A target market is defined as a particular group of people who are most likely to purchase the products and services that a business offers. A company is more likely to increase their conversions and their success when they position their products and services for their target market. In this article, we highly what a target market is and why it is important for business owners.
As a business owner, you might be under the impression that you are creating products or offering services that would meet the needs of all people. As such, you might identify your target market as everyone. However, while it would be wonderful if all consumers would be interested in what your company offers and actually purchase your products in services, in reality, thats rarely ever the case. The fact is that there are specific groups of people that are more likely to purchase what your company offers, and these groups of people are known as your target market.
Target Market Further Explained
Your target customers are those people or organizations that are the most likely to purchase what your company offers. A target market has specific characteristics, traits, and buying behaviors that the products and services you offer can speak to specifically.
These characteristics, traits, and buying behaviors can a variety of elements. Some common elements include:
Gender (male or female)
Age (teenagers, young adults, the elderly, etc)
Stage of life (recent college graduates, newly married, young families, divorcees, retirees, etc)
Socioeconomic status (actual income or income potential)
Geographic location (where they are located in relation to your business; a few miles away, within a certain zip code, etc)
Generation (Baby Boomers, Generation X, Generation Y, etc)
By knowing what your target market is, you can better pinpoint what their interests and needs may be, and in turn, determine if you are offering products or services that meet those interests or needs.
Why Knowing Your Target Market is Important
Its important to know your target market because it ensure that you are creating a marketing campaign that can reach them. This includes advertisements that will capture their interest, allow you to showcase what you offer and how what you offer meets the interests or needs of your audience, and where to place your messages so that they can be seen by your audience.
Many business owners develop marketing campaigns that are too general because they hope that in doing so, they will get bigger results. However, marketing to the general public can be equate to shooting 10 bullets in random directions and hoping that they will hit the target, rather than shooting just one and aiming for the target dead-on. In other words, marketing for the general public can end up being expensive and dangerous.
Heres an example of why marketing to the general public isnt in your best interest:
You own a company that offers vacation rentals that are in a particular price category and that are located in a specific area. You could put an ad in the paper that a million people could see; however, while a million people might see that ad, the majority of them might not be interested in your vacation rentals. Running this type of ad for the general public wont prove to offer much in regard to your return on investment, which means that you are spending money on a marketing tactic that wont yield the results you are looking for; you are wasting valuable marketing dollars.
Fulcrum-Tip: Now, if you were to market your vacation rentals on platforms where your target market the people who would be the most interested in the vacation rentals you offer there is a much greater chance that you will book your rentals. This, in turn, translates to a greater return on your investment and more success for your business, overall.
On top of that, understanding your target market allows you to establish brand awareness, boosts your credibility, and makes you more authoritative in a highly competitive market.
Tips for Defining Your Target Market
How can business owners determine who their target market is? Here are some tips that you can use that will help you define the market that your products and services appeal to the most.
Analyze your current customer base. Examine who your current customers are and determine why it is that they purchase from you. See if you can find any defining and shared characteristics and interests. Pinpoint which existing customers bring the most business and spend the most. Chances are that there are other people that you arent reaching that are very similar to your existing customer base that would be interested in or benefit from the products and services you offer.
Investigate the competition. Find out who your competitors are targeting. Who are their current customers and what type of traits or characteristics do they have? Instead of going after the same market as your competition, you may be able to discover that there is a niche market that they and you have been overlooking.
Assess your products and services. Create a list of the features of your products and services. Alongside each feature, write down the benefits that they provide. For instance, an SEO (search engine optimization) service offers proven SEO tactics that can help boost the presence of a website online. The benefit here is increasing web presence, which will ultimately increase the visibility of a brand, attract more customers, which translates to more success.
Fulcrum tip: When you have drafted your list of benefits, generate a list of the people who would have needs that your benefits would be able to fulfill. For example, an SEO company might opt to target businesses that are looking to increase their client base.
Highlight specific demographics. Not only do you want to figure out who would need your products or services, but you also want to figure out who would be the most inclined to purchase them. The following demographics are important to consider:
Gender
Age
Location
Income level
Education level
Marital status
Family status
Occupation
Ethnicity
Highlight psychographics, too. These are the more personal characteristics, such as:
Attitudes
Values
Personality type
Interests
Hobbies
Lifestyle
Behavior
You want to determine how your products and/or services will meet the needs of your audience and fit into their lifestyle.
Determining What Channel to Market On
In addition to highlighting your target market, you also want to pinpoint the channels that are the best for you to market on in order to actually reach them. There are so many marketing channels available, including direct mail, email marketing, social media marketing, etc.
What channel is your target market the most likely to interact with? By finding this out, you can determine which channels you should be advertising on in order for your target market to see your advertisements, interact with them, and ultimately convert.
Tips for Effective Advertising
Defining your target market is important, but once you do that, you have to make sure that you are delivering the most effective advertising materials possible. While you might have identified your market, if you arent generating ads that pique their interests, that they can relate to, and that really highlight what you offer and how you can benefit your market, you arent going to see results.
Make sure that your marketing materials are:
Engaging
Eye-catching
Useful
Informative
Well designed
Easy to read
Interactive
Incorporate multimedia (text with video and/or audio, for example)
Insightful
Conclusion
By defining your target market, you can create a marketing campaign that will reach the audience that is most likely to purchase what you offer, which will lead to a much greater return on investment for your advertising efforts.