I have observed that there are many small business owners who do not have a clear understanding of what type of customers they should be targeting. This is especially true of business owners who never did take the time to develop a business plan.
Many owners are just pretty much “targeting” anyone they can get. They are trying to sell to everyone and getting little response. This is a waste of time, effort and money.
If you own a business and can accurately and thoroughly describe the customers you are targeting, you will be more successful marketing to them and can better satisfy their needs once they become your customers.
You should be able to describe your customers using characteristics they have in common. These characteristics must be specific and relevant to the purchase decision.
Typically, business owners describe their customers in terms of age, gender, ethnic group, income level, etc. But do not forget other characteristics may be relevant such as level of education, owning or renting their residence, occupation and marital status.
There may be lifestyle characteristics you can define such as hobbies, entertainment choices, websites visited and organizational membership. There may be behavioral attributes such as buying patterns, price sensitivity and self-perception.
If you are targeting businesses instead of consumers, you may be looking at type of industry, number of employees, number of years in business, sales level, business style, business philosophy, growth stage, etc.
Remember, you should tailor this analysis to your type of business and define characteristics that are relevant to your potential customers’ purchase decision.
You should also be able to realistically define your targeted geographic area. Be as specific as possible. Depending on your business, this could be a neighborhood, zip code, city, county, etc.
When defining your area, consider whether or not you will able to effectively serve the customers in that large an area. Do not spread yourself too thin.
Being able to describe your target market and your targeted area is a good start, but you must also consider the size of your target market and how that relates to potential sales and profitability.
You may find that your problem is there are not enough consumers or businesses that fit your target market’s description in the geographic area you are targeting. If this is true, you may have to modify your business model and implement new strategies.
Even if there are enough potential customers in the area you are targeting, you must be able to affordably and effectively reach them with your message. By effectively I mean your message is communicated to them in such a way that they clearly see how buying your product will benefit them and are motivated to buy from you instead of from your competitors.
There may be a big enough “pie” available out there, but can you truly compete and carve out a big enough piece of the pie for yourself to keep your business profitable?
Your local Small Business Development Center can assist you with defining your target market, researching your market, and developing a marketing plan for effectively reaching your potential customers.
Connie Edwards is a Business Consultant for The University of Georgia Small Business Development Center in Savannah. Contact her at 912-651-3200.
Edwards, Connie (2012, April 4). To increase sales, know your target market. Business in Savannah.