The Simple Guide to Identifying Your Target Market

The Simple Guide to Identifying Your Target Market

Since 2011, I had been providing services directly to consumers, and clients in the form of planning. The planning includes business planning, marketing, sales, and branding - to name a few. One of the primary goals for me is to help my clientele understand their target audience.

The Biggest Challenges Facing Entrepreneurs

Let's start with the first one glaring everyone entrepreneurs in the face.

1. Everyone is my Target Audience: Have you ever heard this? Even worse, have you ever said this, as an entrepreneur? When I meet with aspiring entrepreneurs that want to put pen to paper and start planning out their business, they, without fail, always say, "everyone is my target audience." That's usually my sign to back up, and send the on their way to with some homework to help them gain clarity on who resides within their target market, and how to refine said target audience.
2. I just need 1% of the market: Have you ever heard this, specifically in the context of how large the market is right now, and just 1% of that market equals 6-figures? I hear something like, "The health food industry is a $841B industry, I just need 1%." While this is factual, it is also ignoring some pretty large factors that come into play when identifying your target audience.
3. There is no competition: I'm sure you have also heard or said this yourself. There is no competition, as in this is a Blue Ocean of opportunity in your intended service area. Let's step back and ask the question, "why is there no competition?", "Why are there no businesses operating in this space?", "If there were businesses, why are they no longer in business?" You can also consider the fact that they do have competition, and they're simply not aware that there are competitors in their space.

If you're saying these three things to yourself or echoing them to your team, you're likely not hitting your target audience with the proper messaging, or the message is unclear. This typically results in you spinning your wheels wondering why things aren't working out for you.

Social Media Gooroos will tell you it's a mindset thing, and you need to spend $1997 on their course to get your mindset corrected. However, most times it is just a matter of getting back to the drawing board to identify your target market.

LET'S EXPLORE SOME TERMS REALLY QUICK

I really think it is valuable to explore some terms, and make sure we're all on the same page as it relates to developing a strategy towards the path of identifying your target market.

Target Market: group of people most likely to purchase a specific product or service

Ideal Client: someone who finds the perfect solution to their problems or needs in the services or products that your company provides

Total Available Market: the revenue opportunity available for a product or service

Serviceable Available Market: part of the total addressable market that can actually be reached

Serviceable Obtainable Market: part of the total addressable market that can actually be reached

WHAT IS A TARGET MARKET?

The Target Market is those who are most likely to buy. I think that's something that we tend to gloss over. There is a significant difference between those who are in your audience or market, and those who are most willing to buy. I like to place them into 4 specific categories. These categories can change, based on the buyer's journey. They can also change with new information presented to the individual/prospect. So, let's go over them super quick and move on to the next topic

If you look at the matrix, and see the scale. Prospects that have a 0 commitment level, and 0 knowledge level are those are those who have no idea who you are, and no idea what you do. If after you present information to them, and they remain at a (0,0) I classify them as timewasters. If the prospect knows what you do, but typically are competitors or just asking questions to take it to take the expertise and knowledge to a competitor are what I consider "Ask Holes."

As you move into more of the higher commitment levels, you'll start to have meaningful business conversations with those interested in solving problems. These particular stages also require much different messaging. The first 2 stages, are more general, and share information on advantages and benefits of doing business with you to address problems and challenges. The group that needs more information is a great group that would benefit from speaking to a sales professional and/or subject matter expert. The group that is ready to buy also benefits from speaking with a sales professional that can finalize the process, and get the purchaser what they need in a timely manner.

Reminder: These 4 groups are all part of the Total Available Market. As we get more defined as to who is going to make a purchase - we start to see who fits into our your Serviceable Available, and Serviceable Obtainable Market.

WHAT IS YOUR IDEAL CLIENT?

If you're looking at that matrix, your ideal client will sit on the right side of that matrix. They are very interested, they're learning more about how your product, service or solution is going to help them and fall into the two categories; (1) need more information, or (2) have enough information and ready to buy.

Your ideal client is someone that finds the perfect solution with your company's offering. That's as plain and simple as it gets.

WHAT IS YOUR TOTAL AVAILABLE MARKET?

Let's think about the folks that say, "The X-industry is worth $4.5B dollars and it's growing at X-percent." This would represent the total available market. The likelihood of you tapping into the total available market is pretty remarkable, you're on the level of Coca-Cola, Apple, Google, and other monstrous brand with global reach. If you're reading this, there is a chance you're not on that level, and are simply looking for information that can help you on a smaller micromarket or local level.

WHAT IS SERVICEABLE AVAILABLE MARKET?

Let's say you're in the landscaping space. You live on the east coast and service clients on the east coast. Someone needs landscaping services, but live on the west coast. They're serviceable, and available - but are not obtainable as a client. It just wouldn't make sense unless they specifically asked for you and would be happy to pay for your travel, time, and resources. Then, they would move into the obtainable category. Until then, they're simply an available portion of the market, and serviceable.

WHAT IS SERVICEABLE OBTAINABLE MARKET?

This is the group that is serviceable, available, and obtainable. This does not at all imply they'll buy from you. We still need to look at the Serviceable Obtainable, and determine if they're a tire kicker, ask-hole, or need more information and have enough information.

CONCLUSION

Marketing has been tossed around far too much and has simply become a buzzword for people to refer to when mentioning how to share a message - in general terms. We could share this message on our Facebook page. We could share this message in the local newspaper. We could share this message on Instagram. We could share this message via email. We could share this message (insert your own channels).

This is definitely not marketing, this would, at best, be classified as distribution. Marketing is the act and practice of communicating with your intended target market/audience. Now knowing what you know about Time Wasters, Ask-Holes, Need More Info, and Ready to Buy - you should have a clearer picture on who and where you should be utilizing your resources to communicate that message. Additionally, consider the Total Available Market, Serviceable Available Market, and the Serviceable Obtainable Market.

These all play a large factor in determining how effective your marketing will be when identifying and addressing your target market.

Enjoy!