HOW A SMALL BUSINESS FINDS THE BEST TARGET MARKET
Identifying the smallest, most precisely-targeted market for the small business is one of the best resources a business can have.
In this age of giant, international companies like Amazon, Walmart and multi-national corporations, finding your niche market and your place within it is key to success.
The concept isn’t to exclude anyone from doing business with you. But rather, the goal is to precisely target those potential customers who are most likely to buy from you. That’s the best market on which to focus your ad dollars.
“FIRST INVENT THE KEY, THEN FIND THE LOCK”
When it comes to finding the best market for the problem or service you offer, famed marketing guru Seth Godin says the service comes first.
According to Godin, the “key” to successful marketing is to first develop a product or service that solves problems. Then, find the most finely-targeted group your unique solutions can help…the “locks.”
Make sure your key will fit the lock before you spend money on marketing to those that don’t fit your criteria.
LOOK INWARD GRASSHOPPER!
So the million dollar question is, “How do you find the smallest viable market?”
You need to answer the questions of who you are as a business and what benefits do you offer your customers. Essentially, how does your product or service change things for the better by solving customer problems?
Here’s a Market Identification Checklist that should help:
1. Look at Your Current Customer Base
Who are they? Why do they buy from you? Which types of customers bring in the most business? Look for the common characteristics and interests in your current customers to identify future ones.
2. Analyze Your Product or Service
Make a list of the features for your product or service. Make a list of the benefits each service provides. Next, make a list of the types of people who have the needs your benefits fulfill.
3. Demographics and Psychographics Rank
While both are important to understand the market, psychographics reveals more about the reasons why people buy.
Demographics is a way to identify the characteristics of your target market. It includes age, location, gender, income, education, marital status, occupation, etc.
Psychographics provides insights into more of the intangibles that motivate your prospective market to buy. It includes personality, attitudes, values, interests/hobbies, lifestyles and behavior.
Answer these questions: How does your product or service fit into their lifestyle? Which features are most appealing? How will they use your product or services? What media do they consume?
4. Where Are They in Their Customer Journey?
Once you’ve come to understand who your market is, it’s important to understand where they are in their decision-making process, or buyer’s journey.
Are they researching their buying choices, evaluating purchase options or ready to buy? Knowing where they are in the buying process will determine your approach once you are ready to go to market.
5. Evaluate the Information
Once you’ve identified your target market, make sure they’re truly a good fit.
Is the market large enough? Will they truly benefit from your product or service? Can they afford what you’re selling? How will you reach them? Do you understand how they make their buying decisions? When are they ready to buy? (Answered in the buyer’s journey analysis.)
HONE-IN ON YOUR TARGET, SAVE ON YOUR BUDGET
It’s a no-brainer that marketing that doesn’t reach your target is a waste of time and money. When you don’t have precise knowledge of your target market, you end up spending money to reach some who are your market and many who are not. It’s the wrong people and the wrong message. They have no intention to buy.
Gaining a deep understanding of the target market’s characteristics and buying motivations leads to money well spent and an effective campaign that produces results and solves problems.
Read my Middle Brain Marketing blog about marketing topics relevant to a variety of industries.