How to Identify and Analyze Your Target Market in 2020

In a perfect world, every single human would love your product. But, as we all know – life isn’t perfect.

Although your products might appeal to a large group of people, it doesn’t make sense to market to everyone. If you did, it would be like playing darts while being blindfolded. Not very effective and, quite literally, a shot in the dark.

 What your brand needs is a target market: your guiding light that tells you who to go after with your marketing campaigns.

 By adding a target market into your strategy, you’ll be able to more effectively market to customers while pinpointing their exact needs and reducing ancillary spend. 

 Let’s dive into what a target market is and how you can craft one that’s unique to your business.

What is a Target Market?

You need to identify the people who really want or need what you’re offering.

 Targeting, or segmenting, these people means you’ll be able to build your store for the right audience, efficiently using your resources to impress and attract your potential customers.

 To begin, you’ll want to establish the need for your product or service, focusing on what problem it can solve.

 Then refine your target market by identifying who has bought your product or service already. 

 This includes target demographics, audience type, and any other attributes associated with your target customer. If your product or service is brand new, you may want to look to your competitors to gain additional insights.

 In all transparency, the toughest part of this process is to avoid making assumptions. This is vital to the quality of your customer targeting, because if your assumption is incorrect – it’s a direct hit to your conversion rates.

 For example, if you want to start a handmade pet biscuit business, you are probably an expert on your products’ many benefits.

 But don’t assume consumers know these things as well as you do. They may not even know such a product exists.

 As tempting as it is to fill in the blanks, you should engage with your potential customers and conduct as much research as possible.

 As your business grows, you should continue to evaluate and stay up to date with your target market.

 Your target market is absolutely dynamic. It’s always evolving and taking new shapes.

 For instance, down the road you may want to expand and sell internationally.

Or you might think you are catering specifically to men, when in actuality you are selling to wives and girlfriends who are shopping for their fellas.

 Knowing who you’re targeting, and continually refining it, will ensure you’re on the right track.

How to Identify and Analyze Your Target Market

By the end of this chapter, you’ll be prepared to answer these key questions:

• What are the features of your business, products or services?
• What are the benefits of these features?
• How do the benefits help the user?
• How does your target market shop?
• What is the typical age and gender of your target market? Do they usually have children? What is their average income and education?
• What are their common interests? These can include attitudes, values and lifestyle.
• Is your target market comfortable with online? What web and offline marketing methods engage them?

 Now – we’ll show you how to find the answers.

1.   Gather intel.

Clearly defining your target audience — whether it’s senior citizens, busy moms or even as specific as Millennials in a certain town — can help you answer questions and overcome obstacles as you kick start your online store.

Here are a few business questions you’ll want to address:

• Is the potential market for your product or service large enough?
• Do you need to alter your business idea to best appeal to this audience?
• Should you tailor your product or service in some way to maximize effectiveness?
• How can you target your marketing efforts to optimize reach with the most promising potential buyers?

2. Create customer profiles and market segments.

Consumers who find your product or service appealing often share similar characteristics, which will help you fine-tune your messaging throughout the customer journey.

 You can craft a customer profile to uncover those shared traits. This includes psychographic data about how the target customer behaves and additional basic information to help you identify your audience.

 Start with demographic criteria:

• Age
• Location
• Gender
• Income level
• Education level
• Marital or family status
• Occupation
• Ethnic background

Then add psychographic criteria to go a little deeper and paint a more complete picture of your audience:

• Interests
• Hobbies
• Values
• Attitudes
• Behaviors
• Lifestyle preferences

Every industry, business and product is different, so these lists are by no means the end-all-be-all — think of them as more of a starting point to evaluate market segment size and opportunity.

 Don’t be afraid to make adjustments and include criteria that will add interesting layers to your profiles — the better you know your customer, the better you can sell to them.

3. Be specific.

Creating a very specific customer segment is more of an art than a science.

As you get started, try to be as specific as possible. For some brands I’ve had the opportunity to work with, we even created profiles for our target audience, for example:

• Our target audience is Mark, a 24-year-old man with a full-time job who spends his free time going to live music shows with friends. He makes an average of $65,000 a year and spends more money on experiences vs. material goods. He is most active on Instagram and frequently engages with influencer-related content.

