Businesses are created to help someone do something. Usually, that something involves achieving a goal or solving a pain or problem.
Who has that particular goal or problem you can help with? That is the best way to choose a target market.
Why Pick a Target Market?
To succeed in business, you can’t be all things to all people. It’s just as important to define who you don’t want to work with – as who you do.
While it might be difficult to say “no,” consider this.
Certain types of clients will value what you do above and beyond other clients. Those clients place a premium on the added value you provide and the long-term relationship you build.
They are looking for a partner to grow their business or enhance their personal life – not simply a vendor who will quietly complete the task with minimal interaction.
I’m sure you’ve worked with unprofitable clients. Perhaps you’ve also had the misfortune of working with “bad” clients – those who didn’t pay on time (or ever), requested unreasonable amounts of your time, nitpicked, or were never happy.
On the other hand, there were those delightful to work with, who provided interesting project work, who sought your input, trusted your expertise, and paid on time without question. They also may have referred business to you.
Having more of the latter type of client and less of the former is not only good business – but good for your sanity.
How To Choose a Target Market in 5 Steps
When you pick a target market, you become laser-focused on reaching only the people who would be a good client for your business. When you get your target audience right, you will find you can work less hours for higher fees because they value the work you do enough to pay a premium for it. Here are 5 steps for choosing a profitable target market.
Step 1: Narrow Your Options
When you try to target “anyone who might need my service,” you are essentially talking to no one.
If you don’t have a clue who wants and can pay for your services, where would you find them? How would you identify them if you were talking to them? Your marketing is unfocused and your “strategy” involves “hoping and praying” someone will see your ad, message or website and call you. This is a colossal waste of money. Instead, consider:
- Who are your current ideal clients? If you have clients, this task involves analyzing your current client base to determine who your most profitable clients are. Which hire you for repeat business? Which refer business? Which do you love working with? Once you’ve identified a few, chat with them about:
- why did they hired you?
- what you did that others didn’t?
- what you could do to serve them better?
- what problems they face in their industry that don’t have solutions?
- what is their most pressing problem?
- Who do you want to work with? When you provide services, what you offer will, on some level, be based on your individual preferences, strengths, talents and experience. Be honest about:
- what type of work do you want to do?
- what problems do you solve particularly well?
- who do you like working with?
- Talk with prospects – If you don’t have a current client base, talk with prospects or people in your network who you’d consider working with. These can be informal lunches where you pick their brain or you can offer pro-bono service like a free consulting session or initial project work. Look for common problems that come up.
- What problems do they face?
- What language do they use to describe their problem?
- How skilled are you at providing a solution to that problem?
Step 2: Segment Your Market
Once you have an idea for the types of prospects you would like to work with and which potential problems you can solve, narrow it down further by looking for common characteristics. Market segmentation involves breaking a large pool of people down into smaller, similar groups. You can do this by:
- Demographics – These are the basic facts about your prospect such as their age, gender, education, income, job type, and marital status. How a 22-year-old fresh out of college and looking for an entry level job looks at the world is different from a newly retired 65-year-old business executive.
- Psychographics – Psychographics are more about the character, personality or worldview of the individual. For instance, are they optimistic or pessimistic? Do they take control over their life or are they a victim? Are they open- or closed-minded? Where does their sense of self-esteem come from?
- Goals/Needs/Frustrations – Which groups of people share similar goals or frustrations? Which urgently want to take action to achieve that goal or solve that problem in the near future? Look for the common characteristics of those who want a solution and are willing to pay.
Step 3: Learn About Problems and Unmet Needs
A profitable business uncovers a market’s unmet needs and offers a solution. What do your prospects search for? Online research can be a fast, easy and free way to uncover problems and unmet needs quickly. Here are a few places to look.
- Browse forums – Google “[your industry] + forum” to find places online where your prospects may gather to talk. What common issues arise? How do they describe these issues? What do they want most? You may be able to find this out by reading through forum threads, but also consider registering and joining the conversation to learn more.
- Visit Q&A sites – Quora.com and Yahoo! Answers are two platforms where users ask any and every question they can think of. Browsing these websites can give you considerable insight into how your prospects think. I highly recommend signing up for Quora and starting to participate.
- Find related books – Check out the book selection for your industry on Amazon.com. You should be able to preview the table of contents plus a sample of most books. If you have a Kindle and are willing to spend a few extra bucks, buy the Kindle edition and browse the “Popular Highlights” in each book to see what others have highlighted. Read reviews to determine what readers both liked and disliked about the book.
- Read industry blogs – What are the most popular blogs in your industry? What topics do they regularly cover? What do commenters say?
Once you’ve compiled a list of key problems, start talking with prospects and clients one-on-one, asking them about these issues you’ve uncovered.
Step 4: How Can You Find Your Target Market?
One key purpose of identifying a target audience is to make it easier to find them. If you have no clue where to find them, your market is too broad.
- What media do they consume? Every key industry has publications, websites, mailing lists centered around the key issues, opportunities and trends your prospects are facing. How can you get in front of them – either with advertising or editorial content? Can you write an article? Be interviewed? Speak?
- How do competitors reach prospects? Keep a file with all your competitors’ advertising, brochures, key website content, articles, white papers, and other content for reference.
- How do prospects make buying decisions? Who makes the decision? When are they likely to make it? What triggers a prospect’s decision to look for solutions? Do they experience a key life cycle or business change? Look for media that targets these specific people or buying triggers.
Step 5: Describe Your Target Market
Once you’ve uncovered the key problems your target market faces, write up a brief paragraph that describes your ideal clients in terms that are easy to communicate. An ideal client is that “one” perfect client. If you know someone that fits that description, think of this person as you do this exercise.
Set aside 20 minutes to answer these four questions. Then, get yourself a timer. For each question below, allot 5 minutes and just write whatever comes to mind. It doesn’t have to be in complete sentences, just get the gist down in bullet point format. Don’t think about it. Don’t edit yourself. Don’t read back over what you wrote. Just write as fast as you can until the timer goes off.
- How would you describe your ideal client?
- What is the key goal your client wants to achieve or key problem to solve?
- What pain points, worries, or objections does your ideal client have?
- Why are you the best person to offer?
When you are finished, you should have a good idea of what types of clients you want to attract. While you may never work with someone who fits this description exactly, it will help you visualize and clarify those people you want to do business with.