Identifying Your Target Market
It’s no surprise that with the current state of the world, defining your target audience is important now more than ever. No one can target everyone, and they shouldn’t try to. Identifying your niche or target market is the first step in creating a sustainable and well-run business. Believe it or not, identifying a target market is something you’ve done ever since you were a child. Remember when you wanted something, maybe a snack or a toy, but you knew your father would say no? In this scenario, you knew your target audience would be your mother, and you knew you’d have to catch her in just the right mood for her to say yes.
Of course, just because you have a target market identified doesn’t mean that others who fall outside of that market are excluded from the product or service you’re marketing; it just means that they aren’t the typical customer you’d expect to have. So, what are the appropriate steps you should take to distinguish your target audience?
Steps to Identifying Your Target Audience
Step 1: Analyze Your Current Customers
The first step in identifying your target market would be to analyze your list of current customers. Although this sounds relatively simple, this is the most important and tedious step in the process. You have to question your customers. Who are they? Why do they buy from you? Are there any commonalities between them?
From there, you also should take a deeper dive into your customer’s demographics. Examples of demographics to analyze would be as follows:
- Marital status
- Number of children (if any)
- Annual income
- Education level
- Living status (homeowner or renter)
Although individually, these demographics may not play a huge role in defining your target market, collectively, they will help you to establish the characteristics of the people who are purchasing your products, and the potential markets and customers you may serve best.
Step 2: Analyze Your Product or Service
You’ll also want to take a deeper dive into analyzing the specific product(s) or service(s) you’re offering. What features do your product/service provide? Once you establish the features that your product offers, you’ll want to make a list of the benefits each feature provides. For example, act as if you’re selling a car. A feature in the car may be a built-in GPS or the alert lights that let you know your car is low on oil, tire pressure, or gas.
But what are the distinct benefits of these features? In the GPS scenario, the benefit would be that if they’re lost or traveling, you have easy access to directions. In the case of the alert lights, the benefit would be that you’re provided a fair warning to fix the issue so that a more serious problem doesn’t arise.
Step 3: Think from Your Customer’s Viewpoint
You also want to consider the motivations of your customers and think from their viewpoint. For example, your target audience is someone interested in high-end vehicles. Their motivation may be to have a luxurious reputation or image. Although this is only one potential motivation for the customer, the point is to identify all of their potential motivations. Put yourself into the customers’ shoes and distinguish why exactly they’d need to purchase your product, or why it may be of use to them.
Also take into consideration the customer’s pain points. How could your product or service potentially resolve the current struggles they’re facing? A customer oftentimes finds themselves making impulsive decisions when they feel the decision will eliminate their pain point. You need to find a way to present your product as the answer to whatever problem they may be facing.
Step 4: Check Out Your Competitors
You may also find it useful to check in on your competitors. Look at their current ads and branding. Who are they targeting, and why do you think that is? Although it may be helpful to go after a target market similar to theirs, it also may be helpful in the aspect that you may find a niche or market that they’re overlooking.
Step 5: Evaluate Your Decision
Once you feel you’ve successfully decided on who your target market is, you need to take the appropriate time to evaluate your business model and product/service. First, you need to ask yourself a series of questions:
- Am I going after the right market? Will our product actually benefit our target market?
- Is my target market too small or too large? Are there enough people who fit into my criteria?
- Can my target market reasonably afford to purchase my product/service?
Distinguishing who your target market is can be a difficult process. The good news is, there’s always room for change. Test out your newly targeted market, and if you recognize a potential problem, restart this 5-step process to try to re-establish a new, or adjusted, target market. Once you know exactly who will buy your product or service, everything else will quickly fall into place, as well!