By starting with a detailed customer profile, you’ll be able to make educated decisions when it comes to building custom audiences and crafting compelling advertising and marketing campaigns.

 New entrepreneurs often worry that they’ll be too specific as they conduct their research, fearing that it will limit their reach.

 In reality, identifying a specific target audience helps ensure that you make decisions that are dictated by your customers, which sets you up for long-term success.

Drill down on who your audience truly is and study:

• Their attitudes,
• Beliefs, and
• Pain points.

Understanding their age and income is the first step, but drilling down to the core customer problem is what will help set your products — and brand — apart from the competition.

4. Tap existing resources.

If you do a quick search online, you’ll often find existing resources that can help you pull together information about your industry, the market segment, your competition and your ideal potential customer.

 The best part is, someone has already done the work.

In most instances, the information you gather won’t cost you a thing.

However, the downside is that the research you find may not be as focused or useful as you’d like.

 Below are a few resources that will add more colour to your research and help you get started:

• Quantcast provides free, accurate and dependable audience insights for over 100 million web and mobile destinations.
•  Alexa transforms raw data into meaningful insights that will help you find your competitive advantage.
• Google trends uncovers where your target customers are predominantly located.
• Ahrefs provides a tool to help you identify all the backlinks to any competitors, showing you which industries and third-party websites may be the most interested in what you have to offer. This is one of the best tools for finding SEO and online marketing opportunities.

 All of this information will help you develop a strong brand identity.

5. Look at your competition.

In the last chapter, we showed you how to complete a competitive analysis. Now take all of what you learned in your research and ask yourself these questions about your competitors:

• What’s their market positioning? What are customers actually purchasing from them?
• How about their pricing? What are their customers willing to pay? Would they pay more if you offered something extra?
• What are customers saying on social media? What social media channels are they interacting with the most? What other interests do they list on their personal social media pages? What do they do for a living? What are their hobbies? How are they describing their business and products?
• Are reviews screaming with opportunity? What weaknesses did you identify from their reviews that you may be able to address with your business?

 Depending on how well your competitor is doing, you may not want to go after a similar market segment. But, on the other hand, if their customers are extremely unsatisfied with current offerings, it may be a great opportunity to shake things up and compete head on.

 Someone with a strong business acumen will identify competitors’ weaknesses, discover overlooked areas of the market, and capitalize on new opportunities to drive online success – with the help of concentrated marketing efforts.

6. Conduct your own primary research.

You can learn a lot about your target audience through primary research, which involves gathering data directly from consumers.

Although primary research can be a little more expensive than other methods, it allows you to truly listen to the voice of your customer and get answers to specific questions regarding your business.

Here are some things you can try out:

• Distribute surveys: Send surveys to existing and potential customers via mail, email or a web-based service like Survey Monkey.
• Conduct interviews: Talk to consumers who might fit in your target market. For example, you could stand in a high-traffic area at a trade show and ask attendees to answer a few short questions.
• Assemble focus groups: Get feedback from a small group of consumers who fit your ideal customer profile via Q&A sessions and group discussions.

7. Look at your business in a fresh light.

Now that you have some serious insight into who you are selling to, it’s time to ask yourself a series of questions.

• Do you feel there are enough potential customers within your target audience to start a brand new business?
• Will your target market benefit from your product or service?
• Will this target market see a true need for it? Will they come back repeatedly to purchase?
• Do you understand what drives your target market to make buying decisions?
• Can your target market afford your product or service? If so, how frequently can they buy?
• Can you reach your market with your message? How easily accessible are they?

Going through these questions will help you understand if you are ready to sell online or if you need to pivot your marketing focus (and potentially your products) to appeal to a different audience.

At the end of the day, the goal is to perform targeted marketing efforts that put the right message in front of key segments, which is why you’ll want to keep data on your target audience up to date.

 Every six to 12 months, conduct additional primary research and refine your customer profile accordingly. This will help you refine your product strategy and brand voice.

 As the marketplace shifts and evolves, your target customer may change. Get ahead of the curve, and you’ll always be one step ahead of your competition.

 In the next chapter, we’ll explore how to source and manufacture products for your online business.