When entrepreneurs tell me about their business, I like to ask this question- not because they’re usually wrong and that feeds my egomania (ok, that’s a small part of it), but because it’s really, really important.
Now, I can give you a pass if you’re just getting started and trying to formulate an idea of your target market. But if you’ve been in business for a year or two or ten and can’t answer this question, it’s a huge red flag. Here are some of the responses I hear:
- “It’s pretty diverse, from college kids to retirees and families” (so… everyone)
- “Kind of the lunch and dinner crowd” (People who consume food)
- “People who are looking for things to do this weekend” (Just about everyone)
You know what I almost never hear in response?
“I don’t know”
The fact that entrepreneurs always come up with an answer- no matter how bad- tells me that they know how important it is to define their target market, but they don’t actually do it. Why?
First of all, it’s a little difficult. You have to make some assumptions about who your target market is, and then test that hypothesis, and then go back to the drawing board or tweak your assumptions. This takes time and energy, and can be frustrating when you don’t see quick results.
Second, it’s terrifying to define a narrow target audience. If I only sell to high-salaried, middle-aged men with motorcycles, I’m excluding a lot of people- middle-aged men who don’t have motorcycles. Women who have motorcycles. Low paid men who have motorcycles. Retirees who have a motorcycle but can’t ride it.
I don’t know about you, but I hate feeling excluded. And that’s exactly what we have to do to everyone outside of our target audience. So it brings us to a bit of a conundrum with our definition of marketing:
“Improving lives by helping others make better decisions”
How does excluding people improve their lives when it feels so bad to be excluded?
Where does making money come in to all of this?
There are a few things to explain:
- If we’re doing our job right as marketers, people make the right decision themselves to exclude themselves from a product or service that doesn’t match their needs. We all know people that don’t shop at Wal-Mart. And they don’t feel bad- in fact, it’s a point of pride for them. This happens somewhat naturally, but it’s important to be aware of- sometimes what we perceive as negative is actually positive.
- As marketers it is our moral obligation to provide value to our target audience. This reinforces the decision they made, builds trust, and (eventually) puts dollars in your pocket.
- For every person you exclude, there is another company out there that can provide them with better value. Connecting these people to those companies is a way to provide value to them. They will tell their friends how you well you treated them, and some of those friends probably are in your target audience.
- Serving a few people extremely well is better than serving everyone poorly. Do you want to be the DMV, or Zappos? https://www.ted.com/talks/david_logan_on_tribal_leadership
At this point, you might have come up with a few companies that, at first glance, serve everyone- like… Zappos?
“We refer to her as the happy hunter. She is 25 to 49 years old and has a median household income of $75,000-plus. She is most likely well-educated and married with kids. We are still developing what the sub-segments of that very broad audience looks like.”
Zappos’ “very broad”, “still-being-developed” target audience is 100x more specific than most business’ target audiences- and you can bet that they’re constantly testing, questioning, and reassessing their target market.
Ok, so, you want to get more specific with defining your target audience. How?
There are a few things you can do. Who are your competitors? Who are their clients? Talk with some of your current or potential clients and find out what they really want. What’s on their mind at night? What’s overwhelming them? How can you improve their lives? Ultimately, defining your target audience requires a deep understanding of that audience, and it requires a great deal of empathy and perception to understand what your product or service will spark in their behavior. Talking with your potential target audience, testing your ideas, and dedicating time to work on this problem is the way to move ahead of 90% of your competitors and begin the process of defining your target market.
Tell me in the comments below: do you have an idea of who your target market is? If not, what’s your plan? What’s the most difficult part about defining your target market?