30 Oct Expert Strategies on How to Identify Your Target Market
When you spend sleepless nights developing your product and hundreds of dollars on a digital marketing campaign, you want to make sure your message resonates well with your potential customers. While many businesses mistakenly believe their target market is composed of anyone who is interested in their product, general advertising is rarely effective especially if you’re using the internet to promote your brand.
Types of market segmentation
Businesses adopt different approaches to target market segmentation. There are four main segments that you can use to group your audience:
- Geographic – targeting customers according to a geographic location on the premise that different values, preferences, and interests greatly vary across different cities, countries, and regions.
- Demographic – in this type of segmentation, you divide your target market according to population characteristics such as age, education level, gender, family size, income, and occupation. Targeting according to demographics is one of the most popular forms of market segmentation.
- Psychographic – refers to intrinsic traits such as personalities, attitudes, interests and lifestyles. You divide the market according to political opinions and subconscious motivators.
- Behavioral – segmentation according to the decision making processes that customers go through towards making a purchase. This could refer to attitudes towards the product and brand and knowledge of how to use it among other things.
In a previous post, we have already discussed the reasons why it’s important to have a clear idea of your target market demographics. Now let’s talk about how exactly do you go about identifying your ideal audience.
1. Identify what needs your product fulfills
The first step in identifying your target market is to go back to your product. Who is most likely to benefit from or use your product or service? Create a persona for this customer and consider identifying characteristics such as age, geographic location, marital status, buying power, etc. Differences in income level or age affect how people react to certain products. For instance, a middle-aged women spend more on high-quality clothing while millennial women are still running after trends and are more inclined to purchase fast fashion at a lesser price.
2. Use the funnel method
Many businesses use the funnel approach when narrowing down their target market. This divides a customer base into different buckets. For instance, you might want to start with gender for your first bucket if you are offering a gender-specific product or service. Then you narrow it even further through the second bucket: age group. Next would be the income level. As you go through several filters, you get a more streamlined and focused group of people to sell your products to. You can experiment and create marketing campaigns targeting different filters and analyze the results.
3. Collate data from various sources
Assuming you already have a website representing your brand, Google Analytics is a good source of information for gathering data on your target market. It gives you relevant insights on the kind of customers your brand is attracting. What demographic groups are interested in your product? When do you usually process sales transactions? What are the most popular items in your inventory? You can also look into your own business data about your customers. If you are offering a product that’s similar to that of other businesses, do competitor research and learn more about their market niche. Conduct your own surveys within your community.
4. Look into your own network
Another way to identify your target market is to look into your own network. Observe your family and friends and find out if they would buy your product. You can ask them if they would buy it or if they know anyone who would. This gives you a clearer view of the kind of person who would not just need an item or service that you’re selling but would actually buy it.
5. Do not make your target market segments too small
It’s impossible to appeal to every single personality. Every individual is unique so if you’re too detailed with your market segments, you are at risk of losing your niche’s buying potential or creating segments that may be too small to attach quantifiable metrics to. Everything in moderation applies even on narrowing down your target market.