For any business to succeed, it needs sufficient customers to buy the products or services offered. So it’s essential to take the time to evaluate your potential customer base. You can do this in two ways:
1. If you have an existing business, inspect at your top 20 % of customers (by revenues) and profile them to work out your target market.
2. Identify whom you expect to be your the majority customers – in other words, your target customers.
You can then tailor your marketing efforts, as well as your services and products, to those customers.
How does defining your target marketing help your business?
Having a clear vision of your anticipated customer base will increase your business’ chances of success. By defining your target customers you can:.
1. Better determine if there are enough potential customers for your business (in other words, whether there is enough demand for your services or products.
2. Tweak your products and services to better meet the needs of your potential customers.
3. Focus your marketing efforts to reach your most promising prospects, and create your marketing messages appropriately- using the right tone, language, and attitude to entice your best prospects.
Won’t this limit your market?
This is the worry nearly every business owner has. But defining a target market will not limit your business. Many business owners sometimes resist defining a target customer base, thinking it might limit growth or reduce the number of potential customers.
This is a misconception because identifying target customers does not prevent your business from accepting customers that don’t fit the target profile.
Defining a target market means you get a better return.
Defining a target customer base increases your cost efficiency. Unless you have unlimited marketing resources, it’s much more effective to focus your marketing efforts on potential customers who you have determined are likely to buy your product or service– rather than wasting time and money courting the vast world of prospects who merely could become customers.
How to Define Your Target Market When You Sell to Consumers.
In a nutshell, defining your target customers means identifying the specific characteristics of the businesses or people who you believe are most likely to buy your product or service. These characteristics are sometimes called a demographic profile. Common characteristics used to classify customers include:.
– income level.
– job title
– marital status.
– children or no children
You can then use these criteria to draw a profile of your most promising potential customer – in other words those who have a real need or desire for your services or products.
A shop that sells adventure gear could for example define its target customers as 21 to 35 year old single males living within fifteen miles of the shop.
How to Define Your Target Market when you sell to businesses.
If your business is targeting other businesses (or B2B) you can define your target customer using characteristics such as:.
– number of locations
– business type (independent, franchise, chain)
– number of employees.
– turnover and/or
– geographic location.
Finally, deciding how narrowly to define your target customer is your choice, but in general, you should try to be as being specific as possible. If you define your customer base too broadly, it makes it very difficult to engage in effective marketing efforts.