How to Identify Your Target Market
From refreshing your marketing to learning more about customers, here's how to refine your business target audience.
Newer businesses often start out with broad target audiences. Casting a wide net can give you a better chance of finding the right customers—and your business’ sweet spot. But as the business grows, it’s important to refine that audience to make sure you’re serving the segment that best resonates with your business.
No successful business remains stagnant, and as your business evolves, it's important to understand how your audience is changing, too. When you refine your target audience, you will be able to better meet their needs. Consider taking these important steps to refine your target market to your most ideal audience.
Use Market Research
The best way to determine how to sharpen your audience is by using research and analytics. You can purchase market research from expert market research firms, or you can conduct your own research through customer surveys and focus groups.
Online tools like SurveyMonkey make it easy to develop a survey and categorize results to learn more about your audience, divide them into groups by certain characteristics, and learn more about which types of customers purchase most often or spend the most with your business.
Analytics software programs like SAS and Kissmetrics can make it easy to mine data and learn more about your customers and customer groups. When you understand the commonalities among your current customers, you can make more informed decisions about how to refine your target audience.
Don’t Be Afraid of a Smaller Audience
Sometimes it can seem worrisome to have a more targeted audience. After all, shouldn’t a small business be trying to do business with as many customers as possible? But in practice, a business can never be the right fit for everybody, and many customers are likely to be only somewhat happy with the product or service.
Instead, by targeting your audience, you can do a better job serving the exact people you want to serve, and they’re more likely to be thrilled with your product or service. A more refined audience means you’re finding the exact people with whom your products and services resonate, and you’re more likely to earn their loyalty.
Consider this example: If you started a meal subscription service, you might launch the business with a fairly general target audience, such as "people in U.S. urban cities who order takeout three or more days per week." After a few months in business, you might use data analysis to find out more about the people who are actually purchasing your service and sticking with it. That analysis might reveal that the people who like your service best have several things in common, leading you to refine your audience to something like "people in West Coast urban areas who order takeout three to five days a week, are between the ages of 25 and 40 and work from home."
The smaller, more refined audience helps you know how to better reach out to the exact people who are likely to appreciate your service. It may also mean you’ll be better able to completely saturate your target market rather than simply skimming the top of a broader audience.
Keep the Refining Process Going
The most successful businesses have a deep understanding of who they are, how they’re different from the competition, and who they serve. With that in-depth understanding, these businesses usually are able to focus on doing a few things really well, instead of trying to serve a number of different audiences with a number of different products and services.
As you continue to learn more about who your business is and how you’re different from the competition, you’ll be able to determine the strengths you want to focus on. As you do that, you should continue to adjust your target market. It’s an ongoing process.
Keep in mind that no business—and no customers—stay the same for the long term. As your audience changes, you may want to change your business with them. For instance, a wedding photography business may want to branch into newborn photography when their satisfied wedding customers start becoming parents.
Maintaining a thriving business means staying connected to your customers and understanding who they are, how they’re changing, and whether you need to continue refining your audience. Sharpening your target audience doesn’t mean rejecting opportunities for growth; instead, it means maximizing growth among the customers who appreciate you and your business most.