Who exactly is your product or service for?
For your business to be competitive, you might be tempted to aim big and appeal to as many potential consumers as possible. However, this will not lead to success. Trying to appeal to everybody often means that your products or services end up being generic and catch the eye of nobody.
The best thing you can do for your business is to target a specific, well-defined market. Defining a niche target market doesn't really reduce the number of potential customers, it just means that you can target the consumers most likely to buy your product or service.
A case study from Harvard Business School describes how life insurance business MetLife boosted its conversion rate by targeting consumers that they grouped based on demographic and psychographic factors.
Rethinking your target audience can have major impacts on your business' success. That's why we've put together this guide to how to identify the ideal target market for your business.
But first of all, let's talk about the definitions of target markets and audiences.
What's the difference between target markets and target audiences?
Your target market is defined as a group of people that your business wants to sell products or services to. This group of people will have characteristics in common such as their age group, gender, geographic location, hobbies, or income level. Due to these shared characteristics, your target market will be more inclined to purchase your product or service.
A target audience is very similar and the two terms are often used interchangeably. However, there is a small but significant difference between target markets and target audiences.
The definition of target audience is the group of people that your marketing strategy aims to reach.
Usually, your target market and your target audience are the same people, but in some situations they might be different.
For example, if your business sells a sugary breakfast cereal, young children are likely to be the target market. You'll make the product appealing to them by using bright colours and fun characters on the packaging, or promising a free toy with every box. However, it's unlikely that children have the final say in cereal purchase decision-making, which is why marketers also have to focus their marketing on convincing parents. This means that the advertising might also highlight the nutritional value of the cereal and its budget-friendliness.
Using this example, you may have a slightly different target audience for a specific marketing push in some instances. Let’s say you are holding a sale in only one region, your marketing materials should be aimed at only the target audience who are local to that location. (This way of segmenting your audience based on their location is called geographics.)
So, now we've cleared that up, how do you start to identify your target market? Here are 9 steps you need to follow.
1. Consider your existing customers
What do your existing customers have in common? What interests and characteristics do they have? There are likely other people like them who you can target. To break down the specifics of the existing consumers, you can identify their demographic and psychographic characteristics.
Demographic segmentation
Demographics are characteristics such as:
- Gender
- Age
- Occupation or job title
- Income level or socio-economic background
- Stage of life
- Marital or family status
- Education level
- Location
- Ethnic background
For demographic targeting, it can be useful to use analytics tools such as Google Analytics to identify the demographic information of the people who currently visit your website. This can also give you data about how long your audience stays on your site and which content they click on, which can be useful for your segmentation.
Psychographic segmentation
Psychographics are characteristics such as:
- Attitudes
- Personality
- Interests
- Values
- Hobbies
- Behaviour
- Lifestyles
- Subcultures
Psychographic segmentation is just as important as demographic segmentation and considering both makes it more likely that you'll be able to identify the characteristics that your target group have in common.
Remember the MetLife insurance case study we mentioned earlier? MetLife's strategy for segmenting their target audiences combined demographic and psychographic factors. In doing this, they created categories such as 'Concerned Mums' who were young to middle aged, mostly female, used social media, and tended to convert to paying customers faster than other demographics. By combining these types of segmentation, they were able to focus on targeting these people who were most likely to become customers.
How to find out more about your customers
There are a number of ways that you can analyse the demographics and psychographics of your existing customer base. For example, you can interview your customers or ask them to complete surveys or testimonials. You can also look at your business' engagement on social media to see what type of people engage with your content.
Maybe the niche you want to target hangs out in particular forums, social media platforms, or blogs. Looking for online content by and about them can help you learn more about your target group.
2. Define the benefits of your product or service
The next step is to think about the product or service that your business provides. What problems does it solve, and who is likely to appreciate these solutions?
To define this, write a list of its features and the benefits of these features.
Features: If your business sells bikes with low-density carbon fibre frames which absorb vibrations from the road, that's a feature of your product.
