Running a business and trying to sell your products or services, without defining your target customer, is like running around the streets of Sydney with your offering in your arms, shouting about it to every Tom, Dick & Harry, hoping to stumble on someone who will just happen to want it.
Doesn’t sound like a fool-proof plan, does it?
But this is exactly what many businesses end up doing.
And what happens?
They run out of money.
They lose motivation because nobody seems to want what they’re selling.
They lose out on their customers to large companies.
Some business owners are afraid that if they target a specific customer, they’ll end up excluding certain people from their offerings. But this isn’t true. All this means is you’re spending your valuable money and energy targeting a more focused group of people who are more likely to buy from you.
This is more affordable, efficient, and effective.
That’s what every business is striving for, right?
Being able to reach more potential clients, and generate more sales, using the smallest amount of resources possible.
If this is what you’re aiming for, read on for our tips on defining your target market.
A great place to start is by taking a look at what problem your business is solving in the market.
You can do this by analysing your product or service. List out the benefits of the features to the potential customer, as well as the wider-reaching benefits of those benefits.
For example, an accountant offers financial services to businesses. The benefit is that someone takes care of all your finances each year for you. This means you avoid stress while saving time, and this time can be used to create more products or market your existing ones, which will lead to more customers and sales, and therefore more money for your business.
Next, make a list of all the people who have a need for those benefits. If you can’t think of anyone, or the market seems too small, then you may need to alter what you’re offering.
And if you’re not sure how your offering truly benefits your customers, why not ask them by sending out a quick survey via email? They might be benefiting from it in an unexpected way that you’d never intended.
If you already have a customer base, this is a great place to start.
Who are they, and what are they buying from you?
Where did they come from?
What are the chances that people like them will also be interested in and/or benefit from your product or service?
Use who’s already buying from you as a baby step to figuring out who is most likely to buy from you. Once you have a clearer picture of who they are, you can go out and target similar people.
There might be many different types of customers that all suffer from the problems that your business solves. This is why you should start by listing them all out, then start organising them into groups e.g. by location, gender, or market sector etc.
Continually ask yourself questions during this process to build up a clearer image of who they are.
What age are they? Are they in education? Are they single or married? Are they male or female? Do they enjoy playing sports? Do they have a high disposable income? Do they travel a lot? Do they spend a lot of time at home? Do they have children?
By the end of this exercise, you want to have one person who resembles your target market. This can be based on an actual person or can be someone entirely made up.
You also want to think about how your product or service will be used by them, and how it will fit into their existing life.
And where can you target them most effectively?
For example, do they regularly read the newspaper, or are they active on social media? Do they eat or socialise in certain places? Are they studying at college?
Remember, the market is crowded out there, so it’s not your offering alone that matters.
People have an abundance of choices these days and are being advertised to hundreds of times every day – often without realising it.
So it’s your job to look at the market and see what else is available that someone might buy instead of what you’re selling.
What’s unique about your offering?
If you can’t think of anything, then something may be off with your target market or your offering. Take some time to do some more work here before targeting potential customers.
Analyse your competitors to see who they’re targeting, where they’re present, and how much engagement they’re creating online. You can use this information to learn from what’s working for them and what’s not, and pivot accordingly.
Okay, so you’ve chosen a target market – high five.
But proceed with caution.
Is this market large enough for the sales you hope to make?
Can people see a real need or benefit for what you’re selling?
Do I understand their pain points sufficiently?
Is it affordable for them?
Can I reach them easily?
It’s important to have a niche market, but it’s equally important to strike a balance and not be too niche.
If you find there are less than a hundred people who fit your criteria, then you might need to re-evaluate your target. Equally, if you have two niche markets, and you’re able to reach both groups with the same message, you’ve probably broken your market down too far.
Defining your target market might seem like a lot of work, and that’s because it is.
But this is what will create a stable foundation for you to reach the potential customers who are most likely to buy from you, and therefore have the highest chance of making a sale.
This will save you time, money, and many a headache in the long run!