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Analyze Your Target Market

Discover How to Analyze Your Target Market and Focus on Your Best Customers


Okay, so you've looked at your competitors, and now it's time to launch your brand-new product or service, right?

Wrong.

You need to know who your target market is before you bring your super cool product or service to new ones. Which PERSON would REALLY want to buy what you're selling? 

This is where analyzing your target market comes in handy.

I'm going to show you how to study your audience in this piece. It will be easier to make marketing and sales efforts if you know who you're trying to reach.

What is Target Market Analysis?

Target market research is a thorough and organized look at the people who might buy from your business. It includes their demographics, goals, struggles, and anything else that makes them unique and ideal for your product or service.

What is a Target Audience?

A target market, also called a target crowd, is a group of people who are very likely to buy your goods or services.

You shouldn't use the "spray and pray" method of marketing if you know who you're trying to reach. You won't just sell to anyone that comes across your path and hope they respond.

Because you know who you're selling to, your marketing will be very targeted.

4 Benefits of Target Market Analysis

Why should you bother about target market analysis?

There are many reasons but I will give you the four supreme ones:

1. Target market analysis helps you sharpen your marketing communications.

Figuring out who your business is for can help you with your marketing and where you put it in the market. Your messages become clearer and more in line with each other. People are more likely to respond positively to words that are this clear.

2. Target audience analysis ensures your pitches resonate with potential customers.

People can relate to marketing efforts that are very specific. Because these personalized texts really hit home with prospects. People are more likely to buy your service or product after reading them.

3. Target market analysis saves your brand money.

A business, no matter how big, can only spend so much on marketing. When a business knows its audience, it doesn't just throw money at everything. They are careful about how they spend their money. They only give limited resources to the people they want to reach, which saves you money.

4. Target audience analysis improves customer management.

It's easy to give people what they want once you know who they are and what they want. You handle all of your contacts with customers better. This makes your business happy. People who are pleased with your business will buy more and stick with it longer.

How to Define and Analyze Your Target Audience in 6 Simple Steps

Now that you know the benefits of understanding your target consumers, let’s dive into specific steps you must take to identify and assess your target market.

1. Conduct Market Research

Do market study to find people who are interested in what you sell and learn more about them.

I'll go over a few things again because I already talked about market study in Chapter 3.

  • Market research is fundamental to business success so you must spend significant time on it.
  • In your research, you must get very specific about the target market you want to serve.
  • Find out who your competitors are targeting so you can identify related groups they are neglecting and serve them.
  • Which alternative offers can you make to your target market to cover the gap missed by the competition?
  • Identify who exactly your customers are and pinpoint the problems they are grappling with.
  • Pin down your ideal customer’s biggest pain points your product or service must solve.
  • Research the psychological triggers that push your target customers to buy products similar to yours.
  • Get to know where the bulk of your ideal buyers gather online and offline.

In summary, target market analysis gives your marketing a bullseye to aim at.

2. Analyze Your Product or Service

You thought about someone when you made your goods or service, right?

Think back to when you first started thinking about starting your own business. That's who you want to reach. A business doesn't just appear out of nowhere. You were driven and moved by a strong desire to make a product or service. Think about what made you want to start your own business.

This is what you should ask yourself:

  • Which specific group of people were you desperate to help?
  • Whose problems did you want to solve from the onset?
  • Who would find your product appealing?

By asking these questions, you can cut down the groups of people you might want to sell to.

You can do one more thing.

Do a useful activity that will help you focus on your goal. Make a list of all the good things about your service or product. Find a group of possible customers who can gain the most from each benefit.

3. Dissect Your Current Customers

Your current customers can help you figure out who your ideal customers are and how to best reach them with your advertising.

There is no buyer in this case, though.

Find your best customers in your customer group to help you find your target market. So, the question is, "best in what way?"

That is a good question.

Your best customers are:

  • Move through the stages of the buyer journey fast so you don’t waste marketing resources.
  • Buy from you repeatedly which gives you a steady stream of income.
  • Gladly pay your prices with little or no haggling.
  • Stick with your brand for a long time, which boosts your lifetime customer value (LCV).
  • Give suggestions on how you can improve your product or service.
  • Love bragging about your brand on social media i.e. they are brand ambassadors.
  • Buy your higher-priced offers more than the cheaper offerings.

