How to Define a Target Market: Step by Step Guide
If you have done any research recently on how to use content marketing effectively, you have likely come across the concept of buyer personas.
Developing detailed personas is the first step in successfully engaging prospects via your digital marketing. However, there’s a far more traditional marketing term, also pertaining to customers, which you must have clearly defined before you can start to develop your personas. Your target market.
First, A Couple of Definitions…
Research-based archetypal representations of who buyers are, what they are trying to accomplish, what goals drive their behavior, how they think, how they buy, and why they make buying decisions, where they buy as well as when buyers decide to buy. (Source: Tony Zambito).
The particular segment of a total population on which a seller focuses its expertise to satisfy that submarket in order to accomplish its profit objective (Source: American Marketing Association).
The Difference Between Buyer Personas and Target Markets
Personas and target markets should play complementary roles in managing customer relationships.
Defining your target market is useful because it is a first step in reducing the population of potential buyers to smaller groups of your most likely buyers. Only then can you drill down deeper to understand each segment and, in turn, how to target them with your communications.
Creating buyer personas meets that need, providing clarity that can equip you to better serve current customers and successfully attract new ones.
10 Steps to Identify Your Target Market:
1. Which company offering are you going to focus on?
Different products and services have a different target audience with different goals and, as a result, different buyer personas.
2. What problems does your offering solve?
The starting point in defining the target market for your solution is to understand all the problems that it solves:
- How does it make people’s lives easier? Better?
- What would motivate people to pay for it?
Make a list of these.
3. Who suffers from these problems?
Once you’ve determined which problems you solve, list all the different types of people and/or organisations that suffer from them.
4. How can these people be grouped?
With this list in hand you can start to group them. Define them in as many relevant ways as possible.
- Job roles
- Location (local, regional, national &/or urban, suburban, rural)
- Market sector
- Number of employees
- Use of certain technologies
5. Who will gain the most from the value in your offer?
Now you’ve started to build up a picture of ALL your potential customers, ask yourself:
- 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 you are on to a winner! Remember to take into account aspects like stress and the risk to reputation as well as cost. The value of your offering is influenced by many, many factors.
6. Who would you like to work with?
Rather than trying to be everything to everyone, resources are better spent dominating niche markets. This way it will be easier to build your reputation and gain referrals. So, with the knowledge you have gained so far, decide who you would like to market to.
Do you want to work with:
- Particular types of people?
- In certain geographical locations?
- Around certain market sectors?
7. Do you have any internal strengths?
One way of deciding on the right market is to think about your company and your business:
- Do you have particular areas of expertise? Perhaps some past experience in a particular market?
- Do you have unique knowledge of a specific geographical area?
- Are you better at getting along with certain types of people?
8. What else is available?
Once you have decided on the segment you’d like to target look at the market to see what else is available.
The question you should be able to answer is:
“Why am I uniquely placed to solve the problem for the segment that I’m targeting?”
You should have a compelling response to this, if not you either have the wrong target market or the wrong offering.
You may find that, at the end of this exersize, you have more than one target market for a particular product or service. To begin with, create personas for your best performing target customer groups.