The first answer usually scares me the most. If a business owner thinks that everyone could be (or should be) their customer it’s a sure sign of lack of direction. The second answer is just vague and not very useful.
What I’m really looking for when I ask that question is: have they thought through their target market to identify buyer personas?
My background is B2B marketing. I work with manufacturers to identify opportunities for revenue growth, so yes, “companies” is a market, but not all types of companies fit the mold. In the B2B world businesses are doing business with other businesses. but it’s the people behind those businesses that you really want to reach. If a business wants to grow its revenue, knowing its exact target market is essential.
Why is knowing your target audience so important?
There are two reasons: The first is that if you identify your target market or your buyer personas correctly, you will save yourself time and money in the long run as your efforts will be more focused and effective. Second, if you truly understand your target narket you will know what motivates them to want to do business with you and what your value proposition is to them.
Find out the answers to the following
In order to understand your target market, ask yourself:
- Who are they – demographics, behavior patterns
- Where do they spend their time?
- What are they looking for – motivation, answers, product, service
- What does success look like to them? (what is their end goal?)
- What problems can your company solve for them (what are their shared pain points?)
The first question often takes the longest to answer. I recommend doing some extensive research here. Don’t guess and don’t assume. Survey your current customers, survey your sales team, customer service team, and reach out to prospects. It’s important to really get this right. If you assume your target market is women over 40, married, with above average income and conservative, and if you’re wrong and your target market is actually women under 30 who are of average to low average income and liberal, you could completely miss the mark and create products that will struggle to bring in the revenue expected and potentially waste dollars spent marketing to the wrong audience. It would be like trying to sell me nuts and bolts. I know what they are but I’m not very mechanically inclined. There’s no reason I couldn’t buy nuts and bolts but in reality, I’m not going to buy them. If I need one, I ask my husband to get me one. Or better yet, I’d probably take whatever needed a nut and bolt to someone else to repair.
Additional information to gather to determine target market
Once you have a basis for who your target market is, take this a step further so that you can also establish the right communication tools to enage with them.
- How do they learn about new information for their job/industry?
- What publications or blogs do they read?
- What associations and social networks do they belong to?
- What are their shopping preferences, how do they buy your product?
Keep in mind, your target market may be divided into multiple buyer personas; as many times it should be. You might have 5 different profiles, all with different opportunities and motivations. Keep track of these and understand how they each play a role in your business as a potential customer or current customer.
Examples of identifying buyer personas and target markets
West Marine is a nationwide retailer. They have done an excellent job of identifying their target market. They have a number of different persona profiles, one being “Trailer Tom”. West Marine knows how Trailer Tom uses marine products and which products he uses. The company has a very detailed profile of him: He’s married, has kids, and brings his boat to the lake each weekend, etc. So when West Marine develops or markets their products, they can clearly determine if that product fits one of their buyer personas (a.k.a. “Trailer Tom”). If it does, they can reasonably predict the products likelihood of success.
Tommy Bahama is high-end men’s clothing manufacturer. The company created a clear definition of their buyer persona by thoroughly creating who Tommy Bahama was, down to what he drinks (Red Stripe) and the cigars he smokes (Rocky Patel). The company’s focus shows in the success of their business. The clothing looks and appeals directly and efficiently to their target market.
Everything you do needs to be tied to a core understanding of your customer profiles or buyer personas, your product development, branding, how you speak to your market, how you market, how you sell, your logo, your emails, website, and even in your hiring.
Focus your efforts in the segment of your market where you are more likely to succeed and speak to your Target Market from a position of knowledge.