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Target Market Analysis and your business

It has never been more important to know exactly who your target audience is and how to reach them. So how can you as a local business owner or operator start to utilise a targeting strategy for your business?

Firstly, let’s start with some foundational knowledge to help you in your quest to target the right people at the right time to make sales in your business.

Target Audience Definition

So what is a Target Audience (aka Target Market)?

It is the group of potential customers you need to focus your communication and advertising on as they are most likely to to buy your products or services. This group may share similar traits such as age, gender, physical location, interests, etc.

To begin to define your customer – think about the specific need or solution your product or service could possibly fill. Next, write down a list of possible groups of people or specific traits of people who share this as their pain point. Finally, begin to match up the solution your product/service addresses with the groups of people listed above. This is a great basic starting point to define your target audience.

Target Market Analysis Definition

Now we know what a target audience is, we need to understand how to use this knowledge for the benefit of our business. This is where a target market analysis comes in. 

A target market analysis is an assessment of how your product/service is positioned within your target audience and where you will get the most cut through leading to sales.

Through our target marketing strategies we explore two methods with business owners dependent on how comfortable an owner/operator is with business strategy and accessibility to data.

Method 1 – 5WH Approach

As it says on the packet, we explore the 5 x W’s (Who, What, Where, When, Why) and H (How) to perform target market segmentation and analyse the target market.

  • Who – See target audience definition above
  • What – Exploring the target audiences needs, wants and desires in relation to your products/services
  • Where – Understand where they are located geographically? Are you setup to complete transactions outside of your immediate service area?
  • When – What time of day, season or scenario is your target audience looking to purchase? Is the transaction quick or does it take a long time for a customer to consider? 
  • Why – Understanding why a customer has purchased from you or a competitor? Testimonials & Reviews, repeat customers surveys, customer satisfaction surveys are great to collate this data.
  • How – Look at the behavioral patterns of your customers. Review data from things like pre-sale (how many touch points between your business and customer in the lead up to sale?) and post sale (Do you have a lot of rectifications/returns? Are they satisfied? Do they refer your product/service to their friends?)

Method 2 – Custom Target Market Analysis

With some overlap to the 5WH Approach, the Custom Target Market Analysis takes things to the next level and is designed for businesses with larger datasets (often collated over a period of time).

  • Analysis of your product/service – Benchmarking what need was it solving at launch of business? Is it still solving the same needs? Has it changed?
  • Understand the market – Reviewing how many customers are out there in the primary market? Is there an established secondary market?
  • Create a customer profile – Is your customer avatar created and has this been communicated throughout your business?
  • Review against your competitors – Carry out a basic Strengths, Weaknesses, Opportunities, Threats (SWOT) analysis on your industry and competitors to identify a competitive edge.
target audience

The bottom line: You can’t be all things to all people.

Any business owner who suggests ‘their product/service is for everyone’ is starting a step behind competitors. Business is competitive. You need to create a targeting strategy to truly understand your target audience/target market to truly get the best return on investment for your time (seeking customers) and advertising budget (less cost per sale results in more money in your back pocket!).

Defining your audience and conducting a target market analysis could be the very thing to take you to the next level.