Get to Know your Target Market(s)
You already know your products and services, but how well do you know your customers and prospects? Marketers have a name for them: your target(s). They’re the people you sell to—or plan to. They’re the people you think about first when designing your offers, your marketing and advertising campaigns, your entire business, really.
So it helps to get inside their heads a little, in order to move your business forward based on knowledge and data, not assumptions. Data-driven targeting follows a simple and logical process:
• Learning about your customers/prospects and the relationship with your products/services
• Learning where your business fits into the existing marketplace
• Using the information you’ve gained to align products/services with the data
Start with actual customers and prospects. Who are they? Where do they live? What’s their income? What’s important to them? Where are they in terms of education, lifestyle, life stage (i.e. young adults, parents, retirees)? Why do they patronize your business (or a competitor’s)? What do they like and dislike about your products/services? What changes would they like to see? What seasonal or other buying patterns can you discern?
One way to get at this information is to create a detailed, granular customer database—or a representative sample of them. The more you know about them individually the easier it becomes to analyze their purchase behavior. Be as observant as you can and organize the data you collect so you can use it effectively. As an example, high-end restaurants can tell you when their best customers come in, what they order, where they sit, whom they bring with them and much more.
Whether you sell to retail consumers or other businesses, the same concept applies. Another way to gather data is by asking. A simple on-site survey can work. An email survey, perhaps with an incentive attached, can also work. It may help to spend some quality time interviewing a few customers you can trust for more in-depth data. If your business lends itself to it, think along these lines.
Know your competitors. Where are they located? How do their products/services and prices compare with yours? Are you all geographically spread out or clumped together in a particular part of town? How do they approach their marketing challenges? Have any competitors closed permanently, leaving a potential untapped customer base? Similarly, have any competitors expanded recently? If so, do you need to re-think your own marketing? In terms of scope, your competitive analysis should match your own area of focus. If you sell to a strictly local base of customers, focus mainly on the local marketplace—unless you plan to expand into other markets.
You can find affordable analytic tools at major tech companies (Google and Facebook, for example), and free ones at the Small Business Administration and even the U.S. Census Bureau. Your state and local commerce departments and Chambers of Commerce may have useful information, too. Use these resources to understand what you’re up against. You might also consider joining local, regional and national trade organizations and mine them for data you can use. With enough information, properly organized and indexed, you can gain a clear picture of which markets are underserved, which ones would fit well with your existing offerings, and how to tap customer desires that are just starting to emerge.
Remember, the data serves you, not the other way around. The most important thing to remember about targeting is that it’s an ongoing proposition. You don’t just do a one-off research project and file it away. The more you learn about your targets, the more you’ll want to know. Once you start developing a customer database, tweak the amount and type of data you collect. If it’s not useful, stop collecting it. If it leads to more questions about your targets (particularly the more complicated issues, like why they behave as they do), ask more detailed questions.
Put your data to work. A successful ongoing targeting project can yield information that guides many of your most important decisions. It becomes a proprietary resource you should consult before implementing any major change in your business. Thinking of opening an additional location? Check the competitive landscape first, to determine if the area isn’t already overserved and if it has enough likely prospects to support your venture. Thinking of dropping or adding products/services to your lineup? Check with your regular customers first to see how receptive they’d be, and why. Ready to refine your business model to serve an emerging niche? Review your target data to see if there’s appetite for the change. Thinking of raising or reducing prices? Check out what your competitors are charging—and how it affects that segment of their business. Thinking of refocusing your marketing budget? See where your customers/prospects get their information and what alternative media exist to help you target your marketing more effectively.
Targeting gives you insights to make better decisions for your business. For insights into innovative funding options, rely on our small business financial specialists. We’ll help you line up the resources you need to fuel sustained growth. Call 1-855-WHY-PANGO (1-855-949-7264).