be more effective and cost efficient.
If you are not sure how to find your target market, the guide below can help.
What is a Target Market?
A target market, or audience, is a particular group of people that a company wants to sell its product or service to. Instead of trying to reach everyone, a company can use target marketing to put their energy into connecting with a specific group.
Finding the right target market to sell your product to can provide benefits to a company’s bottom line. With the right target market, you can focus your message toward the audience who is most likely to make a purchase. Therefore, eliminating wasteful advertising dollars.
Step 1: Review Your Product or Service
The first step in finding your target market is to create a list of your product’s main features. Then, outline the benefits those features provide. Ask yourself what needs does your product or service fulfill for a potential customer? How does your product differ from your competitors? Is your product affordable? Or higher quality?
Furthermore, think about who might be interested and who may benefit from having access to what you are offering. These are the people that will make up your target market. You may even find that you have multiple groupings that may be interested in your product. For example, sandals may be of interest to people who live at the beach or people who may be planning a vacation to the beach. Therefore, it may be beneficial to set up campaigns that target both groups.
Step 2: Analyze Your Current Customers
The next step is to take a look at who is currently purchasing your product or service. Defining your target market can be as easy as looking at your best customers. Do they have any traits in common? Perhaps a similar age bracket, gender, or location? This can be done by interviewing former and current customers, analyzing your web analytics, and engaging in social listening on social media.
If your product is brand new, research your closest competitors to see if there are any insights you can gather. How are they marketing their products and to whom? You want to avoid making assumptions. Instead, rely on as much data and information that is available to you. Because the more information you have, the easier it is to identify your target market.
Step 3: Create Customer Profiles
Once you have gathered information from the first two steps, you can use that information to create your customer profiles. Customers who find your product or service appealing often share similar characteristics. You can craft a customer profile to uncover those shared traits. Start with demographic criteria and then layer on psychographic criteria.
- Income level
- Geographic location
- Education level
- Marital or family status
Psychographic criteria paints a more wholistic picture of your target market:
Here’s a quick example. A broad target market for a video game company may be educated adults 18-34 years old who enjoy technology and sports. This consumer profile can then be further refined based on the genre of video game. A car racing game may attract males 18-34 who enjoy watching Formula 1 racing and staying up to date on automotive news. From here you can plan better focused marketing initiatives. Your advertising placements can target properties that over-index on interest to males and car enthusiasts. Everything from tone of voice in your communications to advertising targeting parameters should be centered around your target market definition.
Step 4: Optimize for Success
Finally, once you have defined your target market it’s time to test your hypothesis and see how it impacts your business. One way is to utilize paid advertising initiatives leveraging audience data matching your consumer profile. Doing this can help you see if focusing on your target market boosts sales. From there, consistently testing, optimizing and adjusting your target market will be key to achieving marketing success.