One of the most important things to prepare for in starting a business is knowing who to sell to. As an entrepreneur, it’s critical to have a clear picture of your ideal customer for your business. Sure, every single one who buys your product or service isn’t exactly the same (after all, how boring would that be!), but you should develop a solid strategic plan of action to market and sell your products and services to those who will benefit most.
Having sufficient information about your chosen market not only helps you shape your product offerings, but also allows you to provide those buyers with unparalleled experiences through fantastic customer service. This is because you will also have a better understanding of what types of approaches work for them.
Creating and understanding your target market involves more than making assumptions. Instead, it’s about trying to figure out its needs and motivations. Demographics including age, gender, education level, occupation/job, and family situation can help you determine what your customers need and what they’re willing to spend.
Remember that people can fall into more than a single demographic category meaning that some of the information about them may be inconsistent. But, what are some things that will help you determine your target market better? Here are some of them:
Analyze What You Sell
One of the ways to analyze the product/service you are selling is by doing it manually. Write out a list of all the features available for your product or service. Next to each feature, list the benefits that consumers can experience directly from using it and also what their ultimate goals are when using the feature (e.g. higher sales, lower costs, etc.).
For example, a graphic designer offers high-quality design services. The consumer benefit is an improved company brand image and ultimately the goal is to increase sales by being seen as a credible business. So ultimately, the benefit of a high-quality design is gaining more customers and making more money. You can apply the same process to what your business offers.
Try Market Segmentation
Market segmentation is the process by which you begin to subdivide an entire market into smaller, more manageable parts. You can group your market based on various categories of factors. You can do this by looking at the demographics (age, gender, education level, etc.) and psychographics (personality type, values behavior).
Demographics describe basic characteristics like age, gender, education level, ethnic background, and marital and family status while psychographics provides a deeper look into who people really are by their behaviors, values, personalities, and lifestyles. This could also be known as the “why” of the purchase decision – this is your primary ingredient when conducting a full analysis of the people who will be purchasing your products.
It can be hard to avoid assumptions – and it’s especially easy if you seek out confirmation. You might actually be searching for, recalling, and interpreting data in a way that confirms something you already believe or suspect is true about your target market and audience. This is called confirmation bias. This could ruin any attempt at clearly defining your target market and audience – which could spell disaster for your business in the end.
Research is like reading a map, but testing is checking your GPS coordinates. No matter how many people have said they would be interested in what you have to offer, you won’t know until you put it to the test. Even if consumers say they would buy, who’s to say whether or not they’re actually ready to part with their money for your products? The bottom line is that a prospective market doesn’t always work out – only real-time results can prove otherwise.
Everything you do in your business depends on knowing who your customers are and what they want. Focusing on the wrong people can make it near-impossible to grow your customer base, especially if you’re making assumptions about just who those people are.
Everyone has their own unique tastes and interests, however, which means that while some companies will appeal to broad groups of different kinds of people, others will be focused on specific kinds of customers. Once you’re certain who your market is, work out how best to communicate with them effectively as well as how you can show that you understand their specific needs and desires. Their goals will become yours.