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How do you identify your perfect target market

Sep 05, 2021


TRANSCRIPT:This is Stuart Webb. Breakthrough Growth Expert, author, founder and CEO of The Complete Approach with another of my one take vlogs, all the mistakes stay in.

So, let me explain how to do this using a lawn-cutting service as an example.

Let’s say they have two prime target markets—large lawns and small lawns.

The lazy way to do this is to combine both target markets. But this weakens the message significantly. What you need is two different ads—one for each target market…

Now, remember one of the golden rules of business growth is using multi-media across your Lead Generation, Conversion and Maximising Customer Value parts of THE FORMULA.

So, as an example, in addition to ads you’d also want to create other marketing such as a web page (landing page), sales letter and so on for each target market.

As a simple exercise, now we know who our target market is we can easily identify properties in the local area with large lawns, for example. We can easily get our hands on a local area map showing all properties and the amount of land each one has. Too much effort, I hear you say? Well, think about it, do the exercise once—and it’s done.

And you now have your target market identified perfectly. You can then mail (or even hand deliver) your sales letter to each home and because it’s written with the target market in mind (ones with large lawns) it will instantly connect with them.

You then set up a simple follow-up programme (say, once a month) to each household and within a short period of time—the business will be flourishing.

And remember that’s just for one target market.

Look, whether you like it or not, you have to be this detailed in your marketing. You have to put the effort in at the front end to get the rewards. But there is no other activity as important as this.

Here are my 7 key questions to help identify your ideal target market(s)…

  1. What do you do well and enjoy at the same time?

If you are offering a range of products/services, there may be one in particular which you do better than the others. If so, which types of customers could benefit most from it?

  1. Which product/service is the most profitable?

If you offer more than one product or service (you must!), there will be certain ones that are more profitable than others. Once you know the answer to this, you can then ask yourself which types of customers are these products/services most suitable for.

  1. Who are your best customers?

Do 20% of your customers generate 80% of your profits?

Find out who your best customers are. Analyse your database or accountancy software. What proportion of your profits do these top customers contribute? What product/service are they buying? Is there a commonality?

  1. Do your best customers have any similarities?

If you sell your product/service to other businesses, what are the similarities?

Look at the following indicators: 

  • Industry type 
  • Turnover 
  • Geographic location 
  • Number of employees 
  • The position or job title of the senior buyer for your services 
  • Number of offices or retail/ distribution outlets

If you sell your product to consumers, what are their similarities? Look at the following indicators:

  • Income or Joint income 
  • Geographic location 
  • Number of children 
  • Age 
  • Lifestyle habits and hobbies 
  • Employment type  
  • Their industry type 
  • What cars they drive

 

  1. What is the profitability of each customer?

This is a very important exercise for you to undertake. Look at all your customers and start analysing them in terms of profit. What you’ll find is the customer list can be broken down or segmented into 2-5 different profit categories. It makes sense to focus on the most lucrative groups. In some cases, you will realise some groups are costing you money. If that’s the case, you need to get rid—and quick!

  1. Does the business have any expertise relating to specific types of businesses or people?

You may find the business has expertise in one or more areas which benefit certain types of customers more than others. For example, the business may be a firm of chartered accountants, but ‘start-up businesses’ are the real area of expertise. In this instance, it would make sense to target new and start-up businesses.

Note About New Businesses

If your business is new, it won’t have any or many customers to base most of this information on. So, here’s what to do… Call at least 15 potential prospects in each different target market that you are thinking about. ‘Prospects’ can be friends, business colleagues or family – it doesn’t matter. Tell them you are ‘thinking’ of setting up a new business and you’d really like to ask them a few questions. Many people are only too happy to help. You must make it clear that you are not trying to sell them anything!

Now you can find out what they want. What’s missing from their current provider? What they like and dislike, etc. This approach should give you some great ideas for deciding which specific market(s) to focus on.

Now Answer The Following 8 Questions To Ensure You’ve Chosen The Right Markets Remember, you must ask this set of questions FOR EACH TARGET MARKET YOU’VE IDENTIFIED…

  • What are the main needs, wants, problems and frustrations of your target market? 
  • How does the product or service address each of these issues? 
  • Do they have the money to pay for your product? 
  • Will they pay a premium for a better product? 
  • Where are they? Can the business serve them successfully in these geographic areas? 
  • Are there many of them? How many in total? (Depending on the product or service sold, you will want to make sure there are enough customers to ensure your healthy existence!) 
  • Is competition in this segment weak? 
  • Does the business already have credibility with the target market(s)?

This isn’t essential but it will give you a head start. Those markets for which the business has relevant experience and credibility (Social Proof—testimonials, etc.) are of course your best and quickest options.

By answering ‘YES’ to the majority of these questions, you can be confident that your chosen target market(s) will be very lucrative for you. But don’t forget to tailor the message to each specific target market.