How to define your target market
Defining your target market will help you choose who you want to serve, know who your best customers are and organize your efforts to win more of them.
“You pay your sales team to knock on doors,” says BDC Senior Business Advisor Mallika Kazim, “so you want to make sure they’re the right doors.”
Kazim recommends these three steps to define and reach your ideal target market.
1. Know who you’re serving today
Theoretically, companies develop a business plan and identify target customers before going to market. But the real world doesn’t usually work that way.
“Most people put out a product and see who buys it,” says Kazim. “It’s usually organic. So most businesses are already up and running when they decide to get clearer about the customers they want to serve.”
Kazim says this is actually good news, because it means you already have some information about your customers and their behaviours. If you have a storefront, for example, you may have daily regulars, occasional repeat customers and random drop-ins.
“Ask yourself which customers are best for your business,” Kazim suggests. “Is there a certain kind you want more of? Or less of? Is there a customer you’d like that you’re not getting today?”
2. Understand what makes them tick
Once you have a sense of the kinds of customers you’re serving—or want to serve—gather more information about who they are and what they need.
This can include purchasing behaviours, demographics, social values, media consumption habits and more. Your experience with existing customers will give you some of this information. So will your sales and customer services employees.
“Frontline staff interact regularly with customers and know them well,” Kazim explains. “They have a good idea of who is buying your product or service, whether they come in with their family or alone, or how long they spend in the store. Any of that can be useful.”
She also says talking to your customers directly, conducting customer surveys and watching what they say on social media are all good ways to gain insights.
3. Choose a focus
Focusing on specific segments of your total potential market lets you increase the returns on your marketing efforts. Instead of what Kazim calls a “spray-and-pray” approach that aims to capture every possible prospect, you can tailor your messaging more thoughtfully to resonate with a specific type of client.
“When you’re not a big brand like Nike or Apple, you can’t possibly be everything to everyone,” Kazim says. “I usually tell business owners to target one or two types of customers at a time. It doesn’t mean you ignore all the other ones. It just means you concentrate your marketing time, money and effort on reaching those specific priority groups.”
Those priority groups may not necessarily be your largest customers or those who spend the most. They should be customers whose habits and preferences align best with what your business delivers.
“What you want is alignment between your brand, company and potential target market,” Kazim says. “Customers who believe in your brand will come back time and again, and endorse your product and company to others. Those are your VIPs.”
Kazim says that while defining a target market is often mostly about increasing sales, it also helps reinforce your reputation and image—what you want your business to be about in your community.
“The great thing about defining your target market well is that it brings everything into alignment,” Kazim concludes. “The people your marketing is reaching out to are the same people sales is talking to. It all becomes very integrated and everyone is on the same page.”