When you hear “target market”, do you automatically tune out? Maybe you avoid corporate jargon, or you think you already know what you need to about the topic. Don’t stop reading. Give us a chance.
We’ve been focused on helping you make sure your business is profitable. Part of that involves effective pricing strategies. Another major component is knowing who you’re selling to. Who is your target market?
Why Knowing Your Target Market Matters
Some businesses operate successfully without ever really taking time to define their target market. But knowing your target market can exponentially increase your profits and your return on investment. This is especially true with regard to your marketing.
No matter what kind of marketing your business engages in, knowing your target market will significantly increase your effectiveness. Whether it’s direct mail marketing, online paid advertising, social media posts, or even your business cards, your target market will influence everything from the design to the wording you use.
You don’t want to invest a large sum of money into a new website, for example, only to have it sit dormant, not getting any visitors and generating zero sales. When your website is designed for a specific audience, you’ll speak directly to the people who really want or need what you’re selling. This makes your investment more profitable.
Knowing your target market can also increase the effectiveness of your sales team. Understanding who is really looking for what you’re selling (and why) will guide your salespeople in their interactions with their prospects.
What’s Your Business?
Before you can establish your target market, you must know what you’re selling. We’re not talking about products and services here. We’re talking about solutions and benefits.
When someone asks you, “What business are you in?” or “What’s your business?”, how do you answer?
John Kachmarski knows a thing or two about target markets. His business – Know Your Neighborhood – is all about understanding your target market to develop effective strategies for generating leads. He says,
“You can talk about the products and services you provide in the marketplace, but people lose interest after a while. They care about what solutions you bring. They want to know how you can make their lives easier.”
How Do You Make Life Better?
Knowing what business you’re in means knowing what problems you solve for your customers. “It’s not always easy to identify in a way that’s short and simple – like an ‘elevator pitch’,” Kachmarski says. But when you can positively define how you make the lives of your customers better, your target market becomes clear.
Here are a few examples to illustrate this concept:
- Molson is not just selling beer; it sells a good party.
- Michelin is not just selling tires; it sells safety.
- Haagen Dazs is not just selling ice cream; it sells sensuality.
- Apple is not just selling computers; it sells personal empowerment.
(from Terry O’Reilly’s book “This I Know”)
Examples closer to home:
- Know Your Neighborhood is not in the marketing business; it’s in the sustainable lead generation business.
- Lease 1 Financial is not in the financing business; it’s in the business of enabling you to achieve your business goals.
Let’s pretend you run an auto body repair shop. You really want to focus on fleet accounts. Instead of promoting the services you provide (like oil changes, etc.), you can market the ways your services benefit companies with fleets: You can help them keep their vehicles on the road so they have as little down time as possible and make more money.
How to Determine Your Target Market
Spending time determining your target market can be challenging for business owners. You’re often putting out fires – working in your business, not on your business. But it’s important to take a step back and get a clear picture of who you need to get in front of.
So the first step is to take the time.
Think about your favorite customer. Which clients do you really enjoy working with? Who truly appreciates your products or services and keep coming back to buy more?
Now talk to them. Find out why they choose your business. Where are they coming from? What pain points does your business alleviate for them?
You might even want to put together a customer survey. Google Forms is a free service that allows you to create a feedback form to easily send to your customers and collect responses all in one place.
What to Do When You’ve Defined Your Target Market
Now that you’ve defined your target market, how do you use that knowledge?
Knowing your target market gives you clear direction about who you need to spend time pursuing, which relationships to build, and how to go about it effectively.
Look around you and find industries that are aligned with your target market.
How can you get in touch with them?
What would be an effective way to get in front of them?
What would peak their interest?
How can you help them find your business and benefit from what you’re selling?
Knowing your target market helps you strategize. You:
- connect with the right people
- convey the information they actually need, and
- maximize your efforts and resources and hone your business for ultimate success.
Don’t waste precious time, money and resources targeting customers who are not going to help your business thrive. Increase your business profitability by defining your target market.
