In order to best serve your customer’s needs, you have to understand who they are. Understanding the basics of a target market and knowing the difference between target market and target audience is a crucial step in developing a strong customer base. Having a strong customer base will allow you to streamline your marketing resources and create memorable experiences for your customers. In addition, having a clearly identified target market for your business will help your team develop a marketing strategy that focuses on individuals who are more likely to purchase your products or invest in your services. Analyzing these customers and segmenting your target market into focused buyer personas will also be advantageous in ensuring your marketing efforts are fruitful.

Below are some tips to help you define your target market.

How to identify your target market

Identifying your target market can be a tedious task because it’s not as simple as grouping your future clients into a box based on demographics (age, gender, location) or psychographics (personality, values, lifestyle). This process calls for an in-depth review of your current customer base, your services, the products you offer, and the strengths of your business.

1. Analyze the problems you solve

The greatest strength of your business is the product or service you offer because it solves the customer’s needs. Understanding how and who you are helping and analyzing this information is important. Once you have identified the problems your business solves, list them out for reference. It is imperative that you understand the customer from their perspective versus relying on your judgment of what you believe your customers prefer. When identifying your target market, be cognizant of any personal or employee biases.

Asking the following questions will help ensure you omit any biased opinions. If possible, having customers answer these themselves will remove any guesswork.

• Who will most likely benefit from my product/service?

• Who is currently purchasing my product/service?

• What makes my product stand out compared to my competitors?

• What needs does my product solve? Why do my customers need it?

2. Conduct a thorough market research

Understanding your market is more than doing basic research. It calls for a comprehensive collection of current trends, the marketplace and additional factors such as likes, dislikes, familiarity with social media, values and lifestyle. Using Google Analytics, Google Trends and other tools can help you understand the position of your business in comparison to similar industry businesses and other local companies. Additionally, your research can provide feedback to improve ratings, sales performance, digital presence, customer reviews and more.

Don't forget that your past and current customers should be looped in as well — utilize surveys and focus groups to gather honest feedback from them and add it to your research.

3. Understand your competitors

Understanding your competitors will allow you to evaluate and identify your competitive landscape. To evaluate your competitive landscape, you’ll want to conduct research on competitors within the same industry, evaluating their services, products, customer base, pricing, marketing and more. Your research will help your team compare and contrast the services offered by other competitors that could hinder you from reaching potential customers.

4. Create customer profiles

Creating a buyer persona is an additional step to defining a target market. It is a detailed outline that includes traits and behaviors such as demographics, psychographics, influences, opinions and challenges.

Utilizing this data will allow you to organize target customers and current customers. Building a customer profile will allow you to determine your ideal client and further assist with the development of effective marketing strategies.

5. Evaluate

Once you’ve collected this information, it is important that your team evaluate the findings to better understand and build out your company’s target market. Sharing your target market analysis across all company departments will help provide consistency and clarity, in addition to further aligning any potential collaboration between groups (e.g., sales and marketing).

These findings can also help you to determine any underserved populations or niche markets, develop an optimal pricing strategy or curate marketing campaigns to help reach and retain ideal customers.

There is some time and effort that is needed to properly identify your target market. However, taking these steps will only help you and your company further develop and build successful relationships with your customers.

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Need additional assistance? At HCG, we work with businesses to help them identify their primary audiences. Using deep industry knowledge, we assess, advise and develop crucial high-level strategies and a comprehensive plan that helps you achieve your desired organizational goals. Schedule a 30-minute consultation with us today.