Whether it be cars or candyfloss that you are trying to sell, every small business needs to develop a specific target market; a niche upon which to focus its efforts in order to deliver a product or service to an audience who wants it and is willing to pay for it. By identifying your target audience, you can avoid a recipe for a marketing disaster – trying to be all things to all men and marketing to the masses. The following guide takes you through the filtering process to define and refine your target audience to ensure the best possible return on your marketing investment.
Firstly, take time to understand the problem or need that would drive someone to pay for your product or service
It’s so important to take the time to work out who your target audience should be. If you are one of the lucky ones and have developed your product or service based upon a need that you have identified amongst a particular group of people, you can still follow this process to ensure that you have identified all of the possible subgroups that may come together to form your target audience. All small business owners should ask themselves the following question;-
Who are the group(s) of people who are most likely to be interested in our product or service and help spread the word about our business?
When considering the answer to this question, think about, and really understand, the problem or problems that your product or service solves. This may be a real problem or it may be someone’s need to fulfil a certain desire. Let’s consider for a moment those businesses selling cars and candyfloss. Depending on the type of car that they sell, they may be solving a real problem ie someone’s need to get from A to B or they may be solving the same type of problem as the business selling candyfloss, which is fulfilling their customer’s desire for a non-essential, luxury good.
Once you have a thorough understanding of the problem your product or service solves, you will find it much easier to define the group(s) of people who are most likely to need the solution you offer.
So who will your customers be?
Begin to paint a picture in your mind of the type of customer that may want your product or service. Start by listing the groups of people who suffer from the problems that your product or service solves or have the desire for something that your product or service fulfils.
Group these people by where they are located and by whether they are individuals or other businesses. If they are other businesses, consider the market sector that they are in ie are they manufacturers, retailers etc, and if they are individuals group them by gender, age, marital status and interests. Basically, define them in as many relevant ways as possible.
To whom will your product or service be most compelling?
Having developed your initial group of people for whom your product or service is in some way relevant, you now need to filter them in order to work out which of those groups would be most willing and able to solve their problem using the solution that your business provides. There will be plenty of examples of people who would like to use your business to solve their perceived problem or fulfil a desire or need, but for some reason or other do not have the wherewithal to do so. For example, using the car business again, there will be many 16 year olds faced with the problem of getting from home to school/college independently each day, they would love to have a car to solve that problem, but they neither have a driver’s license nor the financial wherewithal to buy a car at present, therefore they are one group of people who, although they have a desire for your product, actually make up the target market for a bus company or a cycle shop, not the target market for a company in the business of selling cars.
In the same way, a business selling prestige cars needs to understand where and how they can advertise to people who have the desire for such a car but also the ability to pay for one; most of us would like a sports car or equally expensive equivalent but do not have the financial wherewithal to actually purchase one. Marketing to the masses in this example may generate footfall within a car showroom or traffic to a website for prestige car sales, but the money spent on the marketing would be far from cost effective as most of the interest generated would be from people who love prestige cars but are merely in the market for window shopping.
With this in mind, the prestige car business would be wise to target high net worth individuals; business men/women, golfers etc. By thinking this scenario through, natural filtering has taken place and the target audience has been refined to establish the groups that have the buying power.
Now further refine your target audience by thinking about your company and the individuals within it to finally establish where you are going to apply your marketing efforts.
By looking at your company in terms of its particular expertise or geographic location, the target market can be further refined. Ask yourselves the following questions;-
- Where are we located? Can we offer our service nationally/internationally or would that cause a practicality issue, and therefore should we focus our marketing efforts within a particular radius?
- Do we have any specific expertise that we could offer as our USP (Unique Selling proposition) and therefore suggests our target market? An example of this might be a marketing agency where individuals have significant experience in marketing for accountants. They may have been employed in-house previously in the marketing department of a large accountancy practice or may have worked for an agency in the past and had accountants as clients. In this scenario the newly established marketing agency may decide to offer this expertise as their USP and make accountancy firms their target audience.
You should now have a group or groups of people/businesses who will form your target market and be the focus of your marketing efforts. If your USP (Unique Selling Proposition) hasn’t been the catalyst for your choice of target audience, then these are the people that your USP (Unique Selling Proposition) needs to be developed for. We’ll focus on the development of your USP in the next article but in the meantime give some thought to the following question;-
What do your target audience need from the marketplace in addition to the product or service that you offer? Are they looking to save time, to find expert advice or is it a supplier that they can trust that is at the top of their wish list?
If you have any questions or would like to discuss How to Define and Refine a Target Audience for your Small business, please contact Sam on 0800 954 2099 for a Free Consultation or complete our online form.