In this blog post we cover what is a target market, why you need one, and how to define it.
What is a target Market?
Your target market answers the question “Who is my customer?”. If you asked yourself that question and came up with the answer “everyone” or came up with a very broad range of people that can fit that description, it’s time to grab a drink of your choice, sit down, and re-examine that question. Not everyone is or should be your customer. The official definition of a target market is a group of potential customers that share similar characteristics (i.e. location, demographics, income range, gender).
DO I really need to know my target market?
Yes. Absolutely yes, you need to know your target market. Part of understanding a product, and thus knowing how to market it, is understanding who your product is appealing to and who will ultimately buy it. if you know this information, you can create specific messages to attract the people who will be most likely to purchase, and you can focus on the potential of your product while reaching the right audience. It’s highly unlikely that your business has unlimited resources to reach everyone, so identifying your market allows you to focus the resources you do have and get the biggest return on your investment, whether that investment is money, time, or both.
How do I define my target market?
Whether you are in the early planning phases or have an established product, it is never too late to determine your ideal customer and target market.
1. Focus Testing
You can release your product in small batches to a limited amount of people, a practice commonly known as beta testing, to determine feedback not only on the product itself, but also who received the most benefit, or who was attracted most to the product. A focus test is a bit different than a beta test, usually with small controlled groups designed to get as much customer feedback as possible.
2. Look at who is currently purchasing your product
Ok this might seem self-explanatory, but its worth saying. Who you thought your product was for might not be who is actually buying it. Collect data and analyze it to determine common characteristics and features.
3. Figure out what your competition is doing
Your competition can be a valuable resource. The goal here isn’t to imitate what their doing – but instead, to figure out what they are not doing. That gap in the market is a perfect opportunity for you to sell where they aren’t.
4. Choose your demographics to target
Examine factors that collect to create your target market. Demographic information includes info like age, gender, location, income level, education, whether they are married and have kids, their jobs, their ethnicity, and so much more. This information can be speculative (who you think will fit this description) and if you have data from places like Google Analytics, Facebook, and Instagram, it can be compared against the information of who is actively visiting your website and social media channels. Ask yourself if you who you thought was your demographic is matching up to who is actively visiting — the answer can reveal key information that is critical to your overall marketing strategy.
5. Consider segmenting
Once you have your overall target market established, it can be hugely beneficial to further segment who your target market is, calling out specific groups to make your marketing strategy clearer. One way to do this is by creating customer avatars, in other words, creating fictitious people that represent different types of customers within your target market. This can help you visualize who you are selling to.