Knowing your target market, your ideal customer is an essential element in formulating a winning business plan and marketing strategy. Even the largest and most diversified multinationals with all their resources don’t try to sell all things to all people. It’s even more important for a new startup with a limited budget to ensure that those marketing dollars are spent wisely. Targeting the right customers is crucial to every business.
If you haven’t already done so, identify your niche market. It may be people in a certain line of business, or of a certain age, or who reside in a particular geographical location. They may have a common interest or hobby. They may even be of a particular personality type. The point is, the people in your target market have something in common and that is what you are homing in on. It’s not enough to say that they all use your type of product or service. Why do they use it? What value or benefit do they derive from it?
Your identified niche market should have the following features:
Everyone in it has similar needs that set them apart from the broader market for your product or service.
Your product or service addresses those needs better than the competition (a unique offering matched to unique needs); in other words, you are able to offer compelling reasons for them to buy from you.
You can afford to market to this niche – i.e. can you reach them simply, directly, and affordably?
Your niche is big enough to provide you with enough business; i.e. are there enough customers for your business to be profitable?
Ideally, your niche is currently ‘under targeted’ by the competition… which would suggest that you are offering something unique.
Having identified what appears to be a viable target group of potential customers, now ask yourself a few questions to assess this market’s viability before you proceed any further.
1. Is this target market growing or shrinking?
2. What does the average member of this target market earn? What’s their average disposable income?
3. Furthermore, how much of that disposable income do they tend to spend on your type of product or service?
4. If your business is location-dependent (e.g. a store), where are your target customers located geographically? Is this population increasing or decreasing in the local area?
5. How much of this market can you reasonably expect to hold and within what time period.
If the answers to these questions don’t align with the goals in your business plan then either this is the wrong niche market for your business or you should revisit your business goals to see if they can be adjusted.
Assuming you now have a viable niche market, the following tactics will help you reach out to the people in it:
Hold out something that will make them feel ‘special’, either a product or offer that relates to their niche nature, or perhaps simply emphasizing that yours is a new venture – people often enjoy being in at the beginning of something.
Encourage them to visit (physically or virtually) with opening discounts and giveaways – free samples, free downloads, free information – whatever appeals to their niche profile.
Look to establish and ongoing channel of communication, perhaps through signing up to a newsletter or regular emails. This becomes a potential avenue for two-way dialog and even viral marketing in the future.
Provide offers and incentives that encourage them to pass information about your business to others, e.g. affiliate deals, two-for-one offers, ‘bring a friend’ deals, and so on. All the time you are looking for them to bring other members of your niche market within your business sphere.