Defining and Refining a Target Market Means Identifying the Box
Target markets, those groups best benefited by your product or service, require definition. Most entrepreneurs identify a category of business they plan to penetrate. Then, satisfied that they have covered target marketing, their thoughts turn to physical elements such as the logo, the tag line, and so forth.
I find business owners target broadly because wide targets are safe. Hence, my target is adults, or my target is women, takes away the fear of missing an important segment of the audience. This is the outer ring of a visual target. Finding the bulls-eye, or narrowing the target takes research, some of which can be accomplished with input from the customer. For example, formal and informal surveys offer insight on preferences, framing customer opinions and offering additional considerations for product/service improvements.
Sometimes, the broad target that comes easily to mind works against the product/service sales goal. One 50-something entrepreneur I know took her business plan to the bank; shed invested more than $100,000 of her own money and needed additional capital for manufacturing. The banker, a young MBA argued with her about the target. Im afraid youre missing the boat, he said. Young urbanites with kids are a better target; there are more of them.
My friend explained that her feedback had indicated the primary purchaser was a 53-year old boomer grandparent. She pointed out that the younger audience, when surveyed, used price as a reason not to buy. Because her customers said differently, she refused to change the plan.
The discussion resulted in no loan. Each person thought that they were right in their stance. Of course, if the banker were wrong and even if he provided the loan he would simply be wrong. The entrepreneur would still be out the time and money.
Incidents like this remind entrepreneurs to target carefully, review customer feedback often, and prepare to defend challenges to assumptions. This is far easier with well-planned and narrow targets or niches. Clear definition creates traffic and eliminates unnecessary browsers.
Consider another example: landscapers. One advertising strategy involves direct mailing a zip code with a postcard about xeriscaping. A more effective move might involve door-to-door delivery of a small plastic bag filled with rocks and a brochure. Only those homeowners with a yard actually receive the bag of rocks, an extremely well-targeted tactic. All residents, including those with apartments and condos and no yards, received the zip coded post card.
The reason to target is simple: were so inundated with messages that even targeted communications can have trouble getting through. Instead of shouting at a field full of people, have an intense conversation with two prospects who are sincerely interested. Surprisingly, this method of communication increases your firms chances for success. Think of it as defining the box.
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