Target Market Identification: Why Would I Need That?
Many businesses skip this process and go straight to a broad market:
Yesss!! That’s the best way to waste advertising dollars on the wrong audience! 🙂
Have you ever seen ads on Facebook or Instagram that were just completely irrelevant to you?
This is it! They are burning their $$$. Now.
Another blunder would be to misunderstand the motivation, lifestyle, and needs of people and start building the wrong product for them. Billions of dollars are spent on the products that never become sticky. Even the big guys make those mistakes.
Do you remember the Google Plus social network? Google Glass? Segway? 3D TVs?
Where are these products? Have you seen them or used them lately?
Avoid Disruptive Mindset
Millions of companies failed due to misunderstanding their customers.
A common mistake that a business owner would make is to build a product or business without researching who and why would pay to have their problems solved.
Understanding your ideal customer is essential, and here’s why:
- Many founders (and that’s a common bias for everyone) judge others by themselves.
“I love my product! Everyone will love it too!” - Many businesses find defining their target market difficult or dull:
“Nah. Let’s build first. I’ll figure that out later…” - Others are overly self-confident, believing they know what people need:
“Hey! I asked them and they already told me that!”
Self-confidence and stubbornness are valuable qualities – when backed up by thorough research.
Be honest. Just admit that:
- Your customers are not like you! All people are different.
- You don’t know them! But you can understand them better, with small steps.
- They are changing their habits. And so, you should change your strategy.
Target market identification is a crucial first step – Don’t skip it!
Continuously repeat this process again and again as you go and grow.
Once you define your target market, you can:
- Craft effective marketing messages for them. This will make them more likely to convert.
- Create a better product that addresses their needs. This will make them sticky and happy clients of yours.
Identifying Your Primary Market
Your target market consists of the people most likely to buy your products or services. Usually, businesses have a primary market from which most of their revenue comes. The primary market is the individuals who:
- Benefits the most from your offerings
- Have the greatest need for your solutions
- Ready to spend a lot of money on them
- Reside in a particular city or location
Knowing the type of consumers who make up your primary audience can help you effectively market to this group. Many companies lean into using specific automated tools or platforms to better understand their market.
Here’s how you can identify your primary target market.
Consider the Problem
Your products or services solve a problem; it’s why you created your business. When identifying your target market, the first thing you should consider is your customers’ problem.
Example: You sell pet products to help keep dogs’ teeth clean.
Then, your target audience consists of pet owners who have difficulty brushing their pet’s teeth.
Side note: By the way, not all problems deserve to be solved. Wow!!! Really?
Ok. Target market identification is not always that easy and does not stop here.
Define Audience Characteristics
If you’ve already started selling your products or services, you have a head start! Better later than never.
You already have some data on your target market.
First, list out the characteristics of your average customer. Try to find similarities between them.
You can find many different characteristics (also called segmentation criteria), including:
- Age group
- Lifestyle
- Income
- Location
- Hobbies
In your pet products example, the ideal market might be 35-44 years old, have a high income, live in a suburban area, and have purchased their own homes recently.
Once you’ve listed out these characteristics, you can start to see patterns emerge that help you in target market identification.
Study the Data About Your Customers
As we’ve mentioned, you may already have tons of data on your current customers. If you have a website, then your Google Analytics or Search Console will provide you with the information on who they are. If you have a database where you track your clients and their orders – you can collect some statistics from there. When you started the business you didn’t forget to set up proper data collection, right?
You can also put a survey on your website for its visitors (not yet customers) to learn how you can serve them better.
Collecting data-driven insights from the customers is called Quantitative Research in product management. Remember, the more data you have, the clearer the picture of your ideal customer becomes.
Customer Interviews: Talk to Them!
The next step would be simple and hard: Talk to your customers! Ask them what they need and how they found you. Who else did they consider, what was important for them, which questions they had, and which concerns they had to resolve?
Ask the most loyal ones: They will be happy to help!
And you will know the portrait of your primary customer.
Don’t rely on one opinion: Your takeaways will be too biased.
Ask many of them. Take their answers with a grain of salt. Repeat.
Interviewing the customers is called Qualitative Research in product management.
Combined, the Qualitative and the Quantitative Research results will provide you with the best insights!
Target Market Research Tools and Techniques
If you have the budget, consider doing professional market research to get in-depth insights about your potential target market. Many companies out there are happy to run professional market research for your money.
Market research can help you learn about your potential target market’s income and disposable income so you can accurately price your products and create deals specifically for them.
Look to Your Competitors
If you’re at the early stage of starting a business, look at your competitors. Everything from their advertisements to their website can give you a hint on who they target and who their current clients are.
For example, you may discover if your competitor targets a specific customer segment: such as homeowners, pet owners, or professionals.
Check their social media pages. Subscribe. Monitor for a few weeks or months.
If you find ads, you can draw your conclusions about who their target market is.
Check their comments. Notice how their audience comments on their posts.
Hopefully, your competition is also doing influencer marketing. Social media also provides you the opportunity to find the influencers that competitors are working with. Dig into the influencer’s followers to learn about the different types of people interested in buying your products.
Conclusion
Yes. Identifying your target market is time-consuming, but the payoff is immense!
Once you identify and truly understand your market, you can begin building your product or service for them and targeting them effectively. Once you set this as a disciplined and repetitive process you will be able to adjust your strategy to stay competitive.
