One of the biggest and costliest mistakes that I see a small business make time and time again is that they’re neck-deep into their business, and they still haven’t gotten a clear understanding of the definition of their perfect target market.
They continue to try to be everything to everyone.
If you’ve been around the block a few times like I have, you’ll know that that’s not realistic. And unfortunately, that typically ends in a business being very little to very few. It leads to underachieving, frustration, and, worst-case scenario, they go out of business!
So What Is A Target Market?
A target market is a group of people, identified by specific criteria, to whom a company plans to sell its products or service. In other words, it’s a group of people with similar characteristics who are most likely to buy what you’re selling.
For example, if you’re primary market is selling children’s toys, your target market might be parents with young children. If you’re selling retirement planning services, your target market might be adults aged 50+.
Your "Herd" —The Perfect Target Market
As one of my early-on marketing mentors, Dan Kennedy, said, it’s critical that you “find your herd.” Your “herd,” or your “who,” as I call it, is your ideal target market — your perfect suspects, prospects, and clients or customers.
You must understand that your “who” is more important than your “what.” In other words, it’s more important to be clear on who you’re serving (i.e., your specific customers) than what you’re serving them with. The “what” will most definitely change in one way, shape, or form over time as your perfect target market’s wants and needs change. You may create products or a service that suits a specific customer that you had not previously considered.
So how does one choose the ideal target market for their small business?
Here are my six criteria to consider when choosing your perfect target market.
1. They're Hungry!
The first factor you want to look for is that your target market is hungry.
By “hungry,” I mean that they’re looking for a solution to their problem. The consumers want what you have, and they want it bad!
You want to make sure that they’re actively seeking a solution to their problem. This is important because if your target audience is not looking for a solution, you have to spend more time, energy, and money to get in front of them and educate them on what you do and how you can help.
The best way to identify your target market is hungry is to see what searches they’re doing online. What kind of keywords are they typing into Google? What kind of questions are they asking on Quora or other forums?
You can also look at the competition. If there’s a lot of competition, that typically means more money to be made in that market.
2. They Have Money!
The second factor to look for is that your target market has money.
You want to make sure that they have the financial ability to invest in what it is that you’re offering. There’s no use in spending time, energy, and money getting in front of people who can’t afford what you have to offer.
Simply put, it doesn’t matter how hungry your target market is. If they can’t afford to buy what you’re selling, they are likely not a good target market for you — you can’t draw blood from a stone.
One way to determine if your target market has money is to see what products and services they’re already buying. Do a little research and see what kinds of things they spend their money on. You can also look at their lifestyle. Are they living paycheck to paycheck? Do they have a lot of debt? Or do they have disposable income? This can be valuable information you can use.
Additionally, consider the possibility of finding someone else who can afford you on their behalf. In other words, look for others who have the cash that would stand to benefit from your shared target market, having access to what you offer and market your idea to them.
3. They're Easily Reachable!
The third factor to look for is that your target market is easily reachable.
You want to make sure that they can actually reach you and that you have a way to reach them.
One way to determine if your target market has access to you is to see if you have a common connection. Do you know anyone in their network? Do they know anyone in your network? Is there a way for you to get in front of them?
You can also look at the channels that they use. What kind of media do they consume? What websites do they visit? What podcasts do they listen to? Where do they hang out online and offline?
The harder it is to get in front of your target market, the more expensive it gets — and for small businesses, that typically spells disaster.
Unfortunately or fortunately, small businesses don’t have that bottomless pocket full of cash to spend on marketing themselves — this forces them to be more innovative and creative marketers.
The bottom line here is you don’t want to make marketing any more complicated or more expensive than it has to be, so pick a target market that you can get to responsibly.
4. There Are Enough Of Them Around!
The fourth factor you want to look for is that there are enough people in your target market. You don’t want to choose a target market that’s too small because then you won’t be able to make enough sales to sustain your business.
Typically, when people think about this factor, they tend to go too big. They try to go after the masses instead of a more specific group of people — and in the process, they end up trying to be everything to everyone, which is a surefire recipe for disaster.
