In this post, I will share a complete guide on how to find a target market.
Given the current state of the economy, having a well-defined target market is more important than ever. No one can afford to target everyone. Small businesses can effectively compete with large companies by targeting a niche market.
Many businesses say they target “anyone interested in my services.” Some say they target small-business owners, homeowners, or stay-at-home moms. All of these market targets are too general.
Targeting a specific market does not mean that you are excluding people who do not fit your criteria. Rather, target marketing allows you to focus your marketing dollars and brand message on a specific market or target market that is more likely to buy from you than other markets. This is a much more affordable, efficient, and effective way to reach potential clients and generate business.
However, with a clearly defined target audience, it is much easier to determine where and how to market your company.
I am going to share some guides to help you discover your target market or customers. But before then let us look into what a niche market is.
A niche market is the subset of the market on which a specific product is focused on. The market niche defines the product features aimed at satisfying specific target market needs, as well as the price range, production quality and the demographics that it is intended to target. It is also a small market segment.
Questions to help you find a target market
To find your target market start by answering the below questions:
1. What Is Your Target Demographic? -These are characteristics of your target market profile that consider areas such as age group, gender, and marital status.
2. Where Do They Live? -Determining where your target audience lives will help you with location-based marketing campaigns as well as where to target traditional marketing methods.
3. What Industry Do They Work In? – The industry your target market works in may be more relevant to some business models than others. A simple example of the target market industry would be targeting human resources if your company is selling an employee evaluation tool.
4. How Much Do They Earn? -This question will help you determine the price range of your product down the line. If your target market analysis shows that your ideal customer is in the low- to mid-range salary, you need to ensure that your prices reflect that and not that of a high-range salary.
5. What Are Their Hobbies? – Your answers should include both their hobbies and how they spend their free time such as playing baseball, running marathons or spending time at home with their families.
6. How Do They Get Their Information? – This used to be an easier target market question to answer. But with the introduction of the internet, it has made it more difficult. A target market example for this would be online (social media, online articles, Google, etc.), traditional (newspapers, magazines, word of mouth) and advertising methods (billboards, transit advertising, and media advertising).
7. How Do They Communicate? – Again with the introduction of technology, these methods have changed. It can vary from face-to-face conversations and email to telephone calls. Determining this factor can help with your customer service department in knowing what the appropriate method to contact the customer would be and how quickly they are likely to respond.
8. How Do They Think? – This is a target market question that isn’t always evaluated as much as it should be. When answering this question consider personality type, attitude, values, lifestyle, and behavior.
9. Who Is Important To Them? – Since referrals and peer support are crucial factors in business growth, it’s important to know who your target market is close to. From learning that information, you are now able to strategize ways to reach them as well.
10. Which skills does their job require?– Knowing what type of skills this person needs can help you develop a copy (marketing copy, blog posts, ad content, etc.). If someone needs to know SEO, you may want to create content to help educate them in SEO. A blog post, a free PDF, or a course would all appeal to them and be a good way to get their attention.
11. Which tools do they use? – If you find they use a group of software or other tools in their position, this could be an opportunity to partner with one of the companies that sell that tool. Maybe that person also follows that company’s blog, so getting a guest or sponsor a post on that blog might be a good way to get on that person’s radar.
12. What is causing their need for change? – Did something break, do they need to cut costs, if it’s a company, are they struggling to get customers? What is forcing them to finally make a move?
13. Who do they listen to or look to for advice? – Friends, family, or maybe an authoritative figure? Maybe they follow some celebrities and listen to everything they say. That may be a good opportunity for sponsorship or to hire that celeb for an ad campaign.
14. How Can You Best Reach Your Target Market? – This factors into how your target market profile likes to communicate. Once you determine that, you can take those findings and tailor them to your proposed marketing strategy.
15. What Challenges Do They Face? – By understanding the challenges and frustrations that your target market has, it will help shift the conversation from how they can help you to how your business can help them.
16. Can Your Service Or Product Help Them With These Challenges? – First off, the answer should be yes or you need to reconsider your target audience. If you take the time to answer this question effectively, it can help shape upcoming marketing strategies.
17. What Pushes Them To Make Purchasing Decisions? – To better answer this question, you may also need to consider what influences them to make the final step, and what obstacles might be in their way.
18. Who Had These Customers Before You? – By determining who had these customers before you, your company can learn from their mistakes in order to retain these customers in the long run.
19. What Are Their Biggest Objections To Using Your Service Or Product? – This may be the most crucial question you need to answer. Without answering this question, you will never get the conversions for your business that you want and expect.
