Finding Your Target Customers
Every new business is full of promise, including the promise of rich rewards for the business owner and the promise of quality products or services delivered to its customers. However, promises will be empty without an enormous amount of due diligence up front. A crucial example is finding your target customers, even before you open your doors for business. Identifying specifically who that target customer is requires careful, thoughtful, and detailed description.
To identify your ideal target audience, it’s important to conduct market research looking at the size of the market and the demographics, unique traits, and trends that support the demand for your products or services. To get a complete idea of the market you want to serve, you need to ask yourself:
- What is the geographic area of the market you wish to serve?
- What is the median income within your chosen geography?
- Is the market already saturated with the same product or service?
- What is a fair and reasonable price point?
These last two questions can be answered by being open to feedback from test markets or surveys prior to a full product launch.  The answers to each of these questions will give you a good picture of how narrow your market segment is and help solidify your sales projections.
Another important point to understand is that your business’ product or service, and your marketing, should be developed with your primary target customer in mind. Your primary target customer may not be the end consumer of your product or service. For example, some pharmaceutical companies do not view doctors and patients as their prime customers. Instead, they consider research scientists in labs to be their target audience. For more information about choosing the right primary customer and the pitfalls of failing to do so, check out this article from Harvard Business Review.
Once you’ve identified the foregoing, you need to review a competitive analysis to identify your competitive advantage in the market. To determine what your market advantage may be, look at your business’ potential strengths and weaknesses and what your window of opportunity is for going to market. You should also be aware of how important your target customers are to competitors, potential barriers into the market, and who your indirect competitors are, as they may also have a negative impact on your success.  Profitable businesses rarely ignore the importance of spending time and money on market research, reviewing the known and gathered data.
Once you identify who your ideal clients are, you need to build a strategy to get their attention. This starts with your own marketing persona, more commonly known as your brand image. Every company or product, or service provider has their own unique image. Clients and customers identify what you do with who you are as it relates to what you offer to them. Take your time to think through your business brand to give it a better chance of having a lasting and positive presence. Ask yourself what you think of when you think of Nike, FedEx, or your banking institution. Each one of these entities has a definitive marketing persona, because they have deliberately created how they want to be perceived by their target audience.
After you have determined what your own brand image and persona is and how you want that perceived by your customers, the next step is to build a strategy to reach them. This area of marketing includes a vast number of options. The key is to decide which venues best suit how you expect to reach your potential customers. Are you opening a restaurant? Is it a restaurant that offers takeout and delivery? If so, sending out menus to households and offices in your local area is one way way to target your audience. But what if your business is custom-made clothing or you are a seasoned attorney who has just left a large law firm and you have opened your own local practice? In either of these cases, joining the local Chamber of Commerce is a good start to finding new customers. For the tailor, advertising on social media with images taken of your work would be a start. For the attorney, joining professional networking organizations would likely create some traction. However, when you build your strategy to reach new customers, consistency is important. If you choose mailers, social media postings, or membership to professional organizations, you must make sure to demonstrate repeat activity so your target customers will notice that you are open for business.
For continued success and adaptability in a changing market, you need to give attention to your business model. That means that you have looked at the value of your products or services and have placed a price on them. This goes back to the demographics you want to target, because customers will look at the face value of your products or services and decide if what you are offering is worth their investment. If so, smooth delivery of your product or service may be the start of developing lasting customer relationships.
A smart business owner is one who keeps an eye on the competition, too. If there is a high demand for your products or services in your area or among your customers, or both (in case your customers are regional or national), you need to make sure that you find opportunities to stay ahead of the competition. One way to do that is to look at your competitors’ websites and see what they are offering. Maybe they are offering specials or loyalty points, or they have a service component that is more efficient. Learning something from a competitor can be a benefit when it fits into your own business model.
Finding your target customers takes a lot of due diligence, planning, and effort, but it is always valuable time well spent. For more information about finding your target customers, please reach out to a Cambridge Savings Bank business banker today. For additional small business resources, please visit the SBA Market Research Resources.