When launching a new product or service, it may seem very limiting to narrow your market, but it will work in your favor. If your target is too broad, it will be difficult and costly to develop effective promotional messages or reach your more active end users.
Targeting a specific market does not mean that you are excluding people who do not fit your criteria. Instead, target marketing allows you to focus your marketing dollars and brand message on a specific pool of prospective clients that are more likely to buy from you. Think of the brand Huggies, which sells a line of disposable children’s diapers. The people most likely to purchase from Huggies probably have or care for young children. For this reason, it would make more sense to market this product to new families as opposed to single Millennials. Relevance of the product to the consumer is just one of the reasons why target marketing is both an affordable and effective way to reach prospective clients and generatemore revenue.
Here we share three steps developed by Jill Johnson, president and founder of Johnson Consulting Services, to help you establish effective target markets for sales results.
1. Clarify Your Market Segments. The first step is to start identifying patterns in the attitudes, desires, concerns, and decision-making criteria of your prospective consumers. By understanding these characteristics, you can tailor your marketing approaches to reach your target audience and influence their purchasing decisions.
A common step in identifying these patterns is to assess the demographics of your consumers base. There are many demographic variables that can be identified and measured in a consumer market, such as age, gender, income and marital status. Business consumers can consider aspects such as number of employees, revenue, or years in operation. Knowing where your consumers live or work is another method of evaluating your target market.
Understanding your consumers’ intentions, buying motivations and interests also provides powerful opportunities to develop messages designed to trigger a buying response.
2. Mine Your Data. The critical step to developing your target markets is to quantify your market size. You can do this by data mining. Data mining involves analytically reviewing your internal consumer and comparing this to external market information. Look for patterns and relationships to help understand your consumers’ buying patterns, which present opportunities to influence them at each stage of their buying decision-making cycle.
Start by reviewing your internal consumers data. Prepare historical summaries reflecting several years of data. Most people only look at one year of data—this is not sufficient to help you determine whether your market has achieved its maximum potential or whether it is declining. What types of consumer profiles can you create about the end users that buy from you? When do they buy? Who is most profitable to you? Start evaluating how effectively your marketing approaches reach them and match their purchasing decision approach. Then, conduct a detailed review of the available external data. Assess how your current consumer profile aligns with the real market opportunity. Do the demographics show a potential for long-term growth? Does the data show anything else that might impact your sales?
3. Tie Your Target Market To Your Promotional Activities. Your promotional activities must be consumer-oriented and align with how, why and when the consumer buys. Where do they look for information to solve their problems or meet their needs? Who or what influences your buyer? It is not only about the product. You will need different marketing messages for those who are at the awareness stage, which consists of gathering information, then those who are ready to make a final purchase.
Help your prospective consumers understand how you will help them solve a problem or meet a need by using your target market insight to customize your promotional messages. Tie your promotions to their decision-making cycle and move them through their purchasing decision-making stages.
Source: Jill J. Johnson is the president and founder of Johnson Consulting Services, a speaker, an award-winning management consultant, and author of the Compounding Your Confidence.
Johnson helps her clients make critical business decisions and develop market-based strategic plans for turnarounds or growth. Her consulting work has impacted more than $4 billion worth of decisions. She has a proven track record of dealing with complex business issues and getting results.