For a company to succeed, it must find enough people to buy its products and services. Before starting a small business, take some time to evaluate your prospective customer base. By figuring out who your target market is, you’ll find it easier to tailor your offerings and marketing efforts to them.
Finding Your Target Market: Why Is It Important?
Knowing your potential customer base will increase your company’s likelihood of success. By defining a target market, you can:
- Determine if there’s enough demand for your offerings
- Modify your concept to meet the customer base’s needs
- Tailor your services and products to your customer base
- Direct marketing efforts to the most promising prospects
It’s impossible to limit a small business’ growth by defining its target market. New business owners sometimes skip this step, but that’s a big mistake. Finding a target market won’t keep you from bringing in customers that don’t “fit the mould”. If they want your products and services, you’ll still be there.
Defining Your Business’ Target Market
Finding your customer base means identifying the characteristics of the businesses and people that are likely to purchase your services and products. The most common attributes are:
- Buying behaviors
- Family and marital status
- Ethnic group
- Political affiliation
Use the above criteria to create a profile of your ideal customer—a person who is genuinely interested in your offerings. Deciding how narrow your definition will be isn’t an exact science, but it’s best to be as specific as possible. The more carefully your small business’s target market is defined, the more likely your marketing efforts are to succeed.
When Other Businesses Are Your Target Market
Some companies market their products and services to other businesses, not individuals. B2B or business-to-business marketing is lucrative because businesses typically buy in more significant quantities than individual consumers do. If you’re targeting other companies, use characteristics such as these to define your market.
- Number of workers
- Industry size
- Geographic location
- Annual sales
By using these criteria to find your target audience, you’ll learn how to create more effective marketing campaigns.
Finding a Niche
A niche is a specialized or narrow market segment. In a competitive marketplace, niches help companies distinguish themselves from their competitors. Finding a niche is a profitable and effective strategy for a small business owner because it’s expensive and time-consuming to cater to a broad audience. A niche is a hook with which you can reel in the best prospects.
Continuing the Process
For a small business to succeed, you’ll need to approach market research and target audience definition in a circular fashion. Begin by finding the right prospects based on careful observation. Then, learn more about your audience’s habits, your competitors’ behaviours, and industry trends.
Based on your research, revisit your business concept and your defined market. If needed, make changes to your niche or audience to fulfil unmet market demands. Learning about your target market and adjusting your strategy is a continuous process, and it’s the heart of a successful small business.