How To Define Your Target Market
Successful marketing relies on understanding your target market. Who are you selling to? Why should they buy your product? What do they stand to gain?
1. Understand the customer problems that you solve
The starting point in defining the target market for your proposition is to understand the problems that you solve. Once you have a good idea what these are, you can start to work out who is most likely to suffer from these problems.
2. Paint a picture of your target customer
List all the different types of customers that suffer from the problems you solve. Once done, you can start to build up a picture of these customers. Group them by location - for example, high-net-worth individuals tend to live in certain postcodes. Group them by market sector - are they manufacturers, recruitment agents, and so on.
Ask yourself other questions about these people. Are they married? Are they male or female? Do they play golf? Define them in as many relevant ways as possible. 3. Which specific customers will benefit from your offer?
To whom will these problems be most troublesome?
Who will have the most to lose by not dealing with these issues?
If you can demonstrate that the cost of NOT sorting out the problems is GREATER than the cost of dealing with them, then your case becomes compelling.
Take into account aspects like emotional upheaval, stress and the risk to reputation when implementing your solution, as well as a bottom line cost. It is all these factors that make up the value in your offering.
4. Think about niche markets
Today we live in the world of niche. For example, we are no longer prisoners of television schedules. We can watch what we want at our convenience, from almost anywhere in the world. Every person can enjoy a unique viewing experience.
The web is fantastic at delivering personalised products and services, cutting out many of the distribution challenges that previously existed.
These factors mean that it is a more effective strategy to be a big fish in a small pond, rather than the other way round. It will be easier to build your reputation and gain referrals. You will also find you get more from your marketing endeavours.
With what you already know, start to segment your market. Do you want to work:
with particular types of people - high-net-worth individuals, men, women, golfers?
in certain geographical locations - Peterborough, The North West?
around defined market sectors - manufacturers, accountants?
5. What company expertise can you offer?
One way of deciding on the right markets to pursue is to think about your business and its employees.
Do you have particular areas of expertise? For example, do you have a lot of experience in particular markets, such as working with lawyers?
Do you have unique knowledge of a specific geographical area?
Are you better at getting on with certain types of people?
All these factors could help you establish a particularly attractive offering for your target market.
Take an accountant working alone in Manchester, for example. For a start, working all over the country is probably not practical. They may therefore decide to only work with clients in the North West.
It may be that before going it alone they worked in-house for a couple of different entrepreneurial businesses. Therefore, the accountant may decide to make their marketplace 'Entrepreneurs in the North West'.
Suddenly, if you are an entrepreneur in the North West, this is an accountant probably worth knowing. Because the accountant only works in this area, they are more likely to introduce you to the right people and know about schemes and funding available to entrepreneurs.
Meanwhile, by concentrating in this marketplace, the accountant knows which websites to look at and belong to, which publications to read and possibly write for, and which networks to attend. Within this target market it will be quite easy for the accountant to become known. Without limiting their market it would almost be impossible to know where to start.
6. Who are your competitors?
Once you have decided the answers to some of these questions, you must look at the market to see what else is available. The question you must have an answer to is:
Why am I uniquely placed to solve the problem?
It may be that for some marketplaces there is no answer. However, in certain sectors or geographical locations there may be a compelling response to that question.
If you are unable to answer the question, you either have the wrong target market or the wrong offering. In this case, more work will need to be done before you start targeting your potential customers.