How do I find a target market for my business?
You will learn
- How an innovation curve works
- Where your product or service fits into a market
- Where a focus group can help
Being able to find a target market is especially important for business owners just starting out but even established businesses should continually assess who their target is and whether they are delivering the right product or service to meet their needs. After all: no customers means no business.
In the case of a new business, identification of a target market can be difficult if you have developed a new product or service that is genuinely new; and really it then becomes about creating a need. 50 years ago, who knew that we “needed” a mobile phone. 30 years ago, who knew that we “needed” access to the internet 24/7. The need was created by identifying who would adopt the technology and then looking at the reasons why (motivators).
There is a well-established way to look at target markets, The Rogers Innovation Adoption Curve.
Innovators are often viewed as people who are brave – they embrace change and are at the forefront of new things.
Early Adopters are opinion leaders – they will try new ideas but in a cautious way but this group also have influence.
The Early Majority are influenced by the Early Adopters and accept change more quickly than the average person.
The Late Majority are only comfortable with a new idea or product when it is mainstream.
Laggards are traditionalists caring for the “old ways”.
With a genuinely new product or service you are going to be looking for a group of people who are your “innovators” initially.
One of the key questions to ask yourself is “what problem do I solve (with my product or service)? Once you know what the problems are you can start to understand who is likely to have these problems – and where they might be.
Then think about who has these problems and try to group people together so you can build up a picture of these potential customers. Try to describe them in as many relevant ways as possible. This can and should include behaviourial traits. It is easier to influence people if you understand their behavior and not just if they are male or female and earn £X and are classified as a socio-economic group B.
From the groups you have created try to evaluate which group would benefit the most from adopting your product or service. It is important to think about the cost of not adopting your product or service and whether that is greater than the cost of your solution.
Once you have a picture of who is likely to purchase it is always worth either undertaking some research by holding a focus group to validate your theory.
Your focus group should be made up of people who fit your assumed target market and you can show them your product/service and ask for their feedback and level of interest. Focus groups can be run by business owners, marketing professionals or specialist agencies. If possible record/video the focus group to ensure that facial expressions as well as words are captured; and do prepare your questions in advance.
The information gathered in your focus group session will help you refine the picture of your target audience plus possibly highlight the language they use to describe the usage and challenges that they believe it will help them overcome. This will assist in developing appropriate and influencial marketing messages.
By being as specific as possible about your target market you will reduce wasted marketing spend and improve your return on investment.