Everybody talks about target markets and taking aim, but not everybody does it. Target marketing is the only effective way to optimize marketing resources.
Target marketing is a better use of resources
Your marketing budget is going to be most effective when it reaches your selected target market. When we look at the big picture and sort through the marketing jargon, the benefit of target marketing is simple—efficiency. Solid target marketing is a method to more efficiently reach your customers. Target marketing is a better use of your most valuable resources, i.e. time and money, to generate additional revenue. It is as straightforward as that. Now, let’s talk more about how to get there.
Your goal is to get to know as much information as you can about your existing or prospective customers. The more you know about your customers, the better you will be able to make decisions that will enhance your ability to communicate and connect with them.
Who do you consider will benefit the most from your products and services? Think of the people and their most common characteristics and attributes. One of the best ways to identify your target market is to look at your existing customer base. Who are your ideal clients? What do they have in common? If you do not have an existing customer base, or if you are targeting a completely new audience, speculate on who they might be, based on their needs and the benefits they will receive. Investigate competitors or similar businesses in other markets to gain insight.
Four ways to identify target markets
Use these four category areas as you collect information to identify and define your target market:
- Geographics: The location, size of the area, density, and climate zone of your customers.
- Demographics: The age, gender, income, family composition and size, occupation, and education of your customers.
- Psychographics: The general personality, behavior, life-style, rate of use, repetition of need, benefits sought, and loyalty characteristics of your customers.
- Behaviors: The needs they seek to fulfill, the level of knowledge, information sources, attitude, use or response to a product of your customers.
Focus on benefits
One of the marketing fundamentals is focusing on benefits. This perspective is critical to target marketing. Pay close attention to the needs section of the market behaviors. Establishing an intimate understanding about the needs of your target market is critical. How will your customer profit or otherwise gain from using your products or services? Meeting this need is one of the most convincing points for sales to be made, cash to flow, and profits to result.
You must seek to quantify the value of offering a solution to this need. You may be able to do this by asking these questions about your products and services:
- How much can it save your customer?
- How much can it earn for your customer?
- What intangible benefits might customers realize, and is it possible to quantify these benefits?
What is your customer really buying? People purchase products and services to realize one or more of the following benefits:
- To save:
- To increase:
- Personal relationships
- To reduce:
- To improve:
- Peace of mind
The target market profile
The target market process allows us to break down these groups of people so we can better understand how to reach them. One way to do this is to create a target market profile. Here is an example of a target market profile:
- Lives within the ZIP codes 97401, 97402 and 97405.
- Between the ages of 21-35.
- At least one child.
- Condominium or home owner.
- Education experiences beyond high school.
- Earning a combined annual family income of $50,000 or greater.
- Values time and considers it their single most limited resource.
- Excited about accepting and using innovative ideas and products.
- Consistent Web users. Prefer the Internet over magazines and newspapers for information they trust.
- Increasing resources invested into safety and security issues.
- Beginning to plan for their future.
- They are leaders in product selection and respond to the opinions of the “industry experts” when making purchase decisions.
- This group will first look to the Internet to acquire this information.
- They defend these decisions under most any circumstance and will adamantly “sell” those that ask why they use the product or service and why they made the choice they did.
- This group can be a powerful, unpaid sales force resulting from the referral network they build and use.
The more detail you know about your “ideal” customers and clients, the better you will be able to make them aware of your products and services, and how to purchase them through you.
Target marketing allows you to reach, create awareness in, and ultimately influence, that group of people most likely to select your products and services as a solution to their needs, while using fewer resources and generating greater returns.
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