Small Business Guide to Target Markets Posted on February 16, 2022October 28, 2022 by Jessica Lunk When you initially set out on your journey to market your brand, product, or service, you may be tempted to jump right in. However, going after everyone who is willing to listen or could even be remotely interested in what your business has to offer isn’t something we’d recommend. While getting your brand out there is essential to driving business, going too broad can water down your message. The result can be a lot of wasted time and resources on leads that will never benefit from what you have to offer. Your marketing strategy should be one that is focused on your target audience and market. This ensures you use your time and budget wisely and see the most return possible. In this guide, we’ll discuss everything small businesses need to know about target markets so they can get keep their strategy focused and successful. What is a Target Market? A target market is the core customer base you plan to sell your product or services. It’s different from a target audience in that it covers a broad or whole group of people most likely to buy your product or service. A target market can be broken into smaller yet specific segments, which constitute the target audience. In other words, a target audience is a segment within your target market. For example, if you are an email marketing software provider, you could say your target market is the digital marketing industry. However, within this industry lies your target audience of email marketers or people who send email newsletters. How Does Knowing Your Target Market Improve Marketing Efforts? Think of a forest as the digital world, the hunter as the marketer, and the arrows as the marketing message. A skillful hunter doesn’t go hurling arrows through the forest, hoping to make a kill. Rather, they identify a specific target, say a deer, and go to areas in the forest where they’re most likely to find them. Once they’re in position, they zero in on the target and shoot the arrow. Marketing your products works the same way. To hit your sales targets, you have to identify your target market. Defining your target markets is the first step towards knowing your target audience. Knowing your target audience is critical for a personalized marketing approach, which is essential for conversions. 60% of customers who get personalized experiences are more likely to become repeat buyers. Simply put, defining your target markets helps nail personalization, which in turn drives increased revenue and profitability. How to Identify Your Target Market Identifying your target market shouldn’t be difficult. If you’re wondering where to start, follow these steps: 1. Analyze Your Product or Service Let’s say you work for a marketing agency. You can identify your target market with a bit of reverse engineering. List your core digital marketing service offerings. Let’s say they are: Social media management Content creation Design and branding SEO strategy Dive in deep into the parameters of your core offerings. By defining the problems that each of your offerings solve, you’ll be able to get a clearer idea of who can benefit from them. You may find that your product or service can be tailored to fit many segments. However, it pays to put your stake in the ground and commit to one ideal buyer. 2. Define Your Target Customers Although you could potentially serve anyone in any industry, marketing to every industry would make your message quite generic: “Results-driven marketing for any entity.” Instead, your agency decides to get specific. You decide to commit your focus to higher education, narrowing your target marketing and focusing on one ideal buyer – John, the CMO of a university. You get even more specific and focus on what your agency does best – digital marketing. Now your message becomes: “Driving enrollment and increasing student ROI by helping universities get found online.” It hits home for your target audience – John the CMO – positioning your agency as the go-to when it comes to optimizing .edu websites for search. Save money and time by narrowing down the focus of your target audience enough to make your message resonate with a smaller group. Although your market is smaller, you have a better chance of attracting the right buyer. It also doesn’t hurt to take a look at your existing customers. Pinpoint some of your best customers, and figure out what makes them stand out from the crowd. Some of the details to uncover include: Age Gender Marital status Location Education level Income Occupation Don’t stop at that; research further to reveal the personal characteristics, buying habits, and interests. Are they decision-makers in their respective organizations? What made them buy your products? What other products do they purchase? How often do they purchase? How do they consume information online? With the demographic and psychographic details, it should be easy to build a specific customer profile and identify the market segment they perfectly fit into. 3. Research Competitors Competitor analysis is another great way to identify your target market, and it works for both new and existing businesses. Look around your niche and identify brands offering comparable products or services. Who are these brands targeting? Who are the top customers for these brands? Answering these questions may help you identify their target markets. You can go for the same target market your competitors zero in if your product has an irresistible, unique selling proposition. However, if it’s a small market dominated by well-established brands, it might be wise to target a segment of the market. 4. Refine Your Marketing Plan Now that you’ve chosen your path, it’s time to follow it to the pot of gold at the end of the rainbow. You’ve committed to your ideal buyer; now, you need to reinforce that commitment to your business and the marketplace. Put your ideal buyer at the center of everything you do: Refine your marketing message to speak to your ideal buyer. Think about how your content strategy can tap into the pain points of your ideal buyer and help them to solve a problem. Address the needs of your audience in your product/service. Build for your ideal buyer – and no one else – to create raving fans and loyal customers of your business. Create a customer experience that best fits your ideal buyer. For instance, if your ideal buyer is in the older demographic, they may prefer phone support to live chat or social media. John, the CMO, has a tough time managing his university’s social media presence because so many participants (students, faculty, departments) are involved. So you create a free social media brand guide for higher education. The guide helps generate leads within your target market. On the product and service side, you decide to create a custom social listening tool that your clients can leverage to stay connected to everything faculty, staff, students, and alumni are saying about their university brand. And, when it comes to client service, you know that your ideal buyer has to consistently prove the ROI of marketing programs to university stakeholders. So as part of your ongoing support, you email your clients a report on their top benchmarks every week. Putting John the CMO at the center of everything you do narrows your target market but also allows your agency to be infinitely more successful at driving leads, winning new clients, and making sure they stick with your agency for a long time. Once you’ve committed to your ideal buyer, follow through by integrating them into your business from product development to marketing to customer success. You’ll be rewarded with better leads, more customers, and increased customer lifetime value. 5. Encourage Your Evangelizers Now that you’ve committed to your ideal buyer and have aligned your business to them, you’re going to find yourself with some raving fans. Leverage your most enthusiastic customers to attract even more customers who are just like them. Run a referral campaign to ask your supporters to send new business your way. Reward them with incentives like discounts, perks, and even cash money. Ask for reviews. If your business is on Yelp, if you have a Google listing, or if your industry has specific review sites, it can really pay off to have your customer’s voices heard there, sharing their positive experience. Give thanks where thanks are due. When you go above and beyond for your biggest fans, they are sure to go the extra mile for you – whether it’s providing a testimonial, participating in a case study, or being a reference. Validate Your Decision and Start Marketing Before you can start launching your marketing campaigns, it’s prudent to validate your decision. Find answers to these questions: Are there enough people in the market to support steady growth? Will people find the need to use your product or services? Will people afford the product or service? How easy is it to reach out to them? If the target market ticks the right boxes, go ahead and create targeted campaigns to generate demand for your product or service. Market segmentation can feel like a big undertaking and can seem like a big risk since you limit your audience. However, narrowing your target market can actually give you a better chance to reach more people with a specific message. Put your stake in the ground and commit to an ideal buyer, align your business to their needs, and mobilize your evangelizers to penetrate and conquer your niche.