Why and How to Understand Your Business’ Target Market

One of the most important things to nail down in the early stages of a new business is your target market. Without a clear audience in mind, your marketing efforts may not go the way you envisioned — or worse, your entire business will lack a clear direction. There are three big reasons why defining the target market is crucial: first, it focuses your product design and function; second, it clarifies your messaging, and; third, it can save you considerable costs, while maximising your marketing budget.

However, deciding on your audience is easier said than done.

Identifying the Target Market

A common mistake new entrepreneurs make is insisting that everyone is their target market. The reality is that no product, regardless of its popularity or its owners’ belief in it, will cater to or be liked by everybody. Ironically, saying that everyone is your audience actually indicates that your product or service appeals to no one at all.

Based on other companies’ success stories, a smarter business move is to focus on a niche. For instance, Network She previously explored a great marketing move by toy company Hasbro. In the 1980s, the company narrowed the target of its toy G.I. Joe from boys aged 5 to 12, to boys of the same age who liked comic books. Just a few months after this shift, a fifth of its audience had a G.I. Joe action figure; and seven years later, this number was at an impressive two-thirds.

Why the Need to Go Niche?

Although a larger target market may sound like more opportunities for sales, the lesson here is to not underestimate the power of a small group of dedicated consumers. That’s because they can actually offer better opportunities for sales growth. In this regard, note the long-held 80/20 rule, where 80% of a business’ profits tend to come from 20% of its customers. For example, an ice cream brand can build a loyal fan base of lactose-intolerant customers if it decides to sell milk-free ice cream. The same can be said about eco-friendly and sustainable fashion brands who want to target environmentally conscious fashion enthusiasts — even if both groups tend to represent the minority.

One helpful tip to get started on identifying your target market is to list down what needs your product fulfils. From there, you can then determine which groups of people are most likely to use it. Consider different factors like age, buying power, and geographical location. You can also scope out the competition and study their current customers. Instead of going after the same end users, analyse a niche audience other companies are overlooking.

Understanding the Audience’s Behaviour and Interests

Target market research goes beyond knowing numerical demographics. It also involves studying a group’s psychographics, which include, but are not limited to: personality, values, attitudes, lifestyles, interests, and the like. These details can help a business form more effective marketing strategies.

For instance, in order to appeal to a younger audience, global makeup brand Maybelline launched influencer campaigns and tapped “social media supermodel” Gigi Hadid. This is because millennials and members of Gen Z have been found to trust the word of bloggers and social media personalities more than they believe in advertisements. Maybelline’s move is one of the many ways businesses can take advantage of psychographic information.

Traditionally, psychographic data is obtained through personal interviews, focus group discussions, or questionnaires. However, advanced tools like web analytics have made it even easier for companies to gain insights on their potential customers. Jessica Neale’s article on Ayima titled ‘Understanding Your Target Audience for Content Marketing’ points out a key detail you can derive from analytics data, which is how your audience likes to consume content. This information can be taken from the source of your web traffic. Once you understand the type of websites your target market visits, how often they do it, and why, you can then narrow down where you should focus your marketing efforts.

Crafting Tailored Messages

Knowing and understanding the target market allows you to craft messages that speak directly to them. For example, a company that wants to sell weight loss pills to new mothers can launch marketing campaigns on regaining your pre-pregnancy body. A brand that wants to appeal to teens is likely to explore resonating terms such as “Stan” and “Woke” in its social media posts.

These kinds of messages are made through effective copywriting. The idea is to make the target end user feel like your offer is exactly the answer to their problems. The Balance’s guide to copywriting lists several key steps in preparing compelling messages, including reframing your products’ features to customer benefits, writing down your unique selling point, and mentioning proof of your product’s claims.

Once you have laid down the groundwork, you can then tailor-fit the copy to your market. Since you already know your market’s psychographics, you’re more or less equipped to come up with messages that can appeal to their emotions. Take a look at Nike’s timeless “Just Do It” campaign. In the 1980s, Nike’s competitor Reebok focused its campaign largely on the era’s aerobics and fitness craze. Nike responded with a campaign that resonated with people regardless of physical fitness level or exercising preferences. Because of this, the brand is worn today not just for sports purposes, but also as a fashion statement.

In Summary

Target market research often takes plenty of effort and time, but the results will surely help a new business achieve its goals. Remember that what you have is only as good as your ability to communicate its benefits to the right people. Therefore, a good product or service will likely go to waste if you don’t know who you’re talking to — and why.