Benefits: the vibration absorption means that these bikes provide a smoother and more comfortable ride.
Many potential customers don’t tend to be very interested in the specific features of your product. However, they will be more interested in the benefits. If your advertising promises an extremely smooth ride, people are more likely to find the bike appealing than if they just hear the words 'carbon fibre'.
After you've listed the benefits, start thinking about which people in particular will appreciate those benefits. What problems will they solve for potential consumers?
A person who wants to cycle a short commute on the road to work once a week probably doesn't care that much about a super-smooth ride (and the higher price tag that comes with it). However, for a regular commuter wanting to make the most of their workplace cycle-to-work scheme, the difference will make a huge impact.
So, when you're considering your product or service, think about:
- How will the benefits of this solve a problem or pain point they have?
- How, when, or where will they use this product or service? In other words, how will it fit into their lives?
- Which benefits will most appeal to them?
3. Research your competitors
The next step is to draw up a list of the businesses that are in direct competition to yours and carry out a SWOT analysis. SWOT is a basic framework to define the strengths, weaknesses, opportunities and threats of your competition. Look at their online content, and how they're selling and marketing themselves. Most importantly, consider who they are targeting.
You don't want to go after the same segment of the market that your competitors are targeting. It’s much harder to have potential customers make the switch to your product or service over the one they’re already using. Instead, think about which people are being overlooked or misunderstood by your competitors. Perhaps one of your competitors has a well-established reputation among older demographics and millennials but isn't as popular with Gen Zers. This is an opportunity for you to cater to this demographic.
It's also a good idea to consider industry trends and gaps in the wider market because these might provide opportunities for your business. Ensure that your SWOT analysis and industry research is data-driven at every stage. Assuming where your competitors are failing is a huge oversight.
4. Create a target market statement and buyer personas
After you've done this research, work on defining who your target market is in a single sentence. This is known as your target market statement. Here are some examples:
- Northern men in their early 20s who are interested in workout gear.
- Scottish first-time parents who care about their baby's nutrition.
- Middle-aged tall women with high salaries in North London who want clothes that fit.
Even within your niche, there will be different types of people within this target market. You can use these categories to create buyer personas. These are hypothetical summaries of different 'characters' you want to market to and it's useful to create 3-5 of these. For example:
Northern men in their early 20s who are interested in workout gear.
- John, 22, from Rochdale, who has just returned home from graduating university and is looking for new workout gear to shed a few kilos that he gained during the final exam season.
- Jamal, 23, from Newcastle, a regular gym-goer who needs functional new workout gear to refresh his gym wardrobe.
- Mark, 24, from Bradford, an established athlete who has an interest in new designs of workout gear.
This is also useful for narrowing the audience you are targeting and figuring out how to target them. Is your activewear business aimed at men of all ages in Manchester? Do you need to change your marketing strategy for 20-30 year olds, and is it different to how you target your marketing at 30-50 year olds who could have different health priorities?
Creating these customer personas allows you to consider how to target customers with marketing messaging that is relevant and compelling for them.
5. Evaluate whether your target market is feasible
At this point, you'll have a pretty good idea of who you want to target. Unfortunately, the work isn't over yet. There are many reasons that this target market might not be a feasible audience for your product.
For example, your product might be perfect for your target market in every way except for cost. You may have created an amazing meal delivery box aimed at time-strapped single fathers, but if they can't afford to pay the subscription cost you haven't got a viable target market.
Or, it might not fit into your target market's lifestyle. For example, you may sell amazing upcycled furniture that appeals to eco-conscious, urban, 20-30 year old London women, but if this is an audience that tends to rent rather than own housing, they might not be in the market for furniture.
Another question to consider is whether the target audience is big enough to sustain your business. You may have created an amazing service for an extremely specific niche, but if that niche isn't big enough to keep you in business they're not the right audience. You'll need to retarget a larger niche.
