How To Determine Your Target Market

You can reduce your marketing costs and increase profits by targeting specific groups of people when you market your business. When you understand your target market, not only will you easily reach them, you will also be in a better position to provide services and products tailored to their needs. Here are 5 steps to help determine and better serve your target market.

Step 1: List the types of services or products your business provides. For example, if you run an Accounting and Taxes firm, list the types of services you provide, such as general accounting, tax preparation, notary public, eldercare accounting, and payroll services. The services  you offer will determine if your firm caters to businesses rather than individuals. If you can determine which of these markets your business caters to the most, then you can narrow your search by targeting specific industries or types of consumers.

Step 2: Create a profile for your ideal customer. A customer profile is a list of descriptors such as gender, age, industry, profession, ethnicity, education level, income and lifestyle. Understanding the types of people or industries interested in purchasing your goods and services allows you to market directly to them instead of marketing to a general group. While you should still market to those outside your target market, most of your marketing efforts should be toward this group. One way to create a customer profile includes writing and distributing a survey to existing customers via email, traditional mail, by phone or in-person when they visit your place of business. Another way is to review sales records for the past year to determine which industries or types of consumers purchased your goods and services.

Step 3: Gather information about your customers via a survey. Include questions (multiple choice, fill-in-the-blank, yes or no) to determine the average age of customers, income level, occupation, number of times they use your goods and services each year, reasons for purchasing and other places they go to purchase the same or similar goods and services. Include a comment box so customers can express their opinions about your business or ask for additional goods and services. Place this survey on your website so it will pop-up when people visit your site. Add the survey to your business social media page to gather even more information. Analyze this information to determine which age groups, income levels, industries or specific customers, such as parents, working professionals or retirees, are most likely to make a purchase.

Step 4: Research your competition. Learn what other businesses have done to increase their sales by reading industry reports, business articles or by visiting competitor websites and social media pages. Create a list of markets your competition has cornered to see if there are smaller niche markets closely related to those larger markets that could be profitable for your business. For example, if you are in the event marketing industry and your competition is profiting from doing events for hospitals, investigate the possibility of doing events for medical doctors, dental facilities and other associated niche market in the healthcare industry.

Step 5 – Determine the best ways to reach your target market. Online marketing may be the best way to target younger audiences like the Gen I, Gen X and Gen Y; while business networking events, trade shows, community networking events and cold-calling may be the best ways to reach business owners. Review your customer surveys and take note of which surveys (online, email, traditional mail, in-person) receive the most responses. This may help you determine the best ways to market to a specific group.

Do share with us if you are already engaged in these target marketing activities and how they are working for you. We welcome any comment that can enhance this process.

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Understanding Lifestyles Of Your Target Market

Understanding your target customers’ demographics helps you determine exactly what your products or services will be, and what kind of customer service tactics work best. Smart marketers know there are many subsets of every group targeted and not every message will work on every person. It is still useful to get the big-picture view of your target consumers. If you know, for example, your product will be geared toward seniors, then your research will tell you the font on your website should be easy to read, with a white or light-colored background and that it should avoid excessive use of Flash.

As the boundaries between categories begin to blur, and consumers no longer like to be singled out based on income, gender, ethnicity or education, one of the keys to keeping your marketing cutting-edge is customization, and personalization–essentially letting your customer know you think of them as an individual and understand their lifestyle. If you don’t speak to their lifestyle, a customer will tune you out. Get a firm grasp on the lifestyles of the five very distinct generations:

Gen I
Also called Gen Z, the internet generation or iGeneration, they’re the children of the youngest baby boomers. Because this generation is still very young, marketing and demographics theories are still developing. One huge distinction, however, can be made: This generation is the only one to be born entirely in the internet era, and to parents who are generally more accepting and knowledgeable of such technology. This differs from the next generation, Gen Y, which sometimes dealt with tensions stemming from their parents’ lack of technological savvy or acceptance.

Gen Y
Also referred to as millennials or “echo boomers,” they are the children of boomers, ages 9 – 27. Because of higher costs of living or, in some cases, the over-protective nature of their boomer parents, many are choosing to live at home. University of Michigan economics and public policy professor Bob Schoeni told Time magazine that the percentage of 26-year-olds living with their parents rose from 11 percent to 20 percent between 1970 and 2004. They’re 75 million strong and they have disposable income because of their parents’ support. Growing up with computers means this generation is especially responsive to internet campaigns. They process information quickly and are especially brand loyal. Gen Yers like innovative marketing approaches and advertising that uses humor or is “outside the box.”

Gen X
They are perhaps the most overlooked generation, falling in the shadow of the powerful baby-boom generation. But the 44 million Gen Xers born between 1965 and 1975 are entering their peak earning and buying years. They’re tech-savvy and love to shop. They have a high value for education and knowledge. Unlike Gen Yers, brand prestige alone won’t woo this generation–let them know why your product is a good value. They are independent and like to save.

Baby Boomers
Until the boomer generation hit age 50, marketers generally forgot consumers once they passed that age mark. Today, however, they’re awakening to the buying power of this 76 million-strong group. On average boomers spend $400 billion more per year than any other generation. They’re at many life stages: empty nesters or full nesters, boomer grandparents, single or married, etc. What they have in common is exceptional drive and the ability to evaluate advertising and determine its value to them. Between 2005 and 2030, the over-60 group will grow by 80 percent–as they age, be careful not to label them as “old.” This generation has a Peter Pan complex–play up their youthfulness in marketing.

The Octogenarian/Seniors
Born between 1909 and 1945, today’s octogenarian has seen it all when it comes to advertising, resulting in a particularly savvy consumer segment. They are more careful about whom they do business with, and they want to know more about your business before they choose to patronize it. Having been born during, or lived through, the Great Depression, World War II and many economic recessions, they’re keen on value and in general don’t “shop for fun” as other generations tend to do. They have pensions to rely on that other generations won’t have as they become senior citizens, so concentrate on communicating the value of your product or services. A practical bunch, they also tend to be extremely loyal customers.

Seniors like to spend money on their grandchildren. Seventy-five percent of the over-50 crowd are grandparents; they buy 25 percent of all toys sold in America.

Today’s senior is living longer than ever before, and they’re dealing with fewer acute illnesses and more chronic ones as their lifespans increase due to science and medicine. They want products to help them stay active, learn and be independent. There’s plenty of room in the marketplace for products and services to help them achieve this lifestyle.

It’s a mistake to think octogenarians aren’t using the internet. According to the U.S. Census Bureau, people over the age of 65 spend more than $7 billion per year online.

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