How to define your target market
Whether your business is already established, a fledgling start up, or even just a bright idea, it is vitally important to understand who your customers are (or will be) and why they need your product or service.
If your business isn’t seen by the right customers then they are not going to buy into it, no matter how much of a great idea it is, or how well it is branded and packaged. Alice Broomhall – small business market research guru is here to share her top tips for defining your target market.
Knowing your target market is crucial
“I don’t have a target market, my business is relevant to everyone!” That’s fine, but the risk of aiming at too broad a market is that your business won’t stand out from the crowd. A target market is just that – a target – and other types of customers will always come to you if you are offering them something they need at the time.
Having a target market in mind will help you focus on where you want your business to go, and will ensure that you don’t waste time and money marketing your services to people that are less likely to be interested.
Get to know your target market
“But I don’t know who my target market is!” There are two things you need to do here:
1. Profile your existing customers
These people have chosen your company for a reason (if you are already in business). Either the product/service you offer meets a practical need that they have, or there is something about your business/branding /location etc that connects with them on a more emotional level.
Either way, you need to understand who your customers are so that you can find more people like them and grow your business.
2. Observe, observe, observe
Go out there and watch people in places/situations where they are likely to use a product/service like yours.
- Lurk in shops selling similar things. What sort of people are in there? What sort of people are actually buying rather than just looking?
- Search the internet. Who are your competitors aiming their websites at? Read reviews of your competitors – what can you glean about their customers’ lives/ demographics from this, and what complaints do they make that your business could learn from?
- Find events where people that might be interested in your business would go. Talk to as many people as you can or hand out paper questionnaires. Ask if they’d be interested in your business, and ask all the profiling questions you can. Watch and note down what these people are like so you can build up a portrait of your imaginary perfect customer.
Surveys are a great market research tool
A simple market research survey can give you a wealth of information that can be used to profile your customers and better target your product development and strategies to encourage more of your core customer types to come to your business.
Surveys can be carried out in many ways including via email using your own customer email lists, through social media, or using paper questionnaires if you have a physical ‘shop’ your customers come to.
Questions you should ask
Great questions to ask are: Age, gender, occupation, family situation, income, where they live, hobbies / interests, media consumption (favourite TV, websites, apps, magazines, newspapers etc.), other favourite relevant companies they use, how much they spend on relevant products / services, and other questions relevant to your particular business.
For example, a textile designer might ask how often customers change their sofa cushions to understand whether she should offer long lasting, more traditional cushion designs, or include a range of cheaper designs in seasonal prints.
Knowing your target market is essential for business growth
And it’s ok if your research doesn’t give you a conclusive answer as to who your target customer is. There may be more than one group of people that you need to target and you can plan you product development and marketing accordingly.
Or you may be able to define your own new target by looking at the profile of customers that spend the most money with you or use you most frequently – if you can market to more consumers like them, then you’re guaranteed business growth.
Alice Broomhall is a freelance market research consultant specialising in helping start-ups and small businesses understand their customers and develop their services. Before going solo she spent twelve years working for large, international market research agencies, covering everything from helping banks to develop new business banking services, to testing car insurance advertisements, to evaluating how parents choose toys for their children. She loves being out in the park with her two daughters and in her spare time likes to buy, and renovate, properties.