How to Find a Target Market: 6 ways to discover your customers
#1: Look at your current customer base
Who are your current customers, and why do they buy from you? Look for common characteristics and interests. Which ones bring in the most business? It is very likely that other people like them could also benefit from your product/service.
#2: Check out your competition
Who are your competitors targeting? Who are their current customers? Don’t go after the same market. You may find a niche market that they are overlooking.
#3: Analyze your product/service
Write out a list of each feature of your product or service. Next to each feature, list the benefits it provides (and the benefits of those benefits). For example, a graphic designer offers high-quality design services. The benefit is a professional company image. A professional image will attract more customers because they see the company as professional and trustworthy. So ultimately, the benefit of high-quality design is gaining more customers and making more money.
Once you have your benefits listed, make a list of people who have a need that your benefit fulfills. For example, a graphic designer could choose to target businesses interested in increasing their client base. While this is still too general, you now have a base to start from.
#4: Choose specific demographics to target
Figure out not only who has a need for your product or service, but also who is most likely to buy it. Think about the following factors:
- Income level
- Education level
- Marital or family status
- Ethnic background
#5: Consider the psychographics of your target
Psychographics are the more personal characteristics of a person, including:
Determine how your product or service will fit into your target’s lifestyle. How and when will your target market use the product? What features are most appealing to your target? What media does your target turn to for information? Does your target read the newspaper, search online, or attend particular events?
#6: Evaluate your decision
Once you’ve decided on a target market, be sure to consider these questions:
- Are there enough people who fit my criteria?
- Will my target really benefit from my product/service? Will they see a need for it?
- Do I understand what drives my target to make decisions?
- Can they afford my product/service?
- Can I reach them with my message? Are they easily accessible?
How to Find a Target Market: Defining your customer
What Is the Target Customer Demographic Profile?
Demographics are extremely important for targeted marketing – obviously, you do not want to be marketing skateboards to seniors or expensive furniture in a low-income housing community. Establish the demographic profile of the target market:
- How old are they?
- What is their gender?
- What is their marital status?
- Do they have children? If so how old?
- Where do they live?
- What is their income level/net worth?
What Are the Target Customer Lifestyles/Attitudes?
Lifestyles and attitudes are also important when determining your customer profile. Working folks have lifestyle priorities and constraints on their time that retired people do not have. Is your audience:
- Employed or retired?
- How do they like to spend their spare time? Also, what are their hobbies?
- What are their shopping habits?
- What other products do they buy?
- Where do they go on vacation?
The web offers a wealth of information from various sources that can provide you with up to date market research and current consumer trends.
What Is the Competition for Your Product or Service?
If your targeted audience is currently buying a similar product or service from one or more competitors, find out why. Is the competitor offering:
- Lower prices?
- Better service?
- Or is there no competition for the product or service at present?
You need to develop your target market as specifically as possible if you’re going to market your product or service effectively. So think of your “ideal” client or customer as a person. Visualize him or her in detail. “See” what he or she does, thinks, and wants.
If you can’t visualize this person clearly and distinctly, then you need to research your potential customer or client until you can. Because until you can define your target market, you won’t be able to make the decisions that need to be made about marketing, such as how, where, and when to advertise.
How to Find a Target Market: Conducting a Market Research
There are several ways that market research is conducted, including:
- Customer surveys – These are conducted in various ways, including online, one-on-one interviews, “Satisfaction Surveys,” and phone calls. Traditional phone surveys are on the decline due to the cost and the low rate of response (most people find them irritating). Many businesses provide a short customer feedback form in a prominent location on the premises (or include the form with invoices), so customers can record their comments.
- Web-savvy businesses use their online presence to conduct market research by encouraging customer feedback on business websites and social media. A short web-based questionnaire about your products and services is a simple, inexpensive, and effective way to survey customers. Make sure the survey is usable from mobile devices.
Social media platforms, such as Facebook, Twitter, LinkedIn, and others provide a dialogue between you and your customers so that you can receive immediate feedback on product and service offerings and make your customers feel like you value their opinions. Unfortunately, social media campaigns can also backfire as people are statistically more likely to post negative comments or reviews than positive ones. Poor customer service and negative product reviews can lead to widespread criticism on social media and be disastrous for businesses.
- Product trials or usability studies – Providing samples of new products to customers in a live setting and gauging the response can be very effective. Direct customer feedback can be used to make changes to the product or determine optimal pricing. Product trials are ideally suited for businesses like food service establishments that wish to test new menu items.
