Who’s your customer?
That’s one of the most important questions any business can answer, but it’s particularly important for small companies. Why? Because only by having a very clear definition of the exact type of customer you’re trying to reach can you make the most of your limited marketing dollars and have the biggest impact on your bottom line. You need to know your “target market.”
Narrowing in on the type of customers you’d most like to reach — and the kind that are most likely to be willing, eager and able to buy from you — is a key building block to success. Defining your target market gives focus to all your marketing and sales activities, helps you craft your advertising messages and images, choose where and when to advertise, influences which distribution channels you use and perhaps even helps you decide the color of your employees’ uniforms or the music playing in your store.
Let’s say you’ve come up with a new kind of energy bar. You know it would be good for a whole range of people: health buffs, serious athletes, college students, harried moms and busy workers that can’t get away for lunch or a snack and just about anyone else who could use a quick, healthy pick-me-up.
That doesn’t seem like a very diverse target market, but stop and think about it. All those people shop at different stores, read different magazines, visit different Web sites, listen to different radio stations. If you tried to sell to everyone who might buy your product, you’d need a fortune to spend on marketing to make them all aware of you.
Even if you had the money, what would you say in your ads, what kind of people and images would you feature? Would an athlete respond to a package with a picture of a mom and her 2-year-old, or vice versa?
No, you’ve got to make some tough decisions. You need to select one or two market segments to pursue, especially because yours is a new company with limited resources. But whom should you sell to? How do you target your market? You have to identify the factors that best make you able to compete, reach and sell to a specific type of customer.
When defining your target market, keep the image of an actual target in mind. The outer-most ring of the target is the whole universe of potential customers, everyone who might ever possibly be interested. As you get closer to the center of the target, focus in on the customers who are more likely to actually make a purchase. The group at the center should be those you would most like to have as customers, you can reach and sell to affordably, and are most likely to buy.
Some of the factors in closing in on the bull’s-eye in your target market:
Features and benefits of your product or service. Which group is your energy bar best suited for?
Competition. Is there a segment of the market that other energy bar -makers are not reaching or are under-serving?
Market trends. Is there a part of the overall market for energy bars that is growing?
Most motivated buyers. Which part of the market has the most immediate need or desire to purchase energy bars?
Most ability to purchase. What type of customer is most likely to have the disposable income to spend on energy bars?
Ease of reaching your prospects. Is there a part of the market that is easiest to tell about your energy bars because of trade shows, media (such as magazines), or other communications directed specifically at them?
Ease of selling to your prospects. Are there any existing distribution channels (such as specific stores, Web sites, wholesalers) that make it easier or less expensive to reach one part of your market?
It’s always scary to narrow your market. But only by understanding your key target market can you make the most of your limited marketing dollars.
Rhonda Abrams is the author of “Six-Week Start-Up” and “What Business Should I Start?”
