HOW to find your Ideal CUSTOMERS!
Moving on from the competitor analysis we can devote some time to selecting and testing your target market. If you have just entered the business world then this step will take some time before you can narrow down a target market.
Firstly, what is a target market?
A target market is a particular group of consumers that your product or service is targeted at. If we had an endless marketing budget we could just aim our campaigns at every consumer, but how many would turn into conversions? Short answer not many and would be a huge waste of company resources.
The target market can be broken down into various segments. This is often called segmentation of the target market in marketing terms.Here are three basic segments to start your segmentation.
Geographic segmentation divides the markets according to geographic location.
Demographic segments include
- Social class
- Marital Status
and there are much more.
Psychographic segmentation, which is sometimes called lifestyle segmentation, is selecting attributes such as activities, interests, and opinions.
Whilst you can segment further it will not be necessary using social media advertising as such. Let start with an example. Your company sells shoes, more specific children’s shoes. Ok so males from the age of 18 – 30 are probably not a large enough market to spend resources on as the return would be minimal if any. Same for singles, male and female over 50 and so on, but females between the ages of 25 -45 who are married or in a relationship, with interests in fashion and family activities would be ideal. Now I am not saying by any means that if you sell children’s shoes then target this exact audience, but it is a start.
Now, most companies will spread their campaigns over various sets of specific target market attributes and compare results. They build upon over time to narrow down the market so they get maximum conversion rate.
But, as a small business owner or new to the business, you won’t have the time, resources or possibly the knowledge to complete this. My advice to you is simple, build a list of your ideal attributes that your products are designed for. For example, children’s shoes = parents. Break it down further to mostly females, then the average age of a mother with young children is 35. Focus most of your budget on that market and spread the remainder out to test other markets.
I like to split the age into two campaigns run side by side. For example my first set includes
- Female age 25-35, 10 km radius of the shop, income over 60k, interests of family and community.
My second set would be
- Females age 36 – 45, 10km radius, no income boundaries, interests of family and community.
After the 7 days of the campaign analyze your results and record them. If we double the rate of conversions for the first set then apply more time defining that set. Don’t neglect the second set by any means, but limit the budget compared to your return on the investment.
This step does require a fair bit of trial and error but if you outsource your marketing then the agency will have a general understanding of your market and do all the hard work for you. We like to work with our clients using various methods of research to help narrow down and keep on top of the change in the marketplace.
Other ways to analyze your market is through surveys, direct emailing, reviews, questionnaires for a percentage of next purchase or simply out of kindness.
Build your target market sets and transfer them to your strategy.
Join me next time for some insights on how much should you spend on marketing/advertising in a small business. Also, if you want the templates and tutorials for completing your strategy simply subscribe at the bottom of the page.