Costs Associated With Not Knowing Your Target Market

Updated: Jan 5, 2020


Target Customer

How many times have you been asked who your target market is and depending on whether you are business to consumer or business to business, you have answered – anyone or any business? The reality is that this is not true and is usually where a start-up or small business owner can get in the most trouble and end up spending time and money that does not provide you the return you want or need.

What is your target market?   If you could select a business or consumer that was a perfect fit for your product or service - this is your target prospect.  Once you understand their characteristics, you can then apply those broadly to come up with your target market. As you will find, this will narrow every consumer or business to the types of consumers or businesses that are best suited for your product or service.  

Here are some questions that can help you in determining your target market. By not asking the right questions, you can be potentially be targeting the wrong audience. Business

  • 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 as well as privately owned businesses?

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 or nationalities would benefit from the product or service?

  • What geographies can this product or service be sold?

Determining your target market will now help you determine how to market and sell.  If your target market is going to be manufacturing companies that are less than 25M in revenues that are owner-operated in Ontario, how you sell to them versus an international public company of 1B would be quite different.  If your product was best sold to consumers between 18 and 35 from households in the US where the income was 50K and higher, do you not believe you would market and sell differently than you would to anyone of any age anywhere and any socioeconomic level?  The answer to both is absolutely. Target markets will help you determine what marketing mediums you will utilize and even what branding you will use.  If your target market is manufacturing companies and you are spending much of your marketing spend on Facebook and Twitter, there is a very large chance your return on your investment is less tha