Defining Your Target Market
Great! You’ve decided to go out and grow your business. Now what? Well, let’s explore how you might go about positioning yourself to attract the right type of clients you want for your firm by carefully defining your target market.
First let’s answer the question – What is a market? A market:
- Is comprised of customers
- Has wants and needs which can be satisfied by your knowledge, products, and services
- Has the ability and the authority to pay
- Is willing to exchange money or credit for your services
Now let’s define your market or markets if you have more than one and find some “suspects” to target.
Depending on who you listen to, your starting point might be different. I’m going to share what I do and what I know to make this task easier for you.
- Review your existing client base first – unless you’re a start up, your existing client base may provide some clues on where you deliver the greatest impact. It’ll highlight where you may have a specialty or a strength you capitalise on in your messaging. As you review your existing client base ask yourself – “Who Do I enjoy working with? Which clients get the most value from what we do? Which clients are profitable and fit with our overall goals?” Equally ask yourself – “Who do we not enjoy working with? Who do we struggle to deliver real value for? Which clients are a pain in the a$%#?” Don’t target these clients for growth.
- Define the criteria you want to use to describe your ideal clients – this might seem obvious, but let me throw some questions at you to get you thinking about your criteria.
- Geography – Where do you conduct your business? Locally, regionally, nationally, internationally? Where would you like to target your activities to attract new clients?
- Services Needed / Provided / Consumed – which services and how many of them would your ideal client need or use?
- Benefits sought – what are the specific benefits your ideal clients are looking for. What are the specific challenges they are trying to solve?
- Usage rate – annual / quarterly / monthly / weekly / daily – How frequently does your ideal client engage with you or your services?
- Loyalty status – How loyal is your ideal client? What is the ideal lifetime client value?
- Readiness – How ready is your ideal client to proceed with engaging your services?
- Industry – Which industry or industries are ideal for your products and services?
- Business size – Revenue / number of staff / number of locations – What is the ideal size of your target clients?
- Purchasing criteria – quality / service / speed – What criteria do your ideal clients use to make purchase decisions?
- Business type – franchise / company / sole trader / partnerships
- Business life cycle – start up / early growth / mature / decline
- Cultural fit – How well do your ideal clients fit with your culture and way of doing things?
- Technology usage – What is the technology adoption profile your ideal clients?
- Size of potential market – how big is the potential market you are targeting?
- Payment type – How would you like your ideal clients to pay you? Upfront / upon completion / monthly installments / other frequency?
- Other factors – may be specific to a particular market or a qualification – e.g all targets must be family businesses. You might also consider some individual demographic factors – e.g. stage of life of business owners / interests / attitude
There are many factors you can use to define your target market. Don’t use so many that you end up with a potential market of one!
- Determine the nuances of your ideal market – in other words what are the specific characteristics of this market that you can use to better communicate with them? E.g. Language and terminology often become part of lore in an industry. You need to understand how your market communicates and the unique language they use so your message can be delivered with more impact. Appearance can also have an impact on your ability to build rapport.
- Now go out and find them. This is about building your list. Ideas and suggestions with a breakdown of costs / benefits will be covered as the topic for next time!
So over to you! Have a look at your existing clients and look for those that you enjoy doing business with and the ones you really do help with your services. Do you have experience in certain industries or with certain types of clients? This may be a clue on where to concentrate your focus and expand your influence.