Now that you understand exactly what target markets and target audiences are, let’s look at how you can uncover the market segments you should be targeting.
Step 1: Identify the Key Benefit that Your Business Provides
Get this right and your ideal target market should reveal itself.
Start with the end result you want to create: satisfying customers needs and desires.
“Authentic marketing is not the art of selling what you make but knowing what to make,” said marketer Philip Kotler. “It is the art of identifying and understanding customer needs and creating solutions that deliver satisfaction to the customers, profits to the producers and benefits for the stakeholders.”
You need to be able to answer these questions very clearly:
- What problem do you solve?
- What need do you meet?
- And what desire do you fulfill?
As economist and Harvard professor Theodore Levitt famously said, “People don’t want to buy a quarter-inch drill. They want to buy a quarter-inch hole.”
So don’t define what you do or how you do it, such as, “we sell home exercise equipment online.”
Instead, define what outcomes you provide for your customers, such as, “We help people to lose weight and get fit, which helps to improve their feelings of confidence and empowerment. Plus, we help them do it in the comfort of their own homes where they won’t feel self-conscious, using exercise equipment they can conveniently buy online.”
A great example of a company selling the benefits of a product instead of the features is the first iPod advertisement.
The main feature of the iPod was that it could store 1GB of MP3 files.
But Apple didn’t promote this feature. Instead, they highlighted the benefit that this feature provided: “1,000 songs in your pocket.”
In the Apple example, the target market is obviously early adopters of new technology, who have a large music collection, and who love listening to music on the move.
From here, Apple could dig deeper into their target market by testing the product with smaller groups of people who fit within these basic parameters.
Whose needs or desires are you fulfilling?
Are you helping middle-aged overweight men lose weight? Do you help older people maintain their gardens? Do you help young dads save time in the kitchen with cooking tools?
Step 2: Refine Your Target Market
By this point, you should have a basic understanding of who your product or service benefits. From here, you need to narrow down the market segment you plan to target.
Be as specific as possible.
First, define the demographics of your target market.
Demographics are simply a particular section of a population. You can segment your target market using demographics such as age, location, gender, marital or family status, occupation, income level, education level, etc.
Next, identify the psychographics of the people who stand to benefit the most from your product or service.
Psychographics are consumers’ psychological attributes, like attitudes, values, interests, lifestyle, behaviour, etc.
Once you’ve done this, you should have clearly defined a buyer persona.
To learn more about creating buyer personas, check out Shopify’s guide on “How To Build Buyer Personas For Better Marketing.”
Step 3: Stay Objective
This is perhaps the most difficult part of the process.
It can be extremely difficult to avoid assumptions. What’s more, many people unintentionally search for, recall, and interpret information in a way that confirms their pre-existing beliefs or hypotheses. This is called confirmation bias.
If you’re not careful, this bias can totally derail any attempt you make to clearly define your target market and target audience – which in turn, could spell disaster for your business.
And this happens all the time.
In fact, according to CB Insights, 42% of startups fail not due to a lack of funding, but due to a lack of market need.
In other words, they fail because the entrepreneurs behind them are so blindly passionate about their product or service, that they forget to validate whether or not there’s an actual need for it in the marketplace.
The other mistake businesses make is to conduct plenty of research, but no real testing.
Research is prospective. Testing is proof.
It doesn’t matter how many people tell you they would use your product or service. And it doesn’t even matter how many people say they would buy your product or service.
It only matters how many people actually buy your product or service.
So don’t ask people if they like your product or if they would buy it. Create an MVP (minimum viable product) and sell it to them there and then.
That’s the only way to know for sure if there’s a real market need.
Bottom line: Assume no target market cares about your business, brand, products, or services unless categorically proven otherwise.
Step 4: Evaluate Your Market Segments
Now that you have real insights into who you plan to sell to, you need to verify that this is a market worth serving.
Ask yourself these questions:
- Are there enough people in the target market to sustain our business?
- Does this market segment have the money to buy our product or service?
- Will they buy repeatedly, or will we have to constantly close new customers?
- Is there much competition for this market segment?
- If there isn’t, why is that?
- If there is, what separates us from the competition – why should customers buy from us?
- How accessible is this target market?
Once again, research can only take you so far. To conclusively answer these questions, you need to create real-life tests where you actually engage with your prospective target market.
Summary
Clearly defined target markets and target audiences are vital to the long-term success of any business.
The scattergun approach can only take you so far – and that’s if you manage to make it past the start line at all.
So, work to understand who your business serves, and why they should care. And remember that the only true way to know who you should target is by testing.
Once you’ve defined your target market, ensure that your products or services fulfil their needs or desires. Then define your target audience – the specific group that you plan to target your marketing message.
Remember, casting a wide net is a small business’ death sentence. So get specific.
What is the one key benefit that your business provides to consumers? Leave a comment below and let us know!
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This article is from: www.oberlo.com