How to Determine Your Target Market For Your Business

October 7, 2020
Productivity
Lead Generation
How to Determine Your Target Market For Your Business

If you want to market your products and services it’s important to first determine your target market. You can just start marketing to everyone and expect to get drive results. It’s important to have a clear idea of who your target market is so your sales proposition can be more compelling. Once you have determined your target market, you can use the four p’s of marketing to decide how you want to approach your target market.

Why is Your Target Market Important?

Companies exist for a reason. They exist to provide a product or service in an exchange for dollars. In order for companies to do well they have to differentiate themselves from their competition and offer something unique.

But, you already knew that. 

Knowing who your target market is important because once you know your market you can actually start the process of advertising and marketing. A lot of companies simply throw darts at a board when it comes to attracting customers. This can often lead to thousands of dollars flushed down the drain for marketing because they didn’t properly identify their target market.

Some other reasons why identifying your target market before you start advertising and marketing is:

  • You can save money on advertising costs and marketing
  • Know the right demographics of customers to approach
  • Create better products and services
  • Allows for you to build a better relationship to your clients

It’s important to be as precise as possible when identifying your target market because the more precise you are, the more effective you can be with your advertising and marketing. This in turn will help drive more sales and customers to your business. 

Finding Your Target Market

In order to find your target market it’s important to first establish some important essentials and answer some questions such as:

  • Who is your current customer base?
  • Who are your local or national competitors?
  • How do your products/services compare to those of you competitors? 
  • Who is your current marketing strategy targeting?

Once you have carefully thought about these questions and have them written down you can one step further. 

Analyzing Your Customers Purchasing Behavior

It’s important to have a good idea of who you current customers are because they will serve as a baseline to further clarify your target market. If your business currently doesn’t have any customers, that’s okay. Continue reading on. 

It’s important to analyze what your customers buy from you and how much. This is important in order to establish where their interest and purchasing characteristics are. Once you know what kind of people purchase from you it allows you to shift your focus in order to find more of those customers.

Tracking Your Competition

If you are a local business in a small town like a restaurant or bar, chances are that you have at least a few different competitors nearby. Take a stroll through your local competitors and analyze their framework.

  • How are they pricing their products?
  • Are they running specials and discounts?
  • Do they offer volume pricing?
  • How late are they open?
  • What do they do differently?

These are important questions you should consider when analyzing your competitors because it can help you find something they are overlooking which you can potentially capitalize on. 

Analyze Your Own Products and Services

Once you have taken a look at your customers and competition, it’s a good idea to come back and check out all the products and services your business offers. Let’s assume you are running a photography business. 

You see notice that your business has been pretty stagnant lately and you decide to offer additional services to further compliment your business so you can drive more customers. You decide to offer video editing services in addition to your photography which can add more value to your customers.

Analyzing your own products and services allows you to reassess and make improvements where they are needed. 

As a result it’s recommended that you periodically analyze your products and services and see if they truly offer value to your customers. This can cause you to better define your target market.

Recommended Reading: How to Build a Sales Cadence that Converts Leads Efficiently

Creating Your Target Market

No business just randomly stumbles upon their target market. It takes some serious thinking and planning to define. You have to essentially sit down and create it. This requires you to define some key elements such as which demographic and personal consumer characteristics you should focus on targeting. 

Demographics of Your Target Market

Once you have a good idea of your current customers purchasing behaviors write all the important customer data out such as:

  • Age of your customers
  • Gender
  • Education Level
  • Income Level
  • Ethnicity
  • Family/Non
  • Rewards Member

Knowing these data points will help you get a better picture of your average customer. 

Pro tip: See here how to see your ICP visiting your website

Personal Consumer Characteristics 

This section requires you to really know your customer and pay special attention. This can include:

  • Purchasing Frequency
  • Reasons for buying or using your services
  • Personal Values
  • Personality traits
  • Attitudes
  • Lifestyle 

These aren’t always that obvious and require a bit more time in order to discover. But, humans are creatures of habit and with time you can gain serious insight into who they are as a consumer.

Analyze Your Decision

After you have done your due diligence and created your target market, it’s important to take a step back and look it over. Take the time to really analyze your target market and see if your business truly caters to it.

It’s also important to note that your target market will evolve over time as your business improves it’s products and services. So, don’t rush. Take your time and truly get to know your business and your customers.