Why is it important to define the target market when preparing the marketing plan?

As a business advisor, I meet with many entrepreneurs who have a clear business concept but they lack a clear definition of their target market.

Many of my clients say that “everybody” is their target market. That statement is one of the most common mistakes new entrepreneurs make. Sticking to that thought will only lead to failed advertising, frustration and a botched product launch. The reality is that no product, no matter how popular or useful, will be liked by everybody.

So, how do you make sure that you are selling to the right people? You need to clearly define your target market. It’s important to note, you aren’t stopping others outside your target market from buying from you. Instead, you are choosing to focus most of your efforts on a group that represents your “ideal customer”. You can have a primary and secondary target market, just make sure that you define them well.

Still not convinced? Here are three reasons you should define your target market well:

Product Description

As a business owner, you need to tailor your product or service to your client’s needs.  But how do you know their needs if you don’t know (in detail) who they are? Once you understand your target market, you can identify the product features they want and shape your offering to those needs. To give an example, if you are offering a service, you need to define the number of hours included and clearly present what the result will be. Try to think of the problems your ideal customer faces. How does your product answer those problems?

Managing Expectations

If you know what your clients want and you know what your product or service delivers, you can clearly explain to customers what the result will be. You can effectively manage their expectations, which will have a two-fold effect on your business. First, you will discourage customers who have unrealistic expectations of what you are offering. Secondly, you’ll be left with a satisfied pool of customers who will likely come back for more.

Identifying Your Target Market

Understanding your target market makes advertising to them all the easier. You should know what magazines or newspapers they read, what entertainment they consume, what social media channels they use, and most importantly – what moves them to buy. Based on your findings, you’ll be able to tailor messages to them that will resonate and leave a memorable impact in a crowded space.

In our crowded media space, audiences don’t listen unless the message means something to them. Understanding your target market and pitching to them effectively has never been a more important skill for entrepreneurs.

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The importance of Choosing a Target Market

My friend Matt posted on Facebook: I just drove 4 hours round trip for a burrito. And I thought that must be a good burrito. And since the place he drove to was located only 5 minutes from my house, I went and bought one. And it was good maybe not 4 hours good, but REAL good.

When we got there, the small take out place was packed with college students. Good service, quick Mexican food made to order, good food, and decent prices. A perfect place for the area demographics (the college town of Amherst, MA) and clearly catering to their target market of the somewhat broke, busy, college kids in town.

So, what does a burrito have to do with selling more of your products or services? Well, I have lived in this town for two years and this was the first time I set foot in this restaurant, but the place is well known and thriving. One of the main reasons why is because they have a target market. They arent targeting me. I am a professional mom, not a college student. And generally, when I go out to eat, I prefer a calming experience with sit down dining, even if the prices are a bit higher. That doesn’t mean that if I come in they don’t sell to me, just like you might accept a client that is not in your target market if they are an ideal client for you.

Picking a target market means that you are making a decision on how to spend your limited resources of time and money within where you will market. If your target market is local college students, you will advertise on campus, in the campus newspaper, or on the campus website. If your target market is in a particular industry (for example, doctors), then you will focus your marketing in that industry. The more specific you can be the better. Instead of picking doctors, you may want to pick neurosurgeons. You may also want to determine if there is a geographic area that you are targeting. Choosing to target neurosurgeons in the UK may result in a different marketing plan than choosing to target neurosurgeons in New York.

Choosing the right target market for your business is a valuable key to your success. Here are three primary reasons that are revealed by Michael Port in his book aptly called Book Yourself Solid:

1. Having the right target market helps you determine where to find potential clients who are looking for what you have to offer. If you have a target market, you know where to concentrate your marketing efforts and what to offer that is compelling and well received. You know what associations to speak to, magazines and journals to write for, and influential people with whom to network—you know where your potential clients gather. Voila! You now know where to show up.
2. Virtually every target market already has some kind of network of communication established. For your marketing to work, your clients need to spread your messages for you. If they already have a network of communication set up, they can talk to each other about you and your marketing messages can travel that much faster. What are networks of communication?
3. Environments that are set up to help a group communicate — associations, social networking sites, clubs, various publications, events, and more.

And, finally, choosing a target market lets the people in that target market know that you’ve dedicated your life’s work to them. You will get to know everything about their wants, needs and compelling desires. And by showing up for them on a consistent basis, they will get to know you and love you because you will demonstrate that you understand them, which will be true. You will understand them as no one else will.

There are many ways to generate leads to more business. However, unless you take a moment to choose your target market, your leads will be scattered all over the place and you will find you are spending more money with a less financial return and less personal fulfillment. Pick your target market, for now, you can change it later. By understanding your target market, you’ll not only recognize a good lead, you’ll recognize your ideal client who will drive four hours or fly across the country just to work with you.

This article was inspired by insights derived from the Book Yourself Solid system. More tools can be found at Book Yourself Solid or here.

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