6 Crucial Steps For Identifying Your Small Business’ Target Market

June 30, 2017

General advertising will introduce your business’ product or service to the masses, and identifying as many of your target markets as possible will maximize your business’ overall reach and marketing ROI. Realistically, your small business should scrutinize how, when, and who you market to before opening its doors or launching a new product or service. The following 6 steps will guide you through the process of identifying one or more potential target markets:

 

No. 1: Find out what needs your product or service meets for consumers. The first question your business ought to ask itself is: Who is most likely to use my product(s)/service(s)? Think about elements such as marital status, geographical location, buying power, and age. A graduate fresh out of college starting their first job is in a completely different market pool than a mother of four children. Of course, both individuals need food and shelter. However, they most likely have very different budgets and spending habits. For example, half of Millennial women shop for clothes twice a month in comparison to only a third of older women. Similarly, Millennial men drop twice as much cash on clothing than non-Millennials. It is not only important to identify who your product or service caters to and how, but also know the facts on how these consumers spend their earned dollars.

 

No. 2: Create a funnel system. Instead of considering all consumer factors at once, it will be beneficial to picture your market selection process as a multi-staged funnel. If your product or service is gender-specific, then use gender as the very first channel to immediately taper your audience. Secondly, you might consider age range. For example, advertising crossword puzzle booklets to tech-savvy Millennials might prove to be unfruitful. The final chamber of your funnel could focus on income level. Is your product/service made for the family that drives a Kia or the family that drives a BMW? Using consecutive filters and lenses will lead your business to more specific target markets. You can even experiment with the order of your funnel to see if different combinations yield different results. The goal is to locate the intersection of groups that are “highly interested” and “able to purchase” your business’ goods.

 

No. 3: Highlight primary values and principles. Now it’s time for your business to ask a more difficult question: Who is most likely to be interested in the values my product or service offers? The easiest way to do this is to catalog the core values your product presents and connect them to the potential demographic groups that prioritize those same values. For example, a compact, foldable stroller might be more valued by parents who like to travel or lead active lifestyles. Similarly, a waterproof camera’s target market will most likely include outdoor types with an affinity for REI and Patagonia.

 

No. 4: Obtain survey data to confirm your target markets. Your will want to back up your business’ conclusions with objective data. One way you can pin down demographics is to create a survey and include it in your e-mail blasts or newsletters. The aim here is to match the positive responses from the survey to a particular demographic group. This will indicate the markets you should continue targeting as well as the brackets you should target in the future.

 

No. 5: Rely on existing data heavily. If your product or service is similar to other business’ on the market, you will need to do your research. As the business owner, questions you will want to ask yourself include: What demographic groups are purchasing these products/services? When do they buy them? Which specific products are the most popular within the entire brand? Online data can provide a macro view of demographic groups and customer profiles for those who are using products similar to your own. You can also develop a micro view of target consumers through research in the field. One way to do this is by visiting a place of business similar to your own (assuming it’s open to the public) and recording what you observe. Pay attention to what is being purchased and who is purchasing it (age, gender, class, ethnicity, etc.), then apply your findings to the target markets within your own advertising strategy.

 

No. 6: Don’t shy away from your own network for data. Part of your target research should involve family and friends. What sort of products and services do they use and would they purchase yours? With these groups of people, you have the freedom to be direct and inquire if your brand would meet their needs or if they know anybody who would use your business’ products. Worthwhile data can also be drawn from mentors, sponsors, and business peers. Don’t be afraid to ask your own network to examine or even try your product/service. Their insight could be innovative, carving out target markets you didn’t initially consider. Diverse perspectives like this have the opportunity to expand your list of target markets and maximize your ROI as a result. Keep in mind that identifying your target market and consumers is an ever-changing, continual game within your small business’ advertising strategy. Overall, it should be clear for all of your target consumers to link the connection between their needs and your brand.

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