6. Think about your strategy to reach these consumers
Paid marketing
There's no use spending all this time on picking the right people to be your target market if you can't reach them with your paid advertising. The demographic and psychographic characteristics of your audience will determine where and how you market to them.
What do they read and watch? Where do they live? Where do they hang out online?
For example, if your video game accessories business is targeted at extremely online Gen Zers, it's a waste of money for marketers to advertise in print magazines or create campaigns on social media like Facebook which fewer young people use. Instead, your marketing plan should involve creating social media content for TikTok or partnering with an influencer on Instagram where you're more likely to get engagement.
SEO (Search Engine Optimisation)
It's also important to consider how you will reach your audience through organic search. Essentially: what keywords are your potential customers typing into Google to find your business?
Using tools like Google Analytics or Google Search Console, you can learn more about the search queries your audience are making and which keywords your pages are ranking for on search engines.
This takes us back to features and benefits. Potential customers are likely to create searches based on their problems or the benefits they want to solve them, so you should make sure that your pages are ranking for these keywords.
Not confident in your SEO abilities? Are you unsure where to start when it comes to picking and implementing keywords?
At Viaduct Generation, we help businesses rank highly on search engines when their target audiences search for solutions to their problems.
Interested? We're happy to give your website a free review or answer any queries you may have when you contact us to learn more.
7. Test out the strategy
Of course, all this research is valuable, but you won't know for sure if you've picked the right target market and the right way to communicate with them unless you try it out. There are a couple of ways that you can do this.
A/B Testing
Using A/B testing can help with marketing to your audience. A/B testing is a simple method to determine which version of a product your target market prefers. For marketing purposes, present two advertisements of your product or service to a random selection of your target market demographic to see which version is better received. You can use this data to make sure your language, messaging, and imagery are appealing to the demographic you're trying to convince to pay for your product.
Creating a minimum viable product (MVP)
Not to be confused with the ‘most valued player’, an MVP in business terms is the most basic form of your product that could be presented to the customer. Using an MVP enables you to gather valuable feedback on the product or service from a large number of customers, which can help you tweak your marketing plan.
Survey customers
Another option is to simply ask your current customers. You can use a survey to gather opinions and data from them.
8. What about B2B target audiences?
It's easy to come up with personas for B2C (business-to-customer) companies, but what do you do when your intended audience is companies rather than customers? Defining a target audience for your B2B (business-to-business) products or services can seem challenging but it's actually very similar to a B2C audience.
You can still define your audience based on the characteristics of the businesses themselves. Consider things like:
- Location - where are they based and active?
- The size of the business.
- What industries are these businesses in?
- Performance of the business.
- Structure of the business.
- Budget - do they have the money to buy from you?
Just like selling to customers, you should target businesses whose needs can be solved by your products and services.
9. Keep researching and planning for the future
Once you've figured out the specific audiences to target and aim your marketing toward, you might think that your job is done. We hate to break it to you, but you will have to continue doing market research to make sure your products and marketing continue to resonate with your ideal customers.
There are many factors that can impact your audience's interest in your product. Changing trends might impact your customer base; time, technological developments, and changing needs may also influence who is interested in your products.
Therefore, it's useful to continue researching and testing. You could do A/B testing in your email campaigns to see what your current customers respond best to, for instance. Keeping up with trends and developments in your industry is also critical to maintain relevance with your audience.
Final thoughts
It can take a lot of work to identify your target audience and create customised strategies for marketing your products to each buyer persona niche.
The next step is to use SEO to make sure that when your target demographic makes their search queries, your website is one of the first to appear. There's no use putting all this effort into segmenting and marketing if your audience can't find your site when they look for it.
That's where Viaduct Generation can help. Having an agency on hand to upgrade your SEO can encourage your business’ growth through increased organic traffic to your website. Our dedicated team can ensure that your content and technical SEO are in the perfect position to gain rankings and bring customers to your site.
So, give us a shout if you want a free website review or to learn more about how we can increase your business' reach.
