4 Points Identify Your Target Market- Part II

During our original discussion of “Identify your Target Market” we narrowed it to 4 main points:

1.  Become a specialist!  One of the first things you need to do is refine your product or service so you are NOT trying to be ‘all things to all people.’

2.  Next, you need to understand that Individuals and Businesses purchase products or services for different reasons. 

  • Individuals purchase products or services for three basic reasons:
    • To satisfy basic needs.
    • To solve problems.
    • To make themselves feel good
  • Businesses buy products or services for three additional reasons:
    • To increase revenue
    • To maintain the status quo
    • To decrease expenses.

3.  Once you have determined how your product or service fulfills the specific need of those in your target market, you can then laser-focus your marketing strategy.

4.  The next step in creating an effective marketing strategy zeroing in on your target market by way of Market Segmentation.

After reviewing the purchase motivations of the individual customer and the purchase motivation of businesses listed above you should be starting to visualize who you think your ‘ideal’ customer should be … or at least who you want it to be. Depending upon the nature of your business, (product or service), begin writing a description of this distinct customer.  Once that customer is clearly identified, you will be able to automatically screen everyone as to whether or not they are a potential customer.  This ability saves untold time and expense.

Based on the numbers you already have in your research, you even know approximately how many of those potential customers are in your area! Even subtracting the number of those you know are already loyal to some of the competitors, it is relatively simple to see who are available to be converted, or who have not yet purchased your product or service. 

Many times, of course, prospective customers don’t know about your company, or can’t tell the difference between your company and others. The good news is, once you know who fits into your defined criteria, you are able to ‘target’ that specific group.  Even if they are currently with the competition, you can help them understand the desirability of your product, or service, and its unique place in the marketplace.

As you become better established, you may decide that you would like to extend your target market outside of your local area. Going back to the basic reasons why people purchase goods or services, you will find new ways to channel your efforts toward your designated market.  Implementing the updated formula will make it possible for you to successfully continue capturing larger market shares.

On the other hand, if you ‘specialized’ your product or service but, following your local target market research, you discover that your actual market share is much less than first anticipated, what do you do? 

First of all, if the local target market customers will consistently spend enough on your product or service annually to keep you in the black, then you have nothing to fear.  While closely following your strategy plan, you will be able to increase your profitability as you are expanding your range of exposure.

BUT if that local market niche is only going to spend a minimum amount sporadically on your product or service – then you need to go ‘back to the drawing board’. 

Fortunately, as a result of your initial research and planning, you were able to discover this “short-fall” before investing too much time and money.  It is always disappointing to find it wasn’t the profitable niche you had anticipated, but the good news is, your research and fundamental planning will supply you with all the information needed to restructure your plan. 

When all of the pieces and parts are arranged to accommodate the needs of the customer, the result can be a thriving company.

Compliments of Lew West Business Consultants
www.lewwest.com   Blog – www.MyNext30.com