How to Determine Your Target Market
So, how do you figure out if you should design your company for savvy real estate agents or middle aged women with a household income of 50k to 80k? Or, put another way, how do you narrow down and define your target market?
Asking potential buyers questions before you commit to your idea is invaluable. Their responses may help shape your business.
This section will help you to:
Step 1: Determine Your Possible Market Segments
No matter if your business is selling an app, drones, landscaping services, coffee, pet care, painting services, biotechnology—or anything in between—you’ll still need to figure out the main groups of people, or market segments, you could potentially sell to and what features matter to them.
What are the most important benefits of your product to the people that you will be serving?
Wait. Did you really just Ask Yourself that?
If so, great! Knowing the benefits will help you narrow down your potential target markets. But how can you be sure you are right—that you know what your customers think are the most important benefits of your product or service?
Asking yourself is a great first step, then you’ve got to get out and talk to them. Figure out what they’re currently using or doing to solve the problem that you solve and what matters to them. Do interviews, surveys, focus groups—whatever makes the most sense for you and your business.
Based on what you find out, determine your market segments. Your market segments should each have a similar need for your product or service.
Step 2: Determine Your Market
Your target market should be focused on a smaller, more profitable customer group within your total market.
Divide your market into workable segments (based on demographics, psychographics, behaviors, etc.), if that’s helpful.
Keep in mind that for target marketing to be successful, the following objectives must be met:
Join Webinar – Target Market
In this webinar, we will start to brainstorm who your potential customers might be. This is just a theory at this point. We’ll look at criteria or elements of a target market (i.e. location, gender, age, business of personal needs, shopping behaviour, disposable income, how reach? etc.), and create a sketch of your potential ideal customer – the one most likely to buy from you.
We will also discuss sending out customer surveys. The next lesson takes you through the steps of creating and sending your survey. Depending on your preferred learning mode, there are screenshots with instructions, how-to videos, and downloadable help guides. Remember we are here to help if you get stuck. Don’t wait to ask for help!
Brainstorm potential market segments. Use the spaces provided below in your Notes Tool to make a list of potential market segments for your product or service, and to articulate why you’ve chosen these segments.
Example for a Painting Contracting Business
Market segments for my business could be: Commercial construction, residential construction, remodeling, repairs.
I have chosen these market segments because: Customers within these market segments have a similar need for the type of work performed.
[icon name=”bolt” class=”” unprefixed_class=””] Top Tips
If you are still unclear whether your target market is primarily other Businesses or Consumers, or a combination, please read the following suggested resources. Depending on your primary audience, you will choose a survey template for either Business-to-Business or Business-to-Consumer.
Is your Primary Target Market Business-to-Business? If so, complete at least 10 business surveys.
Is your Primary Target Market Business-to-Business? If so, complete at least 5 business surveys.
Is your Primary Target Market Business-to-Consumer? If so, complete at least 25 surveys of people that fit the profile.
Is your Secondary Target Market Business-to-Consumer? If so, complete at least 12 surveys of people that fit the profile.