- Focus groups – These are organized sessions with groups of people where a scripted topic or Q&A discussion with a moderator takes place. Focus groups can collect useful information but are difficult to organize; they are also an expensive method of market research for small businesses. Focus groups are increasingly conducted online.
- Direct observation – This involves watching or video recording customers in a natural setting to see how they respond to displays of products or services. Note that for privacy reasons, direct observation by video can only be conducted in a public setting unless the person being surveyed is aware of being video recorded. Direct observation has advantages in that for the purposes of collecting information the customer is behaving naturally (rather than possibly responding in a contrived fashion as they might with another survey form), but it is a very time-consuming method of market research.
All you need to know about customers/market survey
Unfortunately, though most business owners like to think they know their customers, many are really only guessing. And when it comes to forecasting sales — in fact, when it comes to virtually every aspect of business planning — an empirical understanding beats gut instinct almost every time. Now is the time to get the facts.
How to Find a Target Market: Carry out a Market Survey
If you don’t know your customers, then you don’t know your business. You won’t know how to respond if you see changes in your sales patterns. And because it’s so hard to hang on to customers you don’t know intimately, you will forever be chasing new ones. That’s why finding a target market is a crucial step in content marketing.
Professional market researchers generally divide their work into qualitative studies (interviews and focus groups, with free-flowing and open-ended discussions) and quantitative studies (usually surveys). In a perfect world, you would probably do both, using qualitative research to create a survey, the results of which might, in turn, be interpreted using another focus group. Given limited resources, though, it generally makes sense to go quantitative. After all, says Steve Sprague, a marketing consultant in Marion, Iowa, “some data — any data — is better than none.”
How to Find a Target Market: Market Survey strategy
To help you find a target market, you may need to carry out a market survey.
- Define Your Survey Target
First, identify the customers to survey. In general, it makes sense to focus on your best customers.
You might institute a frequent-customer program, in which you offer a discount or other incentive in exchange for a small amount of personal information and an opportunity to contact the customer later.
Sometimes you will want to study specific customers. If, say, sales are flagging, you might study lapsed customers. “Identifying characteristics of your attrition market may help you develop new customers and clients.
- Decide on a Format
There are basically three ways to administer a survey: by mail, by phone, or online. A highly personalized letter is best when the survey population is hard to reach (physicians, say, or senior executives). A phone interview serves well for complex and probing questions that demand interaction between interviewer and subject, but it normally requires professional assistance.
Tips: Be personal, and begin by praising your customers and highlighting the importance of the survey. At the end of the survey, you should offer some sort of reward or incentive — the longer the survey, the more generous the reward.
- Probe Customer Satisfaction
When writing survey questions, take care to avoid introducing a bias that telegraphs the answers you hope to receive. Avoid trade jargon or abbreviations, or at least make sure they are well defined.
Ask open-ended questions – These let respondents ruminate about what they like about your company and what might improve the relationship. Calculate your net promoter score. Ask respondents how likely, on a scale from 0 to 10, they are to recommend your company, product, or service to others. The net promoter score is derived by subtracting the percentage of “detractors” (customers who rate the business from 0 to 6) from the percentage of “promoters” (who rate the company 9 or 10). The greater the difference, the more likely that your company can convert the enthusiasm of current customers into new customers.
Ask for suggestions – Sprague likes to conclude the customer satisfaction portion of a survey with a query like: “What could we do to make your next experience with us extraordinary?” “It stretches their mind and your mind,” he says. “It’s going to help you think of things you haven’t thought of before.”
- Dig for Demographics
The demographic information you seek will depend on which attributes drive your business — these may include age, gender, marital status, educational attainment, household income, and leisure pursuits. Some of these are sensitive topics, and you don’t always need to broach them. For instance, if you know a customer’s Zip code, you can get a rough idea about income and education. If you know the address, you can refine that further by sorting customers into what are called census block groups.
- Test the Survey First
Before you make the survey available to your customers, ask family members and friends to test it for time and clarity, and whether the questions mean what you intend them to mean and are free of bias and the like.
How to Find a Target Market: The right use of survey data
Once you tabulate the results (which happens almost immediately with e-survey programs), patterns should emerge. “If you have 20 answers, and you don’t see definite trends, then you probably don’t have enough data,” says Sprague. You could try to resurvey, using the existing results to write more probing and targeted questions, or you could convene a focus group. Focus groups are also useful for interpreting the results.
Focus, focus, focus. For focus-group testing, it is smart to engage experienced marketing consultants, who will be adept at moderating the conversation. For one thing, your subjects will probably be more reticent if you or your top sales executive is conducting the session. “With a trained focus-group facilitator, you’re going to have someone who will generally script the experience upfront.