As a business owner growing and cultivating a customer base is just as important to the success of your business as offering the highest quality products and services. Unlike large companies, a small business owner doesn’t have the luxury of a large marketing budget and cannot afford to cast large nets into open waters. Instead they need to take a more calculated approach, one that allows them to cast their nets into the right ponds, one that allows them to gain the most from their marketing efforts.
The first step to any well organized and executed marketing strategy should always begin by identifying the target market. Far too often, businesses become overwhelmed and struggle to define their target audience which can lead to overestimating the size of the market or even imagining a market that does not exist. There are three questions that ever small business owner should consider on their path to identifying the best target market for their company.
What are you selling?—as obvious as it may seem, fully understanding the products or services you offer is crucial in defining your consumer base. Ensure your business model is well planned out and that it can be executed in the manner your consumer expects and requires.
What makes your products or services unique?—what sets you apart from others who offer the same or similar products or services? What do you provide that they don’t? If you want to convince someone to use your products or services over other comparable companies, then you need to know what makes you different or better. Even if no other company in your area is offering what you do, you still need to understand what makes your company special and beneficial to your potential customers.
Who do you want to sell to and why should they want to buy your products or services?— identifying your desired target market and understanding why they would want to or could benefit from your company can help guide the process of defining your potential consumers.
Examining your business plan, determining what sets you apart from other companies, and knowing who you want to reach with your products or services are the first steps to identifying your target market but a few more are needed to ensure you reach the right market for your company. The following four steps will help you effective identify your target market to maximize your company’s profits and success.
Create a Customer Profile—people who are most likely to buy or can benefit from the products or services you offer share certain characteristics. Creating a customer profile will help to identify potential customers for your business which is essentially a detailed description of your target demographic that includes the following criteria:
Age—Are your potential customer’s teens or young adults? Or are they middle-aged or senior citizens? Knowing this is important because customers in different age groups will respond differently to how your products or services are designed and marketed.
Gender—Generally speaking, men and women’s needs and goals are often different. Promoting your business in a way that fails to address these differences could result in alienating people of both genders.
Income level—how much disposable income do your customers have? Knowing this can and should influence your marketing plan. Low-income families may be more drawn to products or services that provide them with money saving opportunities. Whereas, customers who have higher incomes may be more drawn to items or services that provide luxury and exclusivity.
Location—Examine the environment where your products or services are offered can greatly influence the types of consumers who support your business. The buying habits and needs of urban residents are often different from those who live in more rural areas.
A few other characteristics that you may want to include in your customer profile are: marital status, career path, family status, hobbies and interests.
Market Research—do your research! Conducting market research can greatly help you in learning about your target market. Primary marketing research allows you to learn about customers through direct contact by distributing surveys to current or future customers via paper, email, or web applications such as SurveyMonkey. You can also conduct interviews and focus groups which allow you as a business owner to personal speak to your customers and gain valuable insight into their buying habits.
Study your Competition— who is your competition? How long have they been in business? Are they well known in the community for having a good reputation? Who are their customers and how are they reaching them? Knowing your competition can help you do better. You can learn from their mistakes or grow from their success. Reap the benefits of the work they have already done in determining the target audience for the similar products and services you both may offer.
Monitor and Evolve—the world is ever changing, growing and evolving, so the success of your business depends on your ability to do the same. Periodically perform market research to see if you are still on track with your target demographic. Keep current on the new technologies and applications to ensure you are reaching new customers and maintaining your current ones.
A well planned and executed marketing strategy is crucial to the success to any business but for a small business owner getting it right can mean the difference between success and failure. Ensure the success of your business and develop a marketing plan that starts with identifying your target market today.