“Understand why you are different and how you help, recognize your target market, and give them something they might not even realize they need.” Steve Jobs
Topics: Testing, Who buy? Over-estimating, Network, searching for Customers, Revenue Model, Competitors, Expanding.
The better you understand your customer, the faster your business will grow. But new ventures often struggle to define their Target Market and set their sights too broadly. We often over-estimate the market size, and in many cases there may not be one at all. Here are 10 questions that can help you determine whether you have a target market and what it is:
1. Test who will “buy” from me? You can gain valuable demographics by releasing the product in a Test phase and letting potential consumers speak with their $$$. This will refine both your Target Market & your Pricing strategy, to know who to go after and why.
2. Who would “pay” for my Product or Service? First, try to understand the “problem” that your product or service can solve. Then, use that information to help determine who would be willing to pay for a “solution”. Not only do your potential customers need to have the problem, but they need to be “aware” they have the problem. (ie, use Google’s keyword tool to see how many people are searching for words related to your business idea).
3. Am I making assumptions about the Target Market based on my personal knowledge & experience or more realistic data? Your own personal experience & knowledge can make you believe that you understand your Target Market – even before you conduct any research. Don’t assume that you can think like your target market. You have to “ask them” and talk to them to really understand them.
4. Am I over-estimating my Market? Or should I narrow my niche? It’s easy to assume that most people will need your service or product. But rather than make assumptions, reach out to groups of potential customers to get a more realistic picture of your audience and narrow your marketing efforts. You can: 1) ask your Network, 2) conduct surveys in your Target Market area, or 3) post an article in the target market Media to determine interest. Don’t get over passionate about your idea until you have defined your Target Market – so you can be realistic.
5. What does my Network think? As you try to understand your target market, it may be challenging — and expensive — to seek feedback from potential consumers through surveys, focus groups and other means. But you can tap into your networks to get “free” feedback. Many people in your extended network will likely be willing to take the time to give you in-depth opinions & advice.
6. How will I find my Customers? As you start defining your target customers, try to determine whether you can efficiently market to them. You’ll need to do some Market Research and study your “target” audience’s demographic, geographic & purchasing patterns. (ie, if you’re selling from a website, you need to learn about your prospective customers’ online behavior) Understanding how to find your customers early on, can help you establish a game plan once you start building a marketing strategy.
7. How will I sell my product or service? Your retailing strategy can help determine your target market. What’s the best channel for your product or service? Will you have a store, a website or both? Will you be marketing only in your local area, home state or country or globally? An online-only business may have a younger customer than one with stores. A brick-and-mortar business may narrow your target market to people in the local area.
8.What’s my Revenue model? Figuring out how you’ll obtain revenue from your product, can help you find your target market. Social ventures can be particularly tricky, because without a specific plan for getting revenue it’s easy to over-estimate the size of the customer base. But if you’re revenue model is simply selling a product online, it can be easier to figure out a “target” customer.
9. How did my Competitors get started? Evaluating the competition’s marketing strategy can help you define your own target customer. Don’t simply copy the marketing approach of your biggest competitors once you define your Target Market. You must have a way of “differentiating” what you are doing, from what your competition offers.
10. Is there room to expand my Target Market? Be prepared to re-define your target market or to expand it over time. For example, figuring out whether you’re targeting a domestic consumer or customers throughout the world can be a good start. As the power of mobile mapping has grown in the last decade, we’ve seen the number of target markets grow.
Target Market Quotes
“Vertical search engines that match your business, service or products with a Target Market offer you a higher conversion rate than traditional search engines. They have already qualified your Customer’s interest – by coming to a search engine with a specific focus. Searchers will be more receptive to targeted advertising.” Author, VC & Entrepreneur: Marc Ostrofsky
“Target Marketing is about connecting with Customers in a very meaning way – meeting their needs” CEO, Sales Force SW
“Find your ideal Target Market and give them exactly what the want. You’ll get fans who share their enthusiasm for a product they really like and your product could go “viral” by word-of-mouth”. Zuck
“Your research on Target Market is amazing if is knowing what’s important to people, and if they’re ready to take a chance on it.” Elon Musk, Tesla
Comments: Do you know any other ways to determine a Target Market?
from Entrepreneur.com 15 Apr 13 enhanced by Peter/CXO Wiz4biz