Do a target market audit with these people to get the most out of them.

Use the methods I talked about in the part on market research, such as polls, interviews, questionnaires, focus groups, and surveys. We're not going to hurt them.

What do you ask them, though?

  • How and where did you hear about our company? You get to know the traffic source and the best content asset you can use to reach the target market.
  • What do you love most about our product or service? This helps you identify the product benefits that appeal to your target market so you push them more.
  • What are your favorite social media channels? Knowing their favorite channel tells you where to get more prospects with similar characteristics and the channels your brand must focus on.
  • What made you buy our product or service? This reveals your product’s star features/benefits you can highlight in your sales and marketing copy.
  • Which websites do you go to for information? Knowing your target market’s favorite online watering holes will help you know where to fish for your ideal customers.
  • Did you learn about it via a free or paid channel? This info will show you where you should channel most of your lead generation financial resources. Also, you will get hints on how to improve the lagging channel.

Make a detailed customer or buyer image for your business once you know what your best customers are like and then use it to find more prospects who are like them.

More people will buy from you because you did all the work ahead of time.

4. Dig into Demographics and Psychographics

Looking at their demographic information is another way to get to know people who might become buyers. In case you were asking, demographics are the basic traits of a person that are shown by population statistics.

These traits include the following:

  • Age
  • Gender
  • Race
  • Marital status
  • Number of children
  • Occupation
  • Annual income level
  • Education level
  • Religion
  • Homeowners

These kinds of facts are very important for getting to know your target audience. The U.S. Census Bureau website has this information. To really understand your target group, you need more than just demographic information. You need psychographics.

There are facts about people that tell you who they are and what they do. Psychographics, on the other hand, shows why someone does what they do. What makes them act that way? These psychological traits are more in-depth than demographic traits.

These are some psychographic factors:

  • Beliefs
  • Values
  • Interests
  • Attitudes
  • Lifestyle
  • Personality type
  • Social class

Psychographic factors are very important in marketing. They give you a better understanding of your target group. You can use quick, surface-level facts to help you market, but deep emotional issues and ideals are better at changing people's behavior.

Psychographics and demographics work well together.

Together, the two parts work great together. They can help you learn more about your ideal customers and increase the chances of your business succeeding.

5. Create Market Segments and Customer Profiles

Enter

  • Demographic Segmentation: categorizing customers using their external traits.
  • Psychographic Segmentation: grouping customers using their internal traits.
  • Behavioral Segmentation: dividing customers according to their behavior patterns.
  • Geographic Segmentation: dividing your market according to buyers’ geographic location.
  • Firmographic Segmentation: grouping companies according to certain attributes they share.

Since we’ve already covered demographics and psychographics, let's unpack the remaining three segmentation types.

Behavioral Segmentation

Behavioral segmentation looks at customers’ purchase behavior.

It covers the following:

  • Benefits Sought

Which prime product benefits do they desire the most? You can then focus on highlighting these in upcoming campaigns to hike conversions.

  • User Status

Who uses the product frequently, occasionally, or doesn’t use it at all?

You can then dig deeper into the shared characteristics of each group and tailor your marketing strategy to each one.

  • Occasions

On which occasions does your customer base prefer to purchase your products? With occasion segmentation intel at your disposal, you can craft product promos around the occasion.

  • Buyer Journey

How long do typical consumers spend on their buyer journey? Use this research to optimize your process so they go through faster?

Geographic Segmentation

The next step is regional segmentation.

As I already said, this is putting people into groups based on where they live. The traits of people who live in the same place are similar.

Grouping people by geography is a simple but effective way to get into new markets.

This shows how regional segmentation works.

  • City
  • State
  • Country
  • Region
  • Population density
  • Zip Code
  • Neighborhoods

People with similar needs, wants, and hobbies make up each group. The area you want to break into can be studied, and your ads can be tailored to meet the needs of that area. If you're selling to a lot of different areas, you should keep in mind that people in different places have different wants and needs.

