In business school, the subject of defining target markets comes up repeatedly. Define the market with demographics and psychographics, don’t be too general, don’t narrow it down too much, do your research and slice that pie!!
Although identifying your target market is undoubtedly an important step in creating your overall marketing plan, I think a lot of small business owners get lost in the technical lingo and either try to market to everyone or fail to formulate a plan at all. As someone who’s not a fan of the “Ready, Aim, Fire” approach, I want to share my take on how small business owners can better understand their target customers.
1. Define the original purpose of your business. Yes, again. Many small business owners who are fighting for enough business to turn a profit lose sight of their original goals. Stop for a second and write down why you are in business. What product or service are you offering? Be specific and try to remember why you started your company in the first place. Did you want to help others? Was your goal to get rich? Did you desire to make a name for yourself? Whatever the reason, get back in touch with that logic. Make sure it still applies, and reaffirm your commitment to doing business the way you always intended. If you don’t take this first step to defining your overall business goal, then you can’t very well understand your target market.
2. Look at the the customer base you currently have. Who is using your service? What is the average person who buys your product like? Instead of trying to come up with an age, sex, income level, etc. for your target customer based on what you think your target customer looks like, take a hard look at what they actually look like. You may be surprised at what you find, but effective marketing is aimed at the people who want to buy your products, not at the ones you think should be buying them.
3. Connect the dots. Once you are 100% committed to your business goals and you have a good idea of who your most frequent customers are, all you have to do is put the pieces together. Find a creative way to show those target customers your business meets a need they currently have or will have in the near future. When I reach out to potential clients, I like to consider the lifestyle of my target customers and show them how my business fits in with and improves that lifestyle. You have to find the approach that works best for your business, and if you have a hard time with this step it may be a good idea to seek the advice of a business consultant.
I know the demographic/geographic/whatevergraphic approach to market definition serves its purpose, especially when applied by professionals and academic experts. But if you are the average small business owner, then you may not have the knowledge or the patience to wade through the jargon.
My advice: Understand that marketing to the appropriate customers is a worthy investment, and apply whatever method allows you to focus on and reach those customers.