Recognizing your target market and developing marketing and sales strategies aimed at them is essential. If you’re not doing this, you’re playing a game of darts blindfolded.
To serve as an illustration, let’s examine a company that failed to focus on their target market.
In 1996, McDonald’s created and began advertising the Arch Deluxe Burger. Advertised as ‘the burger with the grown up taste,’ it was intended for adult customers. In fact, many of the commercials flaunted that children were grossed out by the burger, or showed a McDonald’s chef ranting about the quality of the burgers ingredients. Good idea, right?
It flopped. Despite having spent more on the marketing of this product than any prior product, audiences old and young did not enjoy the ill-fated burger.
Marketers analyzing the catastrophe determined that McDonald’s inaccurately concluded what their customers wanted. The typical McDonald’s customer does not eat at McDonald’s for classy, adult food. They go there for cheap, convenient, and kid friendly food, none of which the Deluxe Arch Burger was.
McDonald’s attempted to extend their services beyond their target market, and customers were not receptive. By not understanding their target market, they lost money and alienated their customers.
What is a target market
OK, so target markets are important. But what exactly is a target market?
The Small Business Encyclopedia’s definition of a target market is “A specific group of consumers at which a company aims its products and services.”
Notice the use of the word specific. You may be tempted to think that eliminating potential customers by being too specific in who you are targeting is unwise. Why have a sandbox when you can go to the beach, right?
Wrong. Just like McDonald’s, no matter how good your products are, they will be best for a specific group of people. You are most likely to sell your products to this group of people, because it fits them. You don’t have to stretch who you are and what you offer to sell to them. It’s just right.
Now, this doesn’t mean you don’t sell to people outside of your target market. Rather, you don’t target those people.
Your sales pitches, advertisements, and website will be more effective when they are geared towards the people that need your products and services most. So learn who your target market is and go after them. This will increase your sales, focus your sales and marketing teams, and decrease unnecessary expenditures.
How to find your Target market
The best way to find your target market is to know your customer. We list 3 steps below to guide you on your way to establishing your target market.
1. Consider the problems that your service or product solves. Now, decide which type of people have these problems and find the commonalities among them.
You should always think about the problems that your solution solves, not only because customers want to know benefits instead of features, but also because it provides a profile for your ideal market. If your company does not solve a problem for a specific person, then that person is not going to be your customer, and you should not target them.
2. Examine your best clients and and find out what they have in common. Every business has customers that they LOVE. These customers love the product and your company. They recommend your company; they use the product frequently; they don’t cause issues for your customer service or technical support team; they are an easy sell; and they are fun to interact with because they love your product and company so much.
What do your favorite customers generally have in common? What are the similarities between them?
Are they all in their twenties? Do they live in Philadelphia? Is their favorite sports team the Eagles? When you get an idea of the similarities among your best customers, you can add those characteristics to your target market.
3. Study your worst clients and find out what they have in common. “They all hate our products and company” is not the right answer. Ask yourself, why do they hate them?
Let’s imagine that you sell diamond encrusted water bottles with solid gold caps. Two clients in the last month returned your product. They were both in their twenties and complained that the diamonds fell off the water bottle when they were working out and that the bottle was too expensive.
You now know that your water bottle is not ideal in situations where it could be damaged. It is best for gentle use, not for fitness enthusiasts.
Furthermore, you might assume that these two customers were not happy with the price of the bottle because of their age. Because, typically, younger people have a lower income bracket.
As a result, you eliminate fitness enthusiasts in their twenties from your target market, and you decide that your target market is wealthy individuals from the ages of forty to sixty, who would like a posh water bottle for the office, at home, or in the car.
After you’ve completed the three steps, sit down and write a profile for your target market. As an example, McDonald’s could state that their target market is middle class families with children between the ages of 2 and 12.
Now, you should have a working concept of your target market. Continue to develop and refine who your target market is throughout the lifetime of your business. You can never have too much information about your customer.
Gear your marketing efforts to your target market. Have your sales team pursue leads within this target market. And train your salespeople to initiate honest conversations with leads about whether or not your product or service will work for them. Taking these steps will help you acquire clients that LOVE your products, while not wasting time on leads that won’t purchase or who will be dissatisfied.
Awareness of your target market is vital. Don’t pull an Arch Deluxe Burger and lose vast amounts of money and resources by targeting customers that are disinclined to like your products. Target those who will love your products first. This will lead to business success.