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

computer gamers as target marketA few years ago, Pizza Hut increased their turnover substantially by simply doing their homework. They found out that most of their core customers order pizza when playing computer games.

So they created an online delivery app on the Xbox game console and within four months they had $1 million more to their name. (Read more about Pizza Hut’s success story.)

What they did was to identify a target market and find out everything about their habits and their preferences. Then they used this knowledge to make their customers’ lives easier by adding a marketing channel and simplifying the ordering process.

Not that gamers couldn’t pick up the phone or go online to order their pizza fix. But being able to order food without even putting down your controller? It’s a dream come true for them.

Being the first and only delivery service on the console certainly weighed the odds in their favour. And it attracted new customers to boot. According to their data, around 11% of their orders through the app were from first-time customers.

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

Do your research

coffee cup on table reading beginSo 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. You can even give him or her a name and a face (check out Jakub Linowski’s persona icons, for example).

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

Write down the demographics of each one of your target groups:

  • Are they predominantly male or female?
  • How would you define their age range?
  • What industry sector do they likely work in and what job titles do they have?
  • What’s their education level and income?

2. Their goals

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

  • What is your customer trying to achieve?
  • 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?

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?

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?

WANT TO READ MORE?

If you are interested in reading more about this topic, have a look at these:
Marketing Strategy for Small Businesses: Why You Need One & How to Define it
What’s a USP, Why Do I Need One & How Do I Get One?
Small Business Brand: What Is It, Why Do I Need One & How Do I Get One?
7 Steps to Improve Your Customer Experience


 

Published byDenise Strohsahl

Denise Strohsahl is an Edinburgh-based marketing consultant, specialising in helping small, local businesses get more of their ideal clients.