What is “Target Market”?
The definition of a target market is the group of people that a company wants to sell its products or services to.
It is important to know your target market – more specifically, create a customer persona (or buyer persona), to use as a tool to understand your customers. Use it to develop messaging, positioning, and content to generate leads, convert them into clients, and ultimately systematically turn those into referrals. This is a key step to mapping out a winning marketing strategy.
A customer persona is, “a semi-fictional representation of your ideal customer based on market research and real data about your existing customers.” The effort you invest in turning your understanding of your best prospecting into powerful messaging is sure to turn into more sales and higher revenues.
Updated 12/31/2019, by Tiffany Youngren, Owner of OMH Agency
You honed your products and services, and you built your team. The doors open – so where are the customers? So often, business owners are passionate about the services or products that they offer — so much so that they want to try to sell it to everyone instead of identifying a target market customer persona.
When you stand up and introduce your business and someone asks, “Who is your ideal client?” – what is your answer? If you reply, “Any adult in my area, we really serve everyone who is willing to …. (fill in the blank),” a huge red flag goes up.
The truth is, if I walk in and ask you, “Who is your target market?” and you don’t know or don’t have a good answer, then that is the number one thing we’ll discuss before anything else.
“In marketing if you have no target it’s not like the motivational speech of ‘Shoot for the moon if you miss, you’ll land among the stars.’ It just doesn’t work that way in business. You’ll be shooting into the black expanses of space–where no one exists.” ~ Michael H Kaleikini, Entrepreneur Magazine
Customer Persona and Your Business Plan
Your target market fits right into your business plan.
What? You don’t have, or don’t want to write a business plan?
I have had to talk my fair share of small business owners into writing a business plan. A written plan is like magic; as soon as you do it, you set your course and are able to see the progress.
If you know your course and it’s all in your head, that does no good unless your business can succeed without one other person (including customers). Goldman Sachs wrote in Huffington Post: “Running a small business without a plan is a lot like driving without directions. It’s difficult to see the road ahead and even harder to know where to turn next.”
A written business plan is important, but if you do nothing else, identify your target market. Who is exactly the person you are looking for as the “perfect client?” Thinking of 2 or 3 people in particular who are currently your clients can give you focus to target your marketing in such a way that it will resonate with them.
Many will tell you that the first step in identifying your target market is to consult your business plan. However, I have never written a business plan without first identifying the company’s target audience.
It is a great idea to revisit this process periodically to make sure that you still agree that your target market remains the same, and also to verify that your efforts do, in fact, speak to that market.A written business plan is important, but if you do nothing else, identify your target market. Who is exactly the person you are looking for as the perfect client? Click To Tweet
7 Simple Steps to Define Your Target Market
The only thing worse than having one more, big assignment before opening your doors, is having a complicated, drawn out, or expensive step. Here is the great news: identifying your target market is easy, straight forward, and free.
1. Document This Process
As you take the steps to determine your target market, documenting your findings will help you through the process. It will also serve as an excellent supporting document when you go back to review your target market in the future. Considering changing your target market down the road should be done with great care, and reviewing your previous thoughts saves time and frustration.
Whether you use a word processing program like Word, Googledocs, Evernote, or even notepad, doesn’t matter. What is important is that you save your notes and refer back to them periodically.
> Click here to download our free spreadsheet to help you document the process.
2. Write a Description Of Your Product or Service
Take a minute to briefly describe that amazing service or product.
- Write a detailed description.
- List your specific services.
3. Define At Least 4 Aspects That Set Your Products and/or Services Apart
Unless you are starting a new category of product or business, your services outlined in Step 2 above is something that any business in your industry could do.
Now is the time to dig deep into what exactly sets you apart. Tip: Even if you have a product, you could offer services that set you apart.
If you are a daycare, you might offer early drop-off, services for infants, or other things your competitors don’t. A real estate agent might offer free price opinions or a guaranteed call-back within 24 hours or the client gets a free coffee card.
Write down all special things that define your Unique Value Proposition; come up with four at the very least. If this becomes an easy task and your list extends beyond four things, list them in order of priority.