The best way to determine if there are enough people in your target market is to do your research and find out what kind of demand there is for what you want to offer.
What are people saying about it? Are they looking for it? Are they talking about it? And more importantly, are they buying it?
5. You Like Them!
The fifth factor you want to look for is that you like them.
This one is simple but important. If you don’t like your target market, chances are you won’t be very good at marketing to them.
You should enjoy the marketing process and feel proud of what you do. If not, it will show in your work, and that will likely reflect poorly on your products or services.
The key here is to find a target market that you can really get behind and believe in. Life is too short to spend your most precious commodity, your time, with people you don’t like. So why do it? Even if the money is good, the chances are that eventually, you’ll feel unfulfilled — so play with people you want to play with.
6. Your Core Values Align!
I saved this one for last because I believe it’s the most important. If your core values don’t align with those of your target market, you will have a hard time connecting with them on a deep level.
And if you can’t connect with them on a deep level, chances are they won’t be very loyal to you or your brand.
For example, let’s say one of your core values is environmental sustainability. However, your target market is composed mainly of people who couldn’t care less about the environment.
You may be able to sell them on the fact that your product is eco-friendly. But at the end of the day, they’re not going to be very loyal to you or your brand because it’s not something they care about.
On the other hand, if your target market shares your core values, you’ll have a much easier time connecting with them and building a loyal following. Think waking up in the morning with excitement in anticipation of serving those you deeply resonate with. Ones you genuinely want to see crush it.
Online Marketing Muscle is living proof of this. Over the past two decades, our best clients are the ones we’ve loved serving the most — and as it just so happens, they spent the most money with us — and were the ones where our values were best synced.
The bottom line is that you want to find a target market whose values align with your own. This way, you can build a strong connection with them that will last for years to come.
Your target market and their demographics realistically need to be in alignment with your own beliefs and morals, or you may have trouble reaching out to them - or keep them once others have entered the market.
10 Common Mistakes Small Businesses Make When Choosing A Target Market
When it comes to choosing a target market, both large and small businesses often make the same mistakes. Here are 10 of the most common:
1. Not doing enough research.
The first step in choosing a target market is to do your homework. How well do you know your potential customers? What are their needs and wants? What do they spend money on? The more you know, the better equipped you’ll be to choose the right target market for your business.
2. Relying on gut instinct.
Just because you think a particular group of people would be interested in your product or service doesn’t mean they are your ideal customer. So don’t make assumptions about who your target market is – let the data do the talking.
3. Choosing too broad of a target market.
It’s important to be specific when choosing a target market. Trying to appeal to everyone is a recipe for disaster. Not only will you end up diluted and unfocused, but you’ll also have a hard time standing out from the competition.
4. Choosing too narrow of a target market.
On the other hand, choosing too narrow of a target market can also be problematic. If your potential customer base is too small, you may have trouble sustaining your business.
5. Not considering growth potential.
When you identify your target market, an important consideration is growth potential. Avoid choosing a market that’s already saturated or one that isn’t likely to grow in the future.
6. Forgetting about your competition.
It’s important to be aware of your competition when choosing the right markets. If there are already many businesses targeting the same market, you’ll need to find a way to differentiate yourself.
7. Not considering your resources.
Make sure you have the resources in place to reach your target market. If you don’t, you may want to reconsider your choice.
8. Overlooking changing demographics.
Your target demographic is constantly changing, so staying up-to-date on the latest trends is essential. Don’t choose a market segment that’s in decline – you’ll only end up frustrated.
9. Not revisiting your target market regularly.
Your target market may change over time, so it’s important to revisit it regularly. Just because your typical customer was right for your business last year doesn’t mean they still are.
10. Not testing your target market before launch.
Before you launch your product or service, it’s important to test your target market to see if there’s actually a demand. There’s nothing worse than investing time and money into a venture that no one wants. You want to save time and save money, not waste it.
Dig deeper and take the time to identify the perfect target market. It is essential to the success of your company. By avoiding these common mistakes, you’ll be well on your way to finding new customers interested in what you have to offer and likely to buy from you.
