Determining Your Business’s Target Market – Why It’s Necessary and How To Do It
How can your business identify its target market? Follow these seven simple steps.
Imagine a company, let’s say a mortgage brokerage, had been running ads on Facebook to a broad audience. Their ad read, “Get into your dream home today.” They couldn’t understand why so many calls, emails, and messages they were receiving were from people looking for a real estate agent.
Each day, they were losing valuable time referring people to local real estate professionals instead of closing on potential customers. This company was spending good money on these Facebook ads only to lose revenue as they were forced to field calls from people looking for a service they didn’t offer. Where did they go wrong with this marketing campaign? What should they have done differently?
This example is a clear indicator that a target market wasn’t specified and the campaign’s success inevitably took a huge hit. Had the company decided to identify its target market beforehand, it likely would have received calls from people looking for their exact service.
While it may seem that getting your business in front of as many people as possible is a good thing, it’s not always the best way to build brand awareness. Spending a little time identifying those most likely to buy your product or service is a more cost-effective way to generate leads.
When you’re targeting an audience that is too broad, you’re spending valuable advertising dollars reaching people who aren’t as likely to convert into paying customers. When you narrow your target audience down to the people looking for exactly what you do or sell, a larger percentage of contacts you receive will be from people searching for your business’s specific goods or services. This is called identifying your target market.
How To Determine Your Target Market
So, how can your business identify its target market? Follow these seven simple steps:
1. Analyze your existing customers
When you look closely at your existing customers, patterns will emerge that will tell you more about your target market.
2. Assess your competition
You can often gain a lot of insight from looking at the market your competitors are targeting.
3. Consider narrowing your target market by age
Many goods and services appeal to specific age groups. For instance, college courses tend to appeal to younger adults, which means an advertising campaign for a college would be more successful if it targeted those in the age range of 18-40 than it would if it targeted people over 50. Similarly, a renovation company probably doesn’t need to advertise to 18-year-olds as they are far less likely to own their own home.
4. Think about which gender is more likely to be drawn to your products or services
Many companies offer goods and services that appeal most to one gender. For instance, a nail salon will find more success targeting women with their advertising than if they’re targeting men, even though some men do indulge in manicures and pedicures. Conversely, a barber shop that specializes in beard care has little need to target women.
5. Familiarize yourself with who can afford your services
For many businesses, there is often a clear income bracket that their services and products appeal to the most. As an example, a Rolls Royce dealership would naturally target those in a higher income bracket, while a dealership that only sells used cars may not find much success advertising to that same group.
6. Find out if your product or service appeals to people in a certain geographic area
Many businesses serve the areas in which they are located. If your business has a brick-and-mortar store in Seattle, Washington, it doesn’t make much sense to advertise that store’s hours or specials to people that aren’t anywhere near the location. What about if you ship goods? If you notice a particular region that has a much higher purchase rate than everywhere else, that’s a great opportunity to target that specific geographic area.
7. Consider the interests your potential customers share
Many products and services appeal to people with specific interests. For instance, a golf retail shop that sells the latest clubs, golf apparel, and other golf accessories is most likely to succeed in advertising to people who have shown an interest in golf specifically, rather than those that have shown an interest in sports in general.
Once you’ve taken the steps above and identified an audience that will respond positively to your brand, ask yourself :
- Do the criteria I’ve identified include enough people to sustain my business?
- Is my target audience reachable through digital marketing efforts?
- Am I excluding anyone that could likely become a customer?
Honing in on your target market can be a tedious task and an undertaking that some businesses just don’t have the time or resources to accomplish. However, the process can be significantly easier when you’re working with marketing firms that understand your industry. Thus, a hair salon and spa may find greater success working with a dedicated marketing agency for beauty. Likewise, a catering business could achieve more success working with a marketing firm that knows the culinary industry inside and out. Experienced professionals can help you identify your target audience with ease.
While the process may be challenging, spending the time identifying your target audience will pay off more than any broad marketing campaign will. You’ll save valuable time and spend less, and a higher percentage of ad impressions will convert into paying customers.
Madeleine is a writer that currently calls the great Pacific Northwest home. She covers topics related to business growth and sales strategies but also loves to write about her non-professional passions, which include mental health, technology, and travel. When she’s not writing, she enjoys spending time in the great outdoors with her Mini Aussie, loves a good puzzle, and lives for live music. You can find her on LinkedIn.