As tempting as it is to declare that your product is all things to all people (or even, a lot of people), it significantly decreases your ability to market successfully. The most important step in the entire marketing process is the first – developing a detailed picture of type of person who has the exact problem your product solves. This makes EVERYTHING easier. It will inform how you design your product or service. It will tell you exactly how and when to market it. It will open your eyes to what social media platforms your market uses and precisely how they want their content delivered. The importance of this step cannot be overstated.
This is how to define your market properly and thoroughly. Get this right and you’ll be ahead of everyone who didn’t put the work into this crucial step.
1. Analyse your product/service
Write out a list of each feature of your product or service. Next to each feature, list the benefits it provides (and the benefits of those benefits). For example, a graphic designer offers high-quality design services. The benefit is a professional company image. A professional image will attract more customers because they see the company as professional and trustworthy. So ultimately, the benefit of high-quality design is gaining more customers and making more money.
Once you have your benefits listed, make a list of people who have a need that your benefit fulfills. For example, a graphic designer could choose to target businesses interested in increasing their client base. While this is still too general, you now have a base to start from.
2. Understand the problem that you solve
The starting point in defining the target market for your proposition is to understand the problems that you solve. Once you have a good idea what these are, you can start to work out who is most likely to suffer from these problems. Use your info from the above step to clearly define the problem.
3. Work out who will gain the most from solving this problem
- To whom will these problems be most troublesome?
- Who will have the most to lose by not dealing with these issues?
If you can demonstrate that the cost of NOT sorting out the problems is GREATER than the cost of dealing with them, then your case becomes compelling.
Remember to take into account aspects like emotional upheaval, stress and the risk to reputation when implementing your solution, as well as a bottom line cost. It is all these factors that make up the value in your offering.
4. Look at your current customer base.
If you have current customers, who are they and why do they buy from you? What are their characteristics and interests? Which ones bring in the most business? It is very likely that other people like them could also benefit from your product/service.
5. Check out your competition.
Who are your competitors targeting? Who are their current customers? Don’t go after the same market. You may find a niche market that they are overlooking.
6. Think about your market
Today we live in the world of niche. For example, we are no longer prisoners of television schedules. We can watch what we want at our convenience from almost anywhere in the world; meaning every person can enjoy a unique viewing experience.
The web is fantastic at delivering personalised products and services, cutting out many of the distribution challenges that previously existed.
It is these factors that mean it is a more effective strategy to be a big fish in a small pond rather than the other way round. It will be easier to build your reputation and gain referrals. You will also find you get more from your marketing endeavours.
Therefore, with the previous knowledge gained, start to segment your market. Do you want to work:
- with particular types of people – high net worth individuals, men, women, golfers, and so on?
- in certain geographical locations – Sydney, Victoria, and so on?
- around tight market sectors – teachers or accountants, and so on?
7. Look internally at your company
One way of deciding on the right markets to pursue is to think about your company and your business.
- Do you have particular areas of expertise? For example, do you have a lot of experience in particular markets, such as working in healthcare?
- Do you have unique knowledge of a specific geographical area?
- Are you better at getting on with certain types of people?
All these factors could help you establish a particularly attractive offering.
8. What else is available?
Once you have decided the answers to some of these questions you must look at the market to see what else is available. The question you must have an answer to is:
- Why am I uniquely placed to solve the problem?
It may be that for some marketplaces there is no answer. However, in certain sectors or geographical locations there may be a compelling response to that question.
If you are unable to answer the question, you either have the wrong target market or the wrong offering. In this case, more work will need to be done before you start targeting your potential customers.
9. Choose specific demographics to target
Figure out not only who has a need for your product or service, but also who is most likely to buy it. Think about the following factors:
- Income level
- Education level
- Marital or family status
- Ethnic background
10. Consider the psychographics of your target
Psychographics are the more personal characteristics of a person, including:
Determine how your product or service will fit into your target’s lifestyle. How and when will your target use the product? What features are most appealing to your target? What media does your target turn to for information? Does your target read the newspaper, search online, or attend particular events?
11. Evaluate your decision.
Once you’ve decided on a target market, be sure to consider these questions:
- Are there enough people who fit my criteria?
- Will my target really benefit from my product/service? Will they see a need for it?
- Do I understand what drives my target to make decisions?
- Can they afford my product/service?
- Can I reach them with my message? Are they easily accessible?
Don’t break down your target too far! Remember, you can have more than one niche market. Consider if your marketing message should be different for each niche. If you can reach both niches effectively with the same message, then maybe you have broken down your market too far. Also, if you find there are only 50 people that fit all of your criteria, maybe you should reevaluate your target. The trick is to find that perfect balance.
No business, particularly a small one, can be all things to all people. Defining your target market is the hard part. Once you know who you are targeting, it is much easier to figure out which media you can use to reach them and what marketing messages will resonate with them. Save money and get a better return on investment by defining your target audience properly. If you want to stay ahead, repeat this process regularly to keep up with a swiftly changing marketplace. Just think about how much easier it could make your life if you knew exactly who was willing to pay your ideal price for what you offer.