Four tips for identifying your target market
Learn how to create buyer personas and define your customer base.
Why should you identify your target market?
Some business owners overextend themselves, trying to appeal to all types of clients. Others lose sight of the needs of their core customers and forfeit them to the competition.
Avoid these problems by identifying your target market, or the people who are most likely to buy from you. For example, an interior design firm might focus its marketing on 35- to 55-year old homeowners with household incomes of more than $100,000 in greater Denver. Or, a startup that makes sales tracking software might focus on the purchasing managers of mid-sized freight and transportation companies in the Midwest.
Whatever the case, defining your target market will help you fine-tune your brand's message, make the most of your marketing dollars, and build long-term relationships with your customers. Here are four tips to help you target the right customers.
1. Play to your strengths.
Start by making a list of the offerings that set your business apart and the problems your products solve. Once you understand your strengths, work backward to identify the types of customers who will buy from you.
For example, if you run a bike shop that targets 18- to 30-year-old male bike riders who live within five miles of the shop, put up a well-branded booth at community events during cycling season. Your mechanics can staff the booth and provide free tune-ups for participants. Through your social media channels, you can invite riders to visit the booth for the free services or buy merchandise before, during, and after the event. While visiting the booth, the young male riders can learn about how your products and services can improve their performance in cycling events.
Think about the benefits your business offers, and you'll start to understand with which customers to connect.
2. Research the market.
Research the demographics and buying habits of your local market to help you target the right customers. Here are some research resources:
The American Fact Finder database is updated by the U.S. Census Bureau and provides population, housing, and economic information in a customizable interface.
Pew Research Center and Nielsen, the measurement and information company, compile demographic information on consumer buying habits, including social media, mobile, and other technology user information.
If your target market includes other businesses, the U.S. Census Bureau's Censtats databases provide information about companies sorted by location, size, and industry.
Using the knowledge gleaned from your research, you can target consumer or business-to-business segments most likely to buy from you. Customize the content on your website, and use special offers or highly targeted promotional campaigns to engage your newly identified audiences.
3. Identify your buyer personas.
Buyer personas define the types of customers your business targets and describe their demographics, buying habits, and motivations.
Send a survey to customers in your database. Even if only 10% of them respond to your questions, you can collect valuable insights. Drill even deeper by interviewing a handful of the respondents, who should be offered some type of incentive for spending 30 to 60 minutes with you. This will allow you to truly "put a face" on your customer. If you have a website, you can also study its analytics to determine where customers are coming from and what key words they used to find you.
Who are my customers?
Where are they from?
What are they buying?
If you run deli and convenience stores, for example, you might identify two buyer personas for two types of target customers: one for adult commuters who shop for convenience items on-the-go and another for teenagers who buy deli sandwiches after school. Your marketing for these customers should reflect their different backgrounds and buying habits. By identifying buyer personas, you can craft content and messaging that resonates with each demographic.
4. Keep up with your market as it changes.
Identifying your target market doesn't mean you should exclude other segments or ignore the evolution of your customer base as your business grows.
"It's a long-term effort to stay on top your customers' priorities, but if you put them first, you'll be way ahead of the competition," says Patrick Dodge, co-owner of New England Standard, an online marketing and design firm.
As neighborhoods transform, customer tastes change, and new trends emerge, be ready to adjust your target market and your advertising strategies to better reach your audience.