Oct 26, 2023
So you started a business – you know that your product or service would be a great solution for your people’s problems, but how do you know for sure? The key is to understand your target market. A lot of small business owners tend to skip this, but it’s a crucial step in planning out your business and marketing strategies.
By definition, a target market is a group of potential customers who are most likely to use or buy a product or service. Not having a target market is like shooting in the dark, which, in marketing, can mean thousands of wasted dollars. Assuming who your target market is and understanding them are two different things, so we listed down a few different tactics to help you identify and understand your future potential customers.
Start With Why
A great starting point would be to think about your product and why people would want to buy or use it. What problems does it solve? How can your product be of value to them?
Let’s say you have a SaAs productivity app that aims to save people’s time by diminishing the need to use multiple apps. This can be attractive for teams and freelancers (who can afford to pay a monthly subscription fee) to help them save time. Now let’s look at their “why”. More time means more time to get new customers, which in turn means higher revenues. By subscribing to your app, they’re actually investing in streamlining their operations to focus on company growth.
Conduct Market Research
Now that you have an assumption of who your customers are, it’s time to confirm whether or not the assumptions are true. Effective market research consists of understanding five key areas surrounding your business – demand, market size, economic indicators, location, market saturation, and pricing. There are 2 ways to conduct market research. The first is to gather existing data and the second one is to go directly to consumers.
Here are the few common methods you can use to do direct research:
Segment Your Market
Once you’ve gathered all the data from your research, you can start creating segments around them.
You can segment your audience by answering identifying their demographics (age, location, gender, income level, marital status, education level, occupation, ethnic background), and their psychographics (personality, attitudes, values, interests/hobbies, lifestyles, behavior) and grouping them based on similarities.
Don’t break them down too far, and remember that certain niches can be combined if there are a lot of overlapping traits. The key is to find a balance between targeting everyone and targeting a very small niche.
This way, you will be able to customize your marketing message and ad targeting to each particular segment.
Analyze Your Competition
Knowing your industry and competitors is important so you see what else is available on the market. This is also a great opportunity for you to learn about your competitors’ strengths and weaknesses, and generate a value proposition that would make customers want to buy your product instead of your competitor’s.
Tools like Quantacast, SEMRush, SimilarWeb, Google Trends, and Alexa can help you see and assess what your competitors are doing and where they are. Seeing this data will help you understand industry trends, standards, and best practices.
Once you’ve completed your analysis, it’s time to start working on your marketing strategy. Don’t know where to start? Contact us to see how Brand Captain can help you reach your target market through social media marketing.
Sources:
https://www.thebalancesmb.com/target-market-defined-1794389
https://www.sba.gov/business-guide/plan-your-business/market-research-competitive-analysis
https://www.inc.com/guides/2010/06/defining-your-target-market.html
https://smallbusinessbc.ca/article/importance-understanding-target-market/
https://squareup.com/us/en/townsquare/how-to-define-analyze-your-target-market