For your business to succeed, it must have enough customers to buy the product or service on offer. Before starting your new business, take the time to evaluate your potential customer base. Find out who you expect to be your most likely customers – in other words, your target customers. Then align your marketing efforts, as well as your products and services, with these customers.
Why Is It Important To Define Target Customers?
Having a clear vision of the expected customer base will increase your business’s chances of success. By defining your target customers, you can:
• Better determine if there are enough potential customers for your business (in other words, if there is enough demand for your products or services;
• Tailor your products and services to better meet customer needs and desires
• Focus your marketing efforts to reach your most promising prospects and
• It helps to work out your marketing messages properly – using the right tone, language, and attitude to please your best prospects.
Defining your target market will not limit your business
New entrepreneurs sometimes oppose setting a target customer base, thinking that this may limit the business or reduce the number of potential customers. This is a misconception. Identifying target customers does not prevent your business from accepting customers who do not match the target profile. If such a customer is looking for your product or service, you will still be available.
Defining the target market will increase cost-efficiency
Defining the target customer base increases cost efficiency. Unless you have unlimited marketing resources, it’s much more effective to focus your marketing efforts on potential customers you’ve identified likely to buy your product or service – instead of wasting time and money courting the vast world of prospects, you will focus your resources on people that could become your customers.
How to Determine the Target Market
In short, identifying your target customers means identifying the specific characteristics of the people or companies that you think are most likely to buy your product or service. These characteristics are sometimes called demographic profile. Common characteristics used to classify customers include:
Age has a strong influence on the interests, needs, and lifestyles of consumers. It makes no sense to advertise anti-wrinkle products to 18-year-old girls or to try to intrigue a 35-year-old lady with products with the image of teen idols. By determining the age category in which the users of the specific products/services fall, we manage the advertising budget much more purposefully and effectively.
Gender is important for targeting in most businesses. It is logical that if you sell motor oil, you will have better results if you “aim” at the male audience. By no means do we want to convey what we recommend to people that have no interest in the niche?
For example, if you invest $500 in motor oil advertising in front of a female or mixed audience, you are much less likely to achieve as good results as you would have if you invested the same $500 in advertising only for men over 25 years.
Here, age is again a factor. Usually, younger men either do not have their own cars or their maintenance is not their responsibility.
Location is important for two main reasons.
The first: it determines the time zone in which our potential customers fall. Thanks to it, we take into account at what time of the day the ads should be active, as well as in what time zone we will communicate with our audience.
The second reason: if you do not correctly determine the location of your users, you will not reach the right people, i.e., you will not achieve the desired results and you will suffer losses from lost profits.
Forget the presumption that your users automatically speak/understand your native language. It is crucial to consider the “language” factor when working for a foreign market. This business is successful if it speaks the language of its users.
Interests give rise to our needs and desires as consumers. No matter how ingenious a product is, no matter how reasonable the price, attractive – its packaging, no matter how high its quality, the chance to be bought by someone who is not interested in it at all is negligible.
• Stage of life
It is important to determine at what stage of your life is the audience to which you would mainly like to direct your message. The priorities, needs, and “pains” of teenagers, students, graduates who are now looking for work, people between 25 and 40 years old, those who have already raised their children, and retirees will be completely different. The way of life they lead is different, the priorities are totally different, and their material status also varies significantly.
• Financial Status
It is good to take into account the financial status factor when determining your potential customers. Solvency greatly affects the lifestyle that consumers lead and the purchases they make.
Create a customer profile
Use these criteria to create a profile of your most promising potential customers – those who have a real need or desire for your products or services. A maternity store specializing in professional clothing, for example, can identify its target customers as 25- to 40-year-old pregnant, married women in the legal, financial and real estate industries, within a ten-mile radius of the store.
A bike shop focused on single-track mountain biking equipment can identify its target customers as 18- to 25-year-olds living within two miles of the local university.
Deciding how narrowly to define your target customer is an art rather than a science, but you should generally be misled by the specifics. Business owners often make the mistake of defining their customer base too broadly, making it very difficult to commit to effective marketing efforts.
Remember: a solid definition of your target customer serves as the basis for all your marketing activities. The more carefully you define your target market, the more likely your marketing efforts – even simple, inexpensive methods – will yield results.