Why Everybody Is Not Your Target Market
How many times have you heard a business owner answer anyone or any business in answer to the question - who is your target market? We hear this quite a bit from start-up businesses that haven't sold their product or service for a long time. In reality, no one business can have everyone or every business as its target market. If believed, this can become a problem as the business will end up spending marketing funds and resources on targeting those that will never be a prospect instead of narrowing in on who would benefit the most from the product or service and the problem that it resolves.
Defining Your Target Market
What is your target market? Suppose you select a business or consumer that fits your product or service perfectly. In that case, this is a targeted prospect and can define the target market by the characteristics of that business or consumer.
Once you understand their characteristics, you can apply them broadly to create your target market. As you will find, this will narrow every consumer or business to the types of consumers or companies that are best suited for your product or service.
Here are some questions that can help you determine your target market. By not asking the right questions, you can target the wrong audience.
Business to Business
If you sell to other businesses, the questions below relate to your business target market segments. You can have more than one, as you may have multiple products that would be sold to businesses with different characteristics.
What size of business would most benefit from the product or service? (number of employees, revenues)
What industries are the businesses that would most benefit from the product or service?
In what geographies are the businesses that your product or service is going to be sold? (local, regional, national, international)
Is the product or service applicable to public companies or private businesses?
Consumers
If you sell to consumers, the questions below relate to consumer demographics. As with businesses, you have can have more than one target market for consumers.
What is the sex of the consumer that would benefit from your product or service?
What is the age or age range of the consumer that would benefit from the product or service?
What socio-economic bracket would benefit most from the product or service?
What race, culture, or nationality would the product or service benefit?
What geographies will you sell the product to?
List your products and services and put together the target market's characteristics. For businesses and consumers, there may be more characteristics that will help you narrow your target market. For example - Our two key target markets for business plans are:
A start-up business in Canada that is looking for financing or investment over $250K
A small business in Canada with under $30M in sales that is growing and looking for financing or investment for expansion over $250K
In both cases, the businesses must be private and owner-operated.
Defining your target market will help you determine how to market and sell your products and services.
Suppose your target market was owner-operated manufacturing companies with less than $25M in revenues in Ontario. Would how you sell to them versus an international public company of $1B be different?
Suppose your product target market was to consumers between 18 and 35 from households in the US where the income was $80K and higher. Would you market and sell differently if you had to sell to a different age group in a lower socio-economic level in the Northwest Territories?
The answer to both is an absolute yes. You would sell very differently, and the marketing spend, and mediums would also differ.
Determining Your Marketing
Target markets will help you determine what marketing mediums and even your branding.
Suppose your target market is manufacturing companies. You decide to spend much of your marketing on Facebook and Twitter. In that case, there is a substantial chance that your investment return will be low.
Suppose your product is a retail product targeted at those aged 18 to 35, and you are not utilizing Social Media for marketing. In that case, you are not reaching a good percentage of your market that use Social Media to help them make buying decisions.
Determining Where and How You Sell
Target markets will also aid in determining how and where you might sell your product or service.
Does your target market expect to purchase products online?
Does your target market usually buy directly or through distributors?
Is your product one that would benefit from being in certain retail stores?
If you are selling differently than how your target market is used to buying, this could be a costly mistake.
Summary
Defining your target market is crucial for any business. It is one of the first tasks a business owner should work on for the company once you determine the overall market and who the competition is for your product and services.
Not defining a target market or having too broad a target market can cost you time and money. The more you understand who your real target market is and focus on how to market and sell to them, the more success you will see in your overall sales efforts.