4. Determine the Demographics of the Person Who Would Benefit Most
There is a group of people who will enjoy those benefits that you offer. Who are they?
Don’t get sucked into the “well, anyone would benefit” trap. That may be true, but it is your job right now to find the ideal target market.
Consider these demographic identifiers:
- Income level
- Education level
- Marital or family status
- Ethnic background
Also take into account psycho graphics:
Write down the characteristics above and use them as a worksheet. Take notes as to what type of people fit your target market.
Using an example from above, let’s think about who would benefit most from office supply delivery. Business owners, specifically business owners who work in an office, right? It is true that a small coffee shop owner would appreciate delivery and could end up a customer, they wouldn’t be your target market.
Next you would want to figure out what demographic profile fits a business owner? Right off hand, I found a report from the Small Business Administration (SBA) that identifies demographic characteristics of a small business owner. It says that 15.6% of owners are under 35, 32.7% are 35-40, and 51.7 are over 40. If you were to go strictly from this report, the demographics of most small business owners are that they are 35-88 years old, non-minority, are US Citizens who are homeowners and live in a metro area.
A big thing to keep in mind is that it is best to define your target market based on your specialties, services/products, and even your own interests (usually a well-designed small business will be suited to your interests).
5. Create Your Marketing Personas
Think of 2 People In Your Life You Picture Being Your “Perfect” Customer
This is my favorite part. You have done good work defining your services, benefits to customers, and target demographics.
Now, think of someone that is a “perfect client.” If you have been in business for any length of time, this is easy – think of your top two clients who are also people you love to work with and wish all of your customers are just like.
If your business is new, just think of two people that you think would enjoy the benefits of your business the most. Then describe each one of them using the demographics outlines above.
Write a Description of the People Who Fit Your Target Market
After that, take everything that you have done and write out your target market. Your demographics list and two “perfect clients” should have more than enough content. Now describe your target market in 4-7 sentences.
6. Identify the Unique BENEFITS Your Customers Can Enjoy
The best approach to this step is to go through your list of things that set you apart and your list of services. Tabulate the list of set-aparts (those things that set you apart), features, and services. Then make a list of benefits.
Communicating the benefits of what you do and how it will improve your ideal client’s life is what will get their attention and bring you more sales.
Here is an example using a fictional real estate agent identifying the benefits of her listing packages:
I have great listing packages (set apart) to sell houses (services)
- first, so that sellers are more informed of the process (direct benefit) to give them more piece of mind knowing things are handled (ultimate benefit)
- second, so that the listing marketing is consistent (direct benefit) and sellers can move on sooner with more money in their pocket (ultimate benefit)
- third, so that everything is laid out and nothing falls through the cracks (direct benefit) to make the process smooth and more profitable
This is such an important step, but one that many entrepreneurs misunderstand, and that is understanding the difference between a “feature” and a “benefit” to your client or customer.
If you sell office supplies and offer delivery as something that sets your business apart – that is a service, not a benefit. The benefit to the customer is that your delivery service saves busy small business owners from having to pay someone to drive to the store to buy a pen.
Another example would be a real estate agent who offers a free price opinion. Again, that is a service. The benefit to the customer (well, at first, prospect) would be that he can discover how much he’ll pocket after his house sells, even how much he can buy his next house for, whether he sells it himself or hires an agent.
Write down three to four benefits you offer your clients.
7. Identify the Pains and Dreams for Each Market Segment
Your business likely pitches to multiple market segments.
A pet supplies store might sell to retailers and directly to customers. Each of those large segments could be broken down even further. Customers could be retired baby boomers who spoil their pets. They could also be young families with little kids whose pets are part of their lively family.
Each segment has very different pain points that send them to a pet store to get them to their “dream.” As you create content for baby boomers, headlines could be fashioned to answer questions and pique interest around connecting with other pet owners, how to travel with pets, and ways to train dogs with quiet lives to be ready to be sweet to the grand kids.
