Brand & Marketing Strategy

How to Identify a Target Market for Your Small Business

how to identify a target market for your small business

There are many success stories showing clearly how important it is for small businesses to identify a target market. And they all prove one thing: Knowing your customers is crucial for growing your business.

As soon as you identify a target market, you have all you need to turn your products and services into an offer they simply can’t refuse. It’s also a crucial part of your small business’s marketing strategy and will help you define your USP.

Additionally, you can use your target group insights to move your small business forward: Are you looking to explore new markets? Start by defining your audience.

Is it a new product for your existing clients you’re after? Have a look at your research and find out how you can grow your business by making their life even easier.

Let’s have a look at how other businesses have benefitted from their knowledge and how you can identify your own target market in 7 steps.

A success story

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Patagonia is a well known outdoor clothing brand with a loyal customer base. Their secret? Intentionally targeting customers with values that align with their own.

The company is positioned as environmentally friendly, and by doing their homework, they clearly segmented an audience that was the perfect fit. Eco-conscious customers who love the outdoors and who care about the planet.

By introducing their Worn Wear program, they tapped even further in to this desirable market. The program allows customers to trade in their old items and receive a credit – these items are resold or recycled into new products by the brand. This focus on recycling and reducing waste is an excellent incentive for customers to remain loyal to the brand. Especially when the focus is on quality over quantity!

By establishing this clear market, and creating such a positive customer experience within it, Patagonia turns over around $800 million a year.

Find out more about how you can grow your small business by improving your customer’s experience.

Do your research

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So how can you get started and define a target market? How can you even know what they think and like?

If you have been in business for a while, you can take a lot of your insights from your existing customers. If you are new to running a small business, it’s best to focus on what you expect to be your potential customers.

In both cases, it’s important to talk to people. Depending on your business, you can do that in person over a coffee or with a quick online survey (for example with Survey Monkey).

But don’t just assume you know the reasons they’d buy from you. And don’t just use family and friends. Approach people who could actually be interested in buying from you. And make sure to ask people who don’t know you yet.

It might also be helpful at this point to create a persona. That’s basically a made-up representative of your target market. Having a persona can make it easier to visualise your potential customers and put yourself in their shoes. (Just make sure to focus on relevant attributes rather than random demographics – if your customers align with your core values, their age or income isn’t among the key features to focus on.)

So get started with these 7 steps to identify a target market for your small business.

How to identify a target market

1. The basics

At first, look at your target audience in general:

  • Who are the people or organisations who (will) buy from you?
  • What do they have in common?
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2. Their goals

Now think about their objectives in respect of what you’re offering:

  • What is your customer trying to achieve?
  • What are you helping them with?
  • How would you describe their main goal?

3. Their needs

Next, consider what they need to achieve their goals:

  • What challenges are they facing?
  • What keeps them up at night?
  • How would you define the obstacles that keep them from achieving their goals?
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4. Their triggers

For your marketing, it’s also very important to think about what their triggers are:

  • What situation are they in when they start looking for what you offer?
  • What are the circumstances that led to their need?
  • When are they more likely to search for your products or services?

5. The timing

Now have a look at their most likely habits:

  • When are they most open to what you offer?
  • At what time of the day can you reach them best?
  • Are there times in the year in which they’re more likely to need your help?
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6. The location

It’s also important to know where you can find them:

  • Where do they go for information?
  • Are they online?
  • What are their preferred Social Media channels?
  • Which newspapers and magazines do they read?
  • Are they likely to be a member in a gym or of their local business club?

7. Their values

Last but not least, you have to think about what’s important to them:

  • On what do they base their buying decision?
  • What do they value and what could they object to?
  • How would you define their deal-breakers?
  • What would get their attention & turn them into loyal customers?

What’s next?

Once you have answered these questions, you have put together an important of your business and marketing strategy. It helps you find the right marketing channels and optimise your campaigns for best results.

You can use the insights to create a product and customer service they will never want to live without. And, most importantly, you can use your shared values to build a brand they want to support and be a part of.


If you are interested in reading more about this topic, have a look at these:
Ideal Clients: How to Define & Attract them to Your Small Business
What’s a USP, Why Do I Need One & How Do I Get One?
How I Found My Ideal Client & What I Learned Along the Way
7 Steps to Improve Your Customer Experience

Denise Strohsahl brand and marketing consultant for small businesses

Hello, I’m Denise from sandstonecastles, a brand & marketing consultancy based in Edinburgh, Scotland.

I help small business owners like yourself to find the right marketing that’s in line with your brand and values.