For example, if you sell anti-wrinkle cream, the people who are most likely to buy it are adults over age 40, possibly more women than men. So, your time and marketing dollars may be best spent on targeting women over 40. Or you could alternate your promotional campaigns between men and women, or target both groups at the same time.
To help you decide, you could take a survey of men and women over 40 to find out what percentage of each group uses anti-wrinkle cream or would consider buying it. You could also further segment your target market, as people over 40, women over 40, and men over 40 are still very large groups of people.
Another way to decide who to target is to consider both who has a high demand for what you want to offer and WHO YOU WANT to target.
For example, if you are a Financial Advisor, there are many demographics you could target, and some may have as much demand as the others; but, maybe you want to target a specific demographic because you tend to have a lot in common with those people and hence can easily have conversations with them, which leads to building the “know, like and trust” required to convert them into clients.
For example, if you play hockey regularly, the other players could be a demographic you choose to target. You wouldn’t even have to do much other than be yourself and when others ask what you do, you tell them, and it grows from there.
Or, maybe you want to target a certain demographic because you could make more money per new client, which would increase your overall income and bring you more lucrative referrals. When I was a financial advisor, 8 years ago, there was a manager in my office who targeted only doctors and dentists. There are a lot fewer doctors and dentists than individuals in other demographics, like parents of small children or business owners, so when considering demand in terms of the number of potential clients, the niche he chose has a lower demand for his services, but, he chose this strategy because he could make more per client, and thus didn’t have to work as hard as other advisors that targeted less wealthy individuals.
No matter which method you use to define your TM, it’s important to REFLECT and EVALUATE the progress of your business based on the TM you choose and other factors and determine if you want to CONTINUE to target that demographic or MAKE CHANGES.
For example, there are many demographics of home buyer and seller you could target if you are a Realtor, and maybe you start out your career helping primarily first-time homebuyers as you are a new homebuyer yourself. Then, over time you decide that people in your age group are starting to invest in rental properties, so you want to switch your focus to homeowners who want to invest in real estate.
Why define a target market? Why not target everyone who may have a need or desire for what you offer?
There are a limited number of hours in a day and dollars in the bank to promote your products or services and to serve clients, so it’s more cost effective and time and energy efficient to focus on one group or maybe 2 groups max.
How does your TM affect your business activities?
It affects two of the main ways you get clients.
- Advertising – Putting content out to the world and hope they come to you.
- Outreach – Passive and active – starting conversations with others. Examples: sending social media requests, personalized messages and emails; making phone calls, attending networking events, attending social events and asking people directly or being in the right places where others are likely to ask you what you do.
- IMAGES you include in your graphics
- WORDS you use to catch the reader’s attention and bring them closer to becoming your client.
- Advertising METHODS, e.g. Social media, search engine, mailouts, billboards, bus stop signs, appearance on morning TV shows, phone calls, door knocking, etc.
- LOCATIONS you target. E.g. if you are a massage therapist, you would want to target individuals and companies within a 15 minute radius from your clinic or your home, if that’s where you provide your services.
- Other factors
- In the case of the anti-wrinkle cream, you may want to join some social groups where there are a lot of women over age 40 (outreach) or attend many women’s only business networking events (outreach); and in your ads or posts uses images of women who look like they are over 40, putting on the cream, or a before and after pictures (advertising).
- In the case of the Financial Advisor above, you could join a golf and country club, yacht club, or expensive gym and get to know the members. They will inevitably ask what you do, so you would tell them in a casual way with no appearance of looking to sell to them. As they get to know, like and trust you, some may become your clients (outreach). You could also make visits to doctors and dentists office with a gift and a note, hoping to catch them then or hoping they will accept your phone call because you gave them a nice gift with a note (outreach). In your ads or social media posts, you could use images of health care professionals shaking the hand of a Financial Advisor who looks like you or something else to signify that you work with that demographic (advertising). Of course, the words would also indicate your TM.
Why is it so important for you to choose a target market, when the biggest companies in the world seem to target everyone?
- Big companies have deeper pockets than do you, which means more money for advertising and more staff for outreach.
- All of the biggest companies, including banks, fast food restaurants, grocery stores and retail giants do target specific demographics and modify who and how they target those demographics over time.
For example, TD bank, one of the 5 biggest banking chains in Canada can serve all demographics and they do. But, I came across this ad they put out a few years ago, that shows that they put out specific campaigns to segment the general public sometimes to attempt to achieve specific objectives.
In this ad, they are targeting engineers and geoscientists. This is a very niche market, but, these individuals tend to high a high net-worth and maybe a certain mindset that would respond well to TD’s offer of insurance. They may tend to buy larger insurance packages.
That is not all who TD targets though. They also run campaigns every once in a while, where they offer $300 free cash or another incentive for getting a TD credit card and using it in a specific way. This advertising may appeal to people with low to mid-level income who are always looking for a deal. These people may tend to use a lot of credit, but, not pay it off, so the bank can make lots of money off the interest they pay on their outstanding balances.
You can do the same thing and change your advertising every month, or you could target the same demographic at different ways throughout the year according to the seasons, holidays and other events that come up at different times.
For example, if you are a Financial Advisor living and licensed in Canada, you may want to start a promotional campaign for RRSP season for January and February, then in August and September focus on promoting RESPs, as parents are most thinking about their children’s schooling at that time.
