The first rule of marketing – know who you are targeting.
Without this information, you might as well be firing arrows willy nilly into the air.
The biggest marketing mistake we often see businesses making is thinking that everyone is their potential customer, and they’re wrong. That’s just wasting money. You really have to focus.
What good is it to put all your effort into promoting your business if you’re not targeting the right people?
Why Is Identifying A Target Market Important?
Knowing your target market is important because it allows you to focus your marketing efforts on the right people. This means that you can create messaging and content that appeals to them specifically, which can lead to more conversions and sales. When you dig deeper, you can better understand what motivates them and how to reach them.
How Do You Identify Your Target Audience?
The fastest and easiest way to know who your best potential customers are is to know who your existing best customers are.
Who Spends The Most, Who Spends Most Frequently?
The place to start is your POS or loyalty program customer list based on sales. If that isn’t available, then sit down with a pen and paper and think about those people you see in your business most often and make a list of them. Your memory and guesses aren’t as good as hard-core data, but its a great start.
Businesses who use Royalty Rewards® build a very detailed customers list. It is the backbone of all the marketing we do for them. Once the list becomes a certain size, we offer segmentation that is re-calculated quarterly as the members in various segments and their spending habits are always changing. It looks like the example below. When you click on the number of households you get a detailed list of customers.
Once you have a list of your best customers, what can you discern about them? Here’s some questions you can ask yourself (or your staff) to help you identify the commonalities.
What Kind Of Customers Are They?
As you answer these questions you may find a variety of customer types, but keep in mind you want to think on a macro level – you are looking for large pockets of similar people.
What Do They Buy From You?
- for a restaurant this might be catering, dine in, take out, special events
- for an auto repair shop this might be oil changes, body work, seasonal tire changes, fleet vehicles
Where Do They Live and Work?
Most businesses have a geographic range of customers that is within 3-5 miles, depending on your specialization. If you have a data driven list, you can map out your customers by their zip codes. There are sites such as www.easymapmaker.com or www.showmymap.com that allow you to upload a list.
- Do they live nearby? Within what driving range?
- Do they work nearby? Do they commute to a different community at night?
Usually they are within 3 – 5 miles of your business depending on your concept. Often, businesses are surprised at how their best customers cluster in neighbourhoods. This gives you a clue as to where you might find new customers just like them in their neighbours.
How Well Can You Describe Target Customers In Terms of Demographics?
The more details you can unearth, the easier it is to hone in on what kind of new customer will most likely buy from you.
- Age?
- Income?
- What kind of cars do they drive?
- Do they live in an apartment or house?
- Do they own or rent?
- What kind of interests or hobbies?
- What clubs or churches do they belong to?
- High school or college students?
- Families? Age of kids?
- What kind of publications do they read?
- Educational background?
How Well Can You Describe Them in Terms Of Psycho-graphics?
Psychographics are the study of a person’s wants, needs, and interests. It can be used to identify a target market by understanding what motivates them. This can be done by looking at things like their lifestyle, values, and passions.
Imagine how your best customers spend their days. What are the frustrations and challenges they face? For example, let’s say they are families with young kids. They likely spend a lot of time transporting kids to and from, they might also work full time and commute back into your community and they’re constantly trying to manage their time.
As a restaurant, you solve the “the fridge is empty” and “what will we have for dinner” problems they have. Your restaurant offers the solution of convenience, time saving, pick up family style dinner to dine in or take home.
As an auto repair shop, you solve the “how will I find time to fix the car” and “my vehicle needs to keep my family safe” problem. Your shop offers convenient pickup and drop off solutions, regular prescheduled maintenance, and safety inspections on every visit.
Understanding why you are the best solution for your best customers and what problems you solve for them gives you insight into what potential new customers are looking for.
In this day and age of social media, it gives you criteria to use in online marketing, as well as insight into what offers and marketing will entice people to respond.
Knowing who are your best potential new customers means you can avoid costly marketing mistakes. A basic example is running an ad in a newspaper that covers a geographic range far broader than your potential customers are going to travel. Smaller community newspapers will find those closer to your business. Your offers need to match your target audience – if your best customers are childless couples, offering large family style meals for take out isn’t matching their needs.
Aim At The Right Target
Targeted marketing is good because it allows you to focus your efforts on the right people. This means that you can create messaging and content that appeals to them specifically, which leads to more sales. In addition, by understanding your target market’s psychographics (i.e., their demographics, interests, behaviors, and attitudes), you can better understand what motivates them and how to reach them. Finally, targeted marketing can also help you save money by ensuring that your marketing efforts are not wasted on people who are not interested in your product or service. Once you’ve identified a target market, you can then create messaging and content that appeals to them specifically.
If you want to know more about how to create a comprehensive customer list to put all your marketing on autopilot, including getting new customers, request a 90 Day Free Trial of Royalty Rewards® and book a no obligation call by clicking the button below.
