There’s a really good reason why everything you read about starting a business includes advice on clearly defining your target market. Just do a quick Google search on "target market," and you’ll get a whopping 551,000,000 results. That’s a lot of advice.
But even with all that information available, there are plenty of small-business owners who don’t heed it. I still hear “everyone is my target market" on a regular basis.
And that’s a big problem, because when everyone is your target market, no one is your target market.
Why You Should Narrow Your Focus
There’s a reason there are different airlines, car manufacturers, hotel chains, grocery stores, restaurants ... well, the list is practically endless. It's because not everyone is looking for the same thing. Just think about Apple and Microsoft: Both have die hard fans for their brands, and each caters to their own specific market.
But for some reason, when small-business owners decide to hang out their shingle, that common sense—that your small business couldn't possibly cater to everyone—seems to fly out the window.
For the most part, not defining your target market appears to be rooted in the fear that there won’t be enough customers to buy what your business has to sell, whether that’s physical products, services or information products. But that line of thinking is actually counterintuitive.
Having a huge universe of potential customers can cause you to waste a lot of time and money trying to cater to a whole bunch of people with different wants and needs. Will you make sales? Sure. But it means your bottom line will take a big hit with a very small return on your investment. If you don’t take the time to really focus on exactly who your market is, your chances for business failure increase because you'll spend way too much time, effort and money chasing the wrong leads. But if you narrow down exactly who your product or service will help, you can laser focus your marketing efforts to get a better return.
Defining Your Target Market
If you haven’t defined your target market yet, take the time to do it now. There are plenty of free online tools that can help you. For example, you could start with this Google search for "target market worksheet," and choose one of the worksheets to help you define your target market properly.
One of the ways I like to think about defining your target market is the process we go through when we’ve decided we need a new car. We start narrowing down what we like and don’t like about certain models and what features will fit best with our lifestyle. That causes us to eliminate some models entirely until we’ve pretty much focused on our top three models. Our awareness is heightened, and we start checking out cars more closely than normal during our day-to-day activities. Once we get to that point, in fact, we start seeing them everywhere we go. They were there before, but we never noticed because we weren’t focused on what we wanted.
That’s what will happen in your business, too. If you can pin down the characteristics of your true target market—their likes and dislikes, gender, age, income and lifestyle choices—you’ll start seeing them everywhere and will be able to pick them out of the entire universe of prospects. When you get to that point, you’ll be able to refine your marketing plan and related marketing materials to cater to that specific group, giving you a better chance of having the right people buying your products or services and improving your bottom line.
In addition to increased cash flow, one of the really great benefits of having your market properly defined is the opportunity for other people to send business your way. What’s the first thing you do when you're looking for a new product or service? You probably check in with friends and colleagues to see what they know. And if those friends and colleagues know exactly who your business serves, they can refer just the right prospects to you.
Taking Actions Steps
So here’s what you need to do right now:
- Take a look at the product or service that sells the best in your business, and dig into the characteristics of the people who buy it. If you have the opportunity to ask them why they bought that product or service or have time to conduct a brief survey, that will give you a lot of insight.
- Take the information you learn, and apply it across your business to every single thing you sell. Make adjustments to your products or services as needed to fit your target market. That may mean totally discontinuing something you love, but that’s OK. Your goal is to give your target market exactly what they're looking for.
Making changes to your products and services to ensure they truly serve the market you intended to attract will mean the difference between having a business with mediocre sales and one that makes the cash register sing.
What would you add to this advice? Do you have an experience you can share? Please share your thoughts in the comments below.
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