Headlines for young families could offer ways to incorporate kids into training your pet, which foods your toddler feeds your dog are poisonous, and solutions for keeping your pet entertained while at work.
Create Your Before and After Grid
Identifying the “Pain and Dreams” is best done with what we call the Before and After Grid. We go through this process at length with our clients, but I’ll give you some quick tips on how you can do it yourself.
Write the title of your segment at the top of your paper and a name that personifies the segment. By focusing on a specific person, I promise that you’ll get a better outcome. If you feel like you need help with this, feel free to see if it makes sense to set up a Free Marketing Consultation with our team.
Create a column on the left and list the pains this segment experiences when they come to you. What problems are you solving? Using our pet store example above, the “family” direct to consumer segment pains might be that they travel and feel guilty when they leave their dog at home. They are afraid their dog is going to die from food their toddler drops from his high chair. Their dog is tough to train with kids in the house and taking him for a walk is painful, since the dog seems to be the boss.
In the right column, list the “dreams” your Customer Persona has come to you to produce for them. Referring again to our pet store example, the family consumer segment likely dreams of having a well behaved, healthy, well adjusted dog. They see their kids playing and growing up with their beloved family member. As the dog is equipped and the kids mature, they have everything they need to move into that dream. Your business is just the place to deliver what is needed to make that happen.
Can you see how this works?
Create one Before and After Grid for each segment.
This process works for absolutely every industry.
It’s become one of my favorite steps in our Breakthrough BluePrint because it combines the science of demographics the art of crafting the stories behind why people do what they do. Our clients have enjoyed it as well – believe it or not, analytical and feelings-driven business owners all like and appreciate it! Even the biggest skeptics became fans who found themselves using the wording that came out of the sessions.
Common Myths of Creating Customer Personas from a Target Market
Resist the urge to let any of these common myths hold you back from the kind of growth you’ll surely see by starting your marketing and sales strategy with a well developed Customer Persona.
Fiction: If I pick a target audience, I don’t want to alienate everyone else.
Fact: By speaking confidently to a hypothetical person, it actually attracts the other groups.
An article written for a retired couple about how to travel with pets would also attract many adventurous pet owners – even if they’re single, young, old, or have 10 kids. You will not alienate anyone by writing great content.
Fiction: I’m uncomfortable creating a buyer persona. Not everyone is exactly like that person.
Fact: When you give a name and description to a specific avatar, you can speak right to that person. Anyone reading it is more attracted to content that clearly speaks to a human person.
Your audience will have more confidence in you with strong, clear messaging. Additionally, crafting it as if you are speaking to a person is much more effective. For instance, if your Customer Persona is built as a 35 year old woman and you create an ad that targets that person, who will feel alienated? I’m thinking of a 35 year old woman and come up with the headline, “[Checklist] Leftovers that Could Send Your Dog to the ER.” This speaks to a very wide range of readers, but it was crafted with our Customer Persona in mind. Does that make sense?
Fiction: Data doesn’t lie. I need a way to identify my target market that is more data driven.
Fact: Data is a big part of a deep dive into developing a Customer Persona. Your Target Market has to do with your vision.
When you started your business, you knew the group of people who would benefit most from what you have to offer. If you skipped that step, I recommend you go to your local Small Business Resource Center and ask for help in working that out. They have excellent resources to build that data with you.
As your business grows, you have clients whom were dreams to work with …. and the not so dreamy ones. In other words, your experience starts this process and data takes it deeper. The data often validates what you already know, while offering nuggets of valuable insight.
How to Use Your Target Market Findings
In conclusion, what you just did is going to get you so much further than many of your competitors who don’t plan at all! “If you fail to plan, you plan to fail.” So true.
You will use this target market description in your marketing decisions: buying pay-per-click (PPC) ads, determining where to market (because it will be where your target market is), and as you write your blog posts. Everything will be written, placed, and advertised towards those people you identified.
In fact, if you are writing a blog post, be sure to ask yourself if your “perfect clients” would read it. Always write, advertise, and place marketing according to the interests and needs of your target market.