It may seem a bit obvious, but targeted marketing is vital to ensuring that every pound you reserve for marketing is well-spent. Being able to identify exactly who is likely to buy your product, will help you to attract them. But it can be difficult for small businesses to effectively determine their target market.
Here Kurt Webber from BlancoLabels discusses how small businesses can determine their target customers.
Why targeted marketing matters: the research
Target marketing requires you to break down your entire market into unique segments — often by age, gender, education level, income, marital status or geographic location — so that you can specifically target the customers whose needs and wants most closely match your product or service. Savvy marketers implement this technique primarily to attract new customers, but it can also be used for other marketing goals, like increasing loyalty among existing customers and creating hype around a new product.
We all know that this is especially poignant in digital settings, and that online consumers prefer more tailored advertisements compared with broad and general ones. But it also matters in a physical landscape; designing shipping labels, brochures, product packaging and even business cards that speak to your audience can translate to big gains. Think of what you put out in the digital world as equally as important as the things you put out in the real world, especially when it comes to brand messaging and storytelling.
Here’s why it’s just as important: A recent study by Neilson showed that millennials and generation X consumers are more likely to seek out products that are labeled organic, GMO-free and hormone-free, but that older consumers pay less attention to this kind of wording. This speaks to the fact that different segments prefer different things, and that when you advertise to your core segment, that group is several times more likely to engage with your brand. Simply put, target marketing is good for your bottom line.
How SMBs can determine their target market
With all of this being said, identifying your target market can be costly. Small businesses have different budget considerations than large or well-established ones, which makes the process a bit more challenging. Still, it’s important to remember that even if you do have to put in some cash to pinpoint the right segment, there’s a good chance that it will have a pretty big return once you use what you know in your marketing strategy.
No matter the size of your business, it’s important that you don’t make assumptions about your target market in your strategy. While your hunches may be right — you know your customer better than anyone else, after all. However, there’s no substitute for good, old-fashioned research. Putting aside your premonitions and instincts will help you overcome confirmation bias, which will help avoid muddled data.
Leverage existing customers
Your loyal customers are key players in your quest for identifying the right target market. They’re already liable to have a positive view of your brand, they’ll likely help you figure things out. We recommend providing an incentive to your customers — a percent-off coupon, a free gift or free shipping, for example — in exchange for filling out a survey. You’ll be able to identify key demographics that your existing customers share in order to narrow down your target market.
Use digital tools
More than likely, you use big paid advertising tools to get the word out about your brand. Facebook, AdWords and other platforms often have built-in analytics tools that will help you discover who buys your product, how they buy it and when they buy it. eCommerce stores bring even more opportunity; platforms like Magento and Shopify can be customized with analytics plug-ins that store essential customer data and allow you to draw conclusions about your consumer.
Do some market research
Even though it seems like a waste of money, A/B testing and other forms of research prove fruitful. The process allows you to test variations of a product and identify how certain groups of people respond to each one. How does this help you narrow your target audience? It allows you to see which groups of people respond more favourably to your brand messaging. This can help you determine where you should funnel those vital marketing monies. For example, a brewery might show two iterations of beer bottle labels to a group of consumers to see which groups respond better to which design.
Put yourself in the customer’s shoes
We already mentioned that making assumptions can be detrimental to your target market studies, but using a little bit of empathy can go a really long way. Ask yourself what pain points or problems your product fixes, to determine who is most likely to benefit from it. Take it a few steps further by asking yourself what kind of person would pay for your product or service? What stage in life or the buyer’s journey they’re most likely to pull the trigger?
Engage online and off
Using social media, blogs and e-mail marketing, you can reach your existing customer base or potential customers and send out regular customer surveys, but you also want to make sure you’re getting to know your clients offline, too. Every time you get face-to-face time with a potential customer, whether at a trade show or in a brick-and-mortar store during a demo, make sure that you take the opportunity as a way to learn more about your audience. Ask questions, identify pain points and record the data every time.
The most important thing to note when entering the target market research phase is that you may have to spend a bit of money at the outset for things like market research and promotions, but at the end of the day, targeted marketing has the potential to bring back a huge return on investment. Start by using the tools you already pay for — digital analytics and your current customers, for example — before shelling out for outside help.