There are endless examples of how successful businesses choose and target specific demographics in specific ways, but, now it’s time to examine your offerings and define or modify your target market, so you can start getting more clients.
TARGET MARKET CHARACTERISTICS:
Choose specific characteristics from at least 8 of the following categories to define your target market in terms of who is most likely to buy from you, then go back over the list and further define that by who you would prefer to work with. Note, that who you want to work with and who wants to work with you, HAVE TO MATCH in order for business to happen.
The following characteristics may or may not be relevant to your business. Choose what makes sense in terms of who you would directly reach out to or interact with most often and in the kind of advertising you would need to put out to attract those people.
- Age range – 14-17, 18-24, 25-30, 30’s, 40’s, 50’s 60-75, 76 to 80, over 80, or breakdown further
- Gender – Male, female, other
- Sexual orientation – Heterosexual, LGBTQ, LGBTQ sub-set
- Income level – Low, moderate, high
- Net worth – Negative (meaning more debt than assets), low, moderate, high
6. Occupational status – Student, retired, unemployed, stay at home parent, part-time employee, full-time employee, business owner, employee with a “side hustle” (i.e. you run your own business when you are not working at your employment position), or combination of more than one of these.
7. Occupational level of working people – Entry, assistant, general, supervisory, management, executive, or regulated professional, such as financial advisor, mortgage broker, accountant, real estate agent, nurse, RMT, dietician, doctor, social worker, etc.)
8. Occupational industry – Medical, para-medical, financial services, food and beverage, general labour, factory, construction, roofing, plumbing, electrical, other skilled trades, driving, education, logistics, IT, fitness, scientific research, engineering, politics, manufacturing, beauty, military, farming, arts, music, acting, government, etc.
9. Physical characteristics – Height; weight; body type; body size; eye colour; hair colour, texture and natural style; foot size; skin colour, etc.
10. Health conditions – Overweight, hypertension, mobility issues, insomnia, injuries, anxiety, other mental health conditions, other physical illness, average health, very healthy, etc.
11. Marital status – Single, married, common law, divorced, separated, widowed
12. Family size and age – No kids, 1 kid, 2 kids, 3+ kids, small kids, teen kids, young adult kids, grown adult kids, mixture of kids of different ages.
13. Education – Secondary only, college diploma or some college, bachelor’s degree, master’s degree, Ph.D, graduate degree, post-graduate certificate, professional certificate or license, trades license, field of study
14. Geography – Consider where you can and are willing to offer your products and/or services. For example, in clients’ homes or offices, coffee shops, online, at your physical store or office, at tradeshows and other events or more than one of these.
15. Interests, hobbies – Maybe you sell something that people with a certain interest use, like ski lessons, fishing gear or athletic apparel or maybe you spend a lot of time engaging in a certain leisure activity with others who have a need and/or desire for what you offer
16. Place of origin – Do you offer something, like food or a style of dress that appeals to people from a specific country; do you want to target people based on where they come from because you also came from that region and can hence relate to them well; or do you see a particular need from people who come from a specific country or region
17. Race – Does the product or service you provide specifically help people of a particular race? For example, there are some hair products and services that are designed specifically for people of African descent whose hair is different from all other races. Or do you want to target people of your own race if it is common for these people to support who they consider to be “their own?” For example, I know a Chinese rental property owner. Whenever she wants to rent out rooms in the house, get the lawn groomed, the house cleaned or get something fixed, she only uses professionals from the Chinese community
23. Home type – Live with parents, rent a room, rent an apartment, rent a house or other home, own a mobile home, own a house, own a condo to live in.
24. Real Estate – Rent your home, own your home, own second personal property, own residential investment property, own commercial investment property.
Now that you have a list of the people who are most likely to buy from you, you can further refine your target market definition if you want to focus on serving subsets of those people AND you believe that there is enough of a demand from them to support a profitable business.
*Read more of our articles to learn how to develop and implement effective promotional campaigns.
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18. Religion – Do you offer something specifically to people of a particular religion or do you practice a certain religion and can relate well to others due to those beliefs and/or due to spending time a lot of time with them at the religious celebrations and social functions you all attend
19. Language – Unless you want to hire bilingual or multi-lingual staff, you will want to target people who speak your language. If you speak more than one language, you could choose to target people who speak one of your languages or target both groups separately.
20. Hobbies – Do you provide products or services related to specific hobbies, like sports, fitness, travel, reading, writing, painting, drawing, motorcycles, gaming, fishing, playing musical instruments, etc.? Or do you engage in some of these activities and want to target the people you meet there because you can easily relate to them and have conversations with them due to your common hobbies
21. Interests – Health, fitness, current events, politics, art, coins, spirituality, getting rich, helping others (volunteering), live music, comedy, travel, wine, etc.
22. Venues – Do large portions of your target market tend to spend time at specific venues? For example, if you sell nutritional supplements and you want to target Personal Fitness Trainers who could easily recommend them to their clients, it would be wise to make in-person visits to gyms and personal training studios in your area to speak with the Trainers. If you are a psychotherapist, you may want to visit all of the local family physicians in your area to ask them if you could leave your brochures or business cards in their offices, or better speak with them about a referral relationship.