Did You Identify Your Target Markets Brilliantly?

Online Course: Lesson Four

Identifying your target markets is the next step for small business marketing success.

Let's start with this question... who can use your products or services?

Well... when most small businesses are asked this question, by FAR, the most common answer is "everybody!" But everybody is not a target market.

Oh sure, "everybody" likes the delicious pastries a bakery serves, and everybody in small business needs just about every one of the services we identified in Lesson One (Marketing Focus)... but (and you probably know what is coming now if you have been through the first lesson) – to market effectively, you really need to narrow "everybody" into something more specific.

Again, this may feel really limiting, but the following analogy really helps you understand why it is not limiting, but instead POWERFUL — not to mention CRITICAL!

Consider the light bulb. It throws off energy in a broad manner, illuminating everything around it. Most people don’t realize, however, that a laser works off the same energy that a light bulb does --- but with a tighter focus. Look what a laser can do that a light bulb can not! Most businesses are marketing to get their message out to anyone and everyone who could possibly use their services and products. They are expending their physical and financial resources like a light bulb. However, if they were to use the same energy like a laser -- with a narrow, predefined focus (a pre-defined segment of 'everybody'), the message would have much more power!

For example: assume an engineer is laid-off (I guess I could’ve said decides to change careers – but since this is a real example, I’ll just tell it like it was...) changes careers, and becomes an insurance agent.

Because everyone can use insurance, the new agent generically markets and "broadly-casts" his message to everybody using things like radio ads, newspaper ads, direct mail campaigns, websites, and local network meetings. Quickly, but after spending a small fortune on ads and memberships, direct mail lists, and web site designers, the engineer figures out that "broadly-casting" this marketing message is expensive and ineffective. Why? Because GENERIC MESSAGES FALL ON DEAF EARS!

In this instance, it is easy to comprehend how much more powerful the agent’s messages would be if they were targeted to, and focused on, engineers. Inside, the agent is an engineer. The agent knows what phrases engineers respond to, and what publications they read; what activities and groups are in, and what is important to them. Once focused, the marketing message would be FAR more effective than the generic "broadly-cast" messages. Now, again, this doesn’t mean the agent turns down business from those other than engineers – it simply means all marketing resources are focused on engineers.

Okay, so now that you see the light (pun intended, I couldn’t resist), the question is how do you determine what is your best target market?

Well in a perfect world, you would have lots of money and time to put into research and focus groups, and market studies. But this is reality, and chances are, you need to determine who your best target market is as quickly and as cheaply as possible. So, with that in mind, there are some questions that we were able to identify over the years, that really help identify what your best target market(s) should be.

1) End Consumer Target Market . What individuals could benefit from your products or services? ("Everybody" doesn't count!) Which of these individuals can easily be easily found in groups or organizations? Do they have expendable income? Are there a lot in your geographical regions? Is your competition targeting this group? Can you easily attain credibility with this group? Do you "speak their language?" Is it geographically feasible or profitable to service them? Will they be excellent references?

2. Referral Target Market What professions, groups, etc. would be excellent referral sources for your business? Of these, are there a lot of them in your geographic area? Will it be easy and relatively inexpensive to get your message to this group? Would they be interested in free services or products from your business (as a referral thank you?) Is there anything you can sell or provide for them that would increase their business also? Is their target market the same as your target marketing? Is your business convenient for the majority of their clients?

Recommended Actions:

After defining your target markets, document them in your Living Marketing Manual under the Messages tab.