Why is it important to spend time looking into who purchases your products and services & understand how many ‘like-minded’ groups you cater to & who your target markets are?
A target market is a specific market segment that your product or service addresses; you might have a couple target markets when you start to dig in to it. It’s your main customer base. Knowing their characteristics allows you to create targeted products that appeal to their unmet needs (or pain). Vital to this target market selection process is to define what you are creating.
Marketing is not only about promoting what you sell but understanding who you should sell to.
The success lies in choosing the right customer & servicing them through the channels that are appropriate to the customer opportunity that are financially sustainable.
Questions that you might want to set out to answer in understanding your target markets & then later on create relevant messages to market to each target:
1. Who are your customers & what are their greatest needs?
2. Where do our greatest opportunities lie based on long-term growth and profitability potential?
3. What is the most effective way to engage our customer base?
4. How do we grow the ‘right’ customer profitably?
5. Are there customers that you want to avoid? They take up to much time/resources or margin?
Defining a target market requires knowledge of your overall market or total universe of who you can sell your products and services to. Look at overall market trends that may not be obvious if you just look at the target market. For example, if you look at the total automobile market, it may be declining but the high fuel efficiency, eco-cars market may be growing, etc. What is your potential universe that you can sell to? Do a little digging here to understand your total universe.
When you start to define your target markets (again, there might be a few different ones that you service) you want to start to define what they look like; create a profile for each. Here are a few items you want to explore to help you define each market profile
Who are they?
1. You want to ‘name’ each market with a descriptive meaningful title
2. Define what they want from you
3. Define what their needs are (needs are very different from wants & will help you create value statements that support needs later on)
What do they look like?
1. Geographic: Do they come from a specific geographic Region - City or metro area, climate, density, etc.
2. Demographic/Sociocultural: what do you know about their gender, age, income, education, ethnicity, religion, etc. This has to do with the characteristics of the customers that may purchase your product or services. For example, male working class retirees.
3. Psychographic: what do you know about their lifestyle or personality. This deals with how the customer lives. For example, retirees who migrate to Florida for the winter or maybe jet setters who travel by boat.
What are they worth to your business?
1. How many are in this target market?
2. How much do they spend with you?
3. What piece of your revenue comes from this market?
4. What piece of your customer base is in this target market?
5. What is their average spend?
How do they use your products and services?
1. Behavioral: This relates to usage of your products & services (which do they use? Purchase?)
2. Frequency: how often – are the repeat purchases? More frequent then others?
3. Do they buy more each purchase then the ‘average’ customer? (more services or greater spend?)
Once you have looked at grouping all your customers into target markets and have defined ‘what they look like’ and what their needs & wants are you are ready to move onto looking at where you might find additional growth for your business.
Look at your most profitable target market: if you had to pick one to start which would bring you in the greatest bang for your marketing bucks?
Start looking at where you might find ‘like-minded’ or similar potential clients. Who else has this need? You want to go out & find other potential customers who have the same needs. Can you look within your ‘subscriber list’? Can you go onto social media & find similar groups? Can you just start promoting a very targeting message that resonates to this particular group of potential customers so they know you are marketing at them & that you can fulfill some of their immediate needs?
Here are a few strategies that can build your potential customer base.
1. Send them targeted offers / promotions / or content based upon their particular needs and wants.
2. Create several different emails & group the ‘target markets’ to each custom email. Only send the relevant message to the right audience
Use your Social Media Presence:
1. Create specific offers / promotions to bring in the clients that you can make more money from.
2. Provide advice and helpful targeted hints to shows that you care & that you understand what they want & need from you.
Remember Market with Intent: Prioritize the right customers based on growth, profitability & potential; creating value & relevance with the right message at the right time to improve your return on investment (ROI).
Do you need help in this area? Do you need someone who might be able to look at your customer data & create target markets for you? Legacy is here to help!