How well do you know your target market?

Do you try to be all things to all people, or do you focus on your target market?

The term ‘target market’ has been a key element of marketing for years – as trends emerge and concepts evolve, the concept of a target market has remained a consistent and central element to successful client acquisition.

I’ve touched on the importance of defining your target market when talking about the five M’s of marketing (Market, Message, Media, Moment and Method), yet one of the biggest mistakes made by many businesses is trying to be ‘all things to all people’.

What is a target market?

A target market is a clearly identified and defined group (or groups) of people or organisations that align with specific criteria. In general, you can categorise groups based on:

• How many people need or want your product or service
• How many of those people can afford your product or service
• How many can easily be reached via your marketing, and
• How many have similarities (such as a demographic) that can enable you to group them together.

For example, a graphic designer located in central Sydney would have a vastly different target market to that of a mechanical workshop in Bathurst. Why? The mechanical workshop is limited by locality and the graphic designer is not. Their potential clients also have different needs and different budgets – a family having their car serviced does not have the same budget as a large corporation would spend on a branding exercise. So it makes sense that the methods (and the messages!) that each business would employ to communicate with their specific target market would be vastly different.

And if they aren’t, you are inevitably wasting your marketing dollar. Yes, you may make a lucky catch, but the odds of not only capturing the attention of the right client, but also of converting them into a paying customer, are not in your favour.

If the concept is so popular, why don’t more business owners identify their specific target market?

Many business owners general don’t identify their target market because of one of two reasons:

(a)  They aren’t actually sure who or what their target market is, or

(b)  They are scared to ‘limit’ the amount of potential clients they target.

If you fall into Category A, a good accountant with strong business development skills will point you in the right direction. If, however, you are in Category B, you need to revise your approach because nothing could be further from the truth!

Why is knowing your target market important?

Knowing your target market, and developing a marketing campaign that caters specifically to their needs and wants, will deliver a higher response rate. And not only will relevancy ensure that their response rate increases, but your conversion rate will increase, too. It’s not all about getting a response – it’s about converting that response into a sale, and retaining them as a long-term client.

So – if you’re going to spend your marketing dollar, how would you like to do it? Throwing out a fishing line with no bait into the ocean (mass marketing), or placing a tasty tidbit on the line into the lake (target marketing)?

The answer is simple. Just because there are more fish in the sea, it doesn’t necessarily mean that you will get a bigger slice of the market. Concentrating your efforts on a particular target market enables you to provide them with relevancy. Relevancy increases the likelihood of a sale. And that is what will deliver you a bigger slice of the market.