We’ve said it before, and we’ll say it again: attempting to market to everyone is essentially the same as marketing to no one at all. With a variety of products and services flooding the market—and with a market that is vastly more accessible to consumers than ever before—establishing a target demographic is necessary if a company hopes to remain competitive.
Favorable ROI is almost exclusively dependent upon determining your target niche and communicating your product’s strengths to it effectively and efficiently. While the benefits to establishing your ideal demographic are numerous, the negative impact of ignoring it can also be detrimental to the growth of your business and overall bottom line.
Of companies who weren’t surpassing revenue expectations in 2015, 74% were not up to date on their MQLs (Market-quality Leads), SQLs (Sales-quality Leads), and other site visitor information. In addition, lead generation tends to pose a significant obstacle to success for 65% of marketing professionals, and 42% of those polled say that lack of quality information is the biggest contributor to that problem.
1. Why does it matter?
Establishing a target audience and using market segmentation has been proven to improve business standards in multiple areas:
· You will have more focused marketing, branding and distribution – Becoming familiar with your target customer almost forces you to redefine your image and sales tactics. A protein bar brand is not going to have the same packaging when marketing its product to yogis as it would when marketing to weight lifters, after all—one group tends to be female, eco- and calorie-conscious, while the other tends to be male and more inclined toward higher-calorie options. These factors will influence everything from recipe and production practices to package design. This can be excellent news for any company that has been seeking guidance in creating more effective branding.
· You will be more likely to keep customers – This is the first step in growing your market base long term. When your product is specifically geared toward one core group of individuals, your expertise in catering to that group grows exponentially. In addition, market segmentation allows you to further specialize your product, often to the tune of increased customer satisfaction throughout your customers’ advancing life stages. Using the protein bar example, a company targeting yoga practitioners could further segment its audience by making lines specifically formulated to benefit those who are aging or those who are pregnant/nursing.
· You will see an increase in sales – The natural result of the above two conditions is an increase in sales, of course. What many people don’t consider, however, when worrying about alienating certain demographics by targeting one specifically is that, by focusing on a specific type of customer, they create the opportunity to become a market leader for that consumer base (and, perhaps, to steal customers from their less specialized competitors).
2. How does it happen?
Target markets and target audiences don’t just pop out of thin air—they need to be researched and cultivated:
· Perform an analysis on your product – You can’t start to determine who will want to buy your product until you understand the purpose it serves and the wants and needs it satisfies. Sure, a shoe goes on your foot and protects it from damage, but what need does it alleviate? Is it an athletic shoe? Get more specific: Is it for runners? If so, is it a minimalist running shoe or a full-support model? Is it super-lightweight or is it more sturdy? Each step you take in establishing specificity will further inform the choices you make, helping you successfully answer the question: “What kind of person would want to buy this product?”
· Primary research – Most of your analysis is going to consist of focus groups, interviews, and online surveys/questionnaires. These data collection initiatives are essential not only in establishing an understanding of your ideal demographic, but also in creating a connection with your customer base. If you look at customer interactions as opportunities to learn more about them, you’ll naturally increase your concept of product specificity while endearing your consumers. Train employees in this regard: let them know that they should engage with customers as often as possible and try to work questions into the conversation about why they enjoy the product and what uses it serves for them.
· Secondary research – One of the best ways to begin your search for a target audience is to look at your competitors: What demographic does their branding speak to? What online forums do they communicate on? Who do you see going into and out of their stores and engaging on their social media? Of course, you won’t want to copy what they’re doing—you’re a unique brand with your own specialties and strengths—but this is a great first step in gathering information and formulating a plan. There are also copious amounts of free online resources for collecting comprehensive data regarding market demographics. When all else fails, remember: Google is your friend.
· Assess your existing customer base – If one group of people tends to love your product, there’s no reason why more like them shouldn’t as well. You can use online software or good old fashioned human interaction to record data on your existing customers, including the basics (age, sex, race, location, income, etc.) and more psychological factors (desire, lifestyle, life phase, etc.). Don’t be afraid to get super specific in assessing your clientele’s mental and emotional needs—as anyone who’s ever seen Mad Men or What Women Want knows, it’s smarter to sell to the heart than it is to sell to the head.
Note: Assume nothing – One of the biggest mistakes a business can make (beside failing to focus their marketing efforts at all) is to assume they know who their target demographic is without having done the research. Just because you are a woman in your 40’s who loves craft beer does not mean that every other woman in her 40’s also loves craft beer. The same logic can be applied across all product markets.
3. What’s the next step?
What tactics can you employ once you’ve established a strong understanding of your target demographic and taken steps to inform your branding and marketing using this new information?
Consider where you’ll market – If you’re a small business with a target audience that’s local, you’ll need to focus your energy on creating an amazing storefront, establishing a social media presence and making connections with other local businesses with whom you can engage in cross-promotional campaigns. A larger global business, however, will be running PPC campaigns and advertising on prime-time network television. Your target audience and your capabilities will determine not just how you market but also where and when you market your products. Consider all angles to determine a marketing strategy that acknowledges where and when your customer base is most prone to engage with your brand.
Get out into the community – Once you know who your people are, go interact with them! Nothing engenders trust and loyalty more than letting your customers know you’re just like them and care about the things they value. While you’re at it, this interaction will provide insight into the minds of your target demographic, allowing you to further specialize your products to suit their needs while establishing relationships that will last through your customers’ advancing life stages.
Consistently update your information – A dedicated businessperson’s work is never done. This is true even after you’ve done your homework and created a solid, target-audience-centered marketing campaign. As your demographic changes and grows, your product should change and grow with it. By staying engaged with your customers through the steps listed above, you’ll be well on your way to creating relationships that will inform your branding and marketing strategies for years to come. At the same time, you can’t always assume that a completely new breed of people won’t start buying into your brand every so often. For this reason, it’s essential that you’re always collecting consumer data and adjusting as necessary—don’t be afraid to ride that wave. You can enjoy the occasional shift in your messaging as long as it’s bringing your company increased prosperity as a result!
Need help defining your target audience or with your overall marketing strategy? Contact us today!