Firmographic Segmentation

Finally, let's talk about firmographic segmentation.

Firmographics is the study of demographics for businesses.

If you own a small business that sells to other businesses, this is the best way to divide your customers into groups. With firmographic segmentation, a business sorts possibilities into groups based on their funding, size, and scale.

You can use these factors to group businesses in order to find the right one to target:

  • Industry, e.g. AI in healthcare, accounting, and bookkeeping, biotechnology, etc.
  • The number of employees they have.
  • Ownership legal status (private, public, or government-owned entity?)
  • Company size.
  • Financial standing and size of their income.
  • Average sales cycle.
  • Years in business.
  • Location of stores, offices, warehouses, or manufacturing plants.
  • Market size and how large their clientele is.

Where can I find information about firms?

You can get information from a lot of places.

The first place you can look for information is in trade magazines. There are top magazines in every field that are full of the newest information and trends. Federal and state government websites are another easy way to get information online. You could always do a survey to get first-hand information about your target market and B2B rivals.

Once you know what kind of grouping you want to use, move on to the next step.

For each group of customers, make a buyer character. Get your team to remember your characters by giving them names like Techy Terry, Fussy Fiona, Advocacy Andy, Foodie Philip, and so on. This will make the whole thing more fun.

This is an example of a buyer character for a coffee shop that wants to attract college students.

With such a detailed persona, marketing becomes a breeze. The brand's chances of success skyrocket.

6. Find Out Who Buys From Your Competitors

Last but not least, you can stalk your competitors to learn valuable information about your ideal customers.

Look over these critical points:

  • Positioning

Pay attention to how they present themselves to attract clients. What makes them different from other companies in the same market? What age or gender group do they want to win over? Which type of customer does their market placement leave out? Can you meet their needs?

  • Pricing

Find out how they set their prices. Who do they want to sell to? Is it wealthy buyers who care about price or people on a tight budget? For instance, if they focus on high-end goods, you can make cheaper versions for the groups that are tight on cash.

  • Social Networks Pages

If you follow them on social media, you can listen in on the talks they have with their fans. What do people like to buy? Is there a trait that everyone wants? Make a note of what they dislike so you don't include it in your products or marketing.

  • Customer Reviews

Online reviews and recommendations are great ways to find out about your target market. Read online reviews of your rivals to find out what your target market loves and hates so you can better target them.

It's all about knowing what your ideal customers want and need.

If you look for any flaw in the way your competitors serve customers, you could make similar goods that fill those needs. By looking at your competitors' customers, you can tell if the market you want to go after is already full. After that, you can turn around and look for a market that is hungry.

Target Market Analysis Toolbox

To perform your target analysis job well, you need the right tools.

Without access to the right tools, your best intentions will fail. Here’s your target market analysis toolbox with everything you need to do a splendid job.

1. Google Analytics

Understand the makeup of your audience: demographics, age/gender, product-purchase interests, industry, and potential/actual target location.

2. CRM Platforms

Customer Relationship Management platforms store your customer base info: contact info, contract size, purchasing data, demographic data, and more.

3. Similar Web

Deep market insights into your market, including sales and shopper intelligence, traffic sources, audience interests, and competitors.

4. Social Media Platform Analytics

Get fresh data about your target market from native analytics features on Facebook, Instagram, LinkedIn, or wherever your audience frequents.

5. Quantcast

Get live insights into your audience purchase behaviors, browsing interests, domain affinity, occupations, devices, and more.

6. United States Census Bureau

Gain access to info about a particular population group: city and state, age, ethnicity, education, income, housing, and more.

7. Pew Research Center

Get revealing data about social and demographic trends, global attitudes, and internet usage.

Be sure to grab these tools and similar ones that will help you dig up all that you can about your target market.

Target Market Analysis: A Vital Step To Business Success

These are the best tools and tips I know of for analyzing your target market.

Target analysis findings are very important if you want to build a business that does amazingly well.

This tool helps you organize your marketing tasks, pick the best options, and get the most out of all your marketing efforts.

Do keep in mind, though, that communities grow and change. 

Target market research is always changing, so it never ends.

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