What’s your target market? Why does it matter? GoForth’s President Dr Leslie McGeough has this to say on the topic:
My own business advisor … once told me the field is full of white rabbits. Pick the white rabbit you can catch and go after that one. In other words, there are opportunities and potential targets everywhere. Don’t fall into the trap of thinking “Everyone will buy my product!” Focus, focus, focus.
Read Dr McGeough’s advice on target marketing here, and enjoy!
At GoForth Institute, we recommend that entrepreneurs narrow down their market into a few specific customer groups. These groups should be the most profitable and accessible ones to target.
When you imagine your target market, consider these main elements:
Demographics – Age, income, gender, education, family status, income level, occupation, social class, ethnicity
Psychographics – Lifestyle, personalities, attitudes, opinions, values
Geographics – Cultural, climate, regional and national differences, population density, population growth rate
Behaviours – Buying patterns, usage rate, price sensitivity, brand loyalty, benefits wanted
Then, look for ways you can subdivide this market into one to four target customer segments. Essentially, your overall segments should be basically different from one another, but the members of each segment should be basically the same.
These are the 7 basic rules we recommend entrepreneurs follow when creating customer segments:
There! Now you have a highly targeted group of potential customers you can focus on delighting. Check out our post on the Value Proposition Canvas for your next steps.
Starting a new small business is one of the most exciting things you can do in your life. But at GoForth, we also know that understanding your target market inside and out will increase your odds of small business success.
Imagine you’ve decided to open a flower shop. You find suppliers, lease a building and open your doors for business.
But by the end of your first week you’ve made a total of two sales.
What happened? Here are some possibilities:
These are just four barriers to your business’ success that market research could have revealed. Researching your target market can make the difference between a successful business and one that isn’t. There’s time and cost of associated, but it’s an important investment in your small business’ success.
Quite often, new entrepreneurs think their target market is “anyone who’ll buy my product.” However, this simply isn’t true. Using the flower shop example, maybe your target market is people who are interested in classes on floral arrangement. Maybe it’s influencers who want fresh decorations for the backgrounds of their photos or videos. Take the time to identify your target market.
Great! Check out our blog posts on Primary and Secondary market research
In order to make better use of your marketing dollars, we recommend that you narrow down your market into specific customer groups (anywhere from one to four groups) that will be most profitable and accessible to target.
Our rules for creating customer segments? Glad you asked. Essentially, your segments should be basically different from one another, but members of each segment should be basically the same.
When visualizing your target market, consider the following main elements:
Demographics – Age, income, gender, education, family status, income level, occupation, social class, ethnicity.
Psychographics – Lifestyle, personalities, attitudes, opinions, values.
Geographics – Cultural, climate, regional and national differences, population density, population growth rate.
Behaviours – Buying patterns, usage rate, price sensitivity, brand loyalty, benefits wanted.
Rule #1 Each segment should be measurable; you should know how many potential customers you have.
Rule #2 Each segment should be large enough to be profitable.
Rule #3 Each segment should be basically different from other segments; they should be unique.
Rule #4 Members of a segment should have common, unsatisfied needs.
Rule #5 Each segment should have strong growth potential.
Rule #6 Each segment should be suited to your company’s goals and capabilities.
Rule #7 Each segment should be accessible through communication and distribution channels; you have to be able to reach them with your message.