Choosing A Perfect Target Market FAQs
Who is your target market?
This is a great question and one that we get all the time. Basically, your target market is the group of people you think are most likely to buy your product or use your service. This can be based on factors like age, marital status or family status, geographical location, gender, interests, or even income level. Really, any demographic characteristics that you think would make someone more likely to use your product can be used to define and identify your target market.
Why is it important to choose a target market?
Choosing target markets is crucial because it allows you to focus your marketing efforts on a specific group of potential customers. Thus enabling you to use your limited resources more effectively and reach your desired audience more efficiently.
What is the difference between a niche and a target market?
A niche is a smaller subset of a larger target market. For example, the target market for running shoes in the athletic shoe industry would include all people who purchase running shoes. However, the niche market for running shoes might be only women who purchase running shoes for long-distance running.
Is a target audience the same as a target market?
Although target audience and target market are often used interchangeably, they’re actually different.
A target market is a specific group of people that you think would be interested in your product or service.
On the other hand, a target audience is the group of people that you actually reach with your marketing efforts.
So, your target market may be people interested in health and fitness, for example, but your target audience might be people who follow you on social media or who have subscribed to your email list.
In other words, your target audience is a subset of your target market. When you’re planning your marketing strategy, keep this in mind — you may need to adjust your approach based on who you’re actually reaching.
What is demographic segmentation?
Demographic segmentation targets consumers based on characteristics such as age, gender, income, occupation, education level, and family size.
By understanding the demographics of your target market, you can narrow down who you should be marketing to and figure out what messaging will resonate with them. So next time someone asks you what a target market is, make sure to throw in a little demographic info to show how much you know!
What is psychographic segmentation?
Psychographic segmentation targets consumers based on psychological factors such as lifestyle, personality type, and values.
By understanding the psychographics of their target market, businesses can create more effective marketing messages or a promotional campaign. They can also develop products and services that better meet the needs of their current customers.
So if you’re wondering how to reach your specific target market better, consider using psychographics. It could be just the thing you need to take your target marketing to the next level!
What is geographic segmentation?
Geographic segmentation targets consumers based on geographic areas or locations, such as a specific country, region, city, or neighborhood.
Why target geographical locations? Because people who live near one another tend to have common characteristics as well as similar wants and needs.
For example, a company might target customers in the Midwest because they have found that this is a region with high demand for its product or service. Or, a company might target customers in countries with a high disposable income level because they believe this type of customer will be more likely to purchase their luxury goods.
By carefully taking the time to identify their target market, businesses can ensure that they reach the right people with their marketing message and their campaigns.
What is behavioral segmentation?
Behavioral segmentation targets consumers based on behavior patterns such as purchase history and buying habits.
For example, you might target customers who are health-conscious or who are looking for environmentally-friendly products. Behavioral segmentation can be a great way to target new customers who are likely to be interested in your product or service.
Final Thoughts: Choosing Your Perfect Target Market
Please don’t make your job any harder than it needs to be. I’ve witnessed too many well-intentioned small business owners waste countless dollars on poorly targeted marketing campaigns!
Clearly identify your target market right from the get-go. Then, take the time to find out everything you can about them. Get to know the demographic data and psychographic profiles. Be able to answer questions such as:
- What are their interests?
- Where do they hang out?
- What makes them tick?
Understanding the answers to these elementary yet profound questions can make or break your business.
Applying The 6 Factors For Choosing Your Perfect Target Market
Now that we’ve gone over the six factors that are important considerations when choosing your perfect target market, it’s time to put them into action!
If you’re not sure where to start, sit down and make a list of all the different markets you could potentially target.
Then, take a close look at each one and see how they stack up against the criteria we’ve just discussed.
You may find that more than one market meets all of the criteria. If that’s the case, you have some tough decisions to make!
Once you’ve narrowed down your options, it’s time to develop your marketing strategy.
But that’s a topic for another day…
In the meantime, if you need help finding your perfect target market or developing your marketing strategy, our team would be more than happy to speak directly with you! Request a complimentary Discovery Session, and let’s discuss what’s possible for your business.
Here’s to your success!
