How to Identify Market Segments and Target Markets
Small business owners tend to think that the product or service they offer is so great that anyone and everyone can use it. While this thought-process may be true to some extent, it is impossible to market effectively to everyone. Instead, when you narrow down your focus to those who are most likely to buy from you, you can create marketing copy and content that speaks directly to them. This may have you asking yourself how to go about identifying these customers. Fortunately, there are some top ways to accomplish this.
Consider the Product or Service
Start by looking at your product or service from the point of view of your customers. Look at the characteristics that the top 10% of your customers share. Who are these people? What do they do for a living? Where do they live? Are they men, women, teenagers or children? Get specific on the types of people who are buying or most likely to buy. If you have an existing customer base, this is easier because you can look at existing data and buying behavior. If you are just starting out, you have to make some assumptions to get through this test.
Research the Competition
Look at the people your competitors serve as another avenue to get to know who your clients are. Glean information from the competitors’ websites, brochures and blog posts. Read the various content and information to get a handle on who the competitors’ copy is speaking. Going through this exercise may also help you identify groups or audiences that your competitors are not currently reaching, which opens up a door of opportunity for your business.
Existing demographic and geographic data can also paint a picture of your ideal customers. Demographic data includes age groups, interests, income levels, professions and more. Geographic data helps you determine where your customers live, work and play. All of this data plays a huge role in writing marketing messages that speak to those most likely to buy from your business. The U.S. Census Bureau and the Small Business Administration (SBA) are two primary sources of this information. Since the SBA categorizes this information by industry, it is relatively simple and easy to create an ideal client profile from this information.
You can also gather and analyze your own customer data by tracking response rates to marketing campaigns. Email marketing programs allow you to track individual campaigns-collecting data such as whom opens your emails, what links they click on, and who buys from the emails you send. In essence, you are producing your own marketing research data you can use to write marketing messages and campaigns, or tweak existing ones, for more effectiveness.
When you identify target markets, it narrows down the focus of your own marketing strategy and content. In this case, it enables you to focus on writing marketing copy to speak and influence the audience you are reaching out to, so you can increase your conversion rates.