This REPORT is designed for entrepreneurs, small business owners, independent contractors and anyone who needs to build relationships and develop leads or referrals in order to promote and increase their business.
The information in this report is given based on the assumption that YOU know your product and service inside and out and you have already defined your business goals and have somewhat of a business plan in order.
The next step would be to narrowly and clearly define your target market, your ideal prospect.
Some people believe that their products or services would be perfect for everyone. For example, Mary Kay Cosmetics – no offense to my MK friends or other people in the health industry who say ‘anyone with skin’ needs a facial or ‘anyone who has stress need a massage. Then there are people in the home improvement industry who say, ‘anyone with a house’ needs my landscaping, my windows, my furniture or my loan, etc.
For most small businesses however (1-5 employees or even more), I don’t believe this is the most effective way to try to generate new leads and customers. If you determine the right target market to fit your business, you figure out the best ways to reach them AND if you figure out the best message to reach them with you will be spending your marketing dollars wisely. Business owners who don’t plan ahead to figure out who their target market is before they open their doors end up spending a whole lot more money trying to figure it out by trial and error and that’s expensive.
Would you shell out $200 for a pair of shoes without trying them on? Plunge into a steaming bath without dipping a toe in first? Of course not-but people do the business equivalent every day. Many an entrepreneur has found out too late that nobody wants to buy hand-quilted Christmas stockings at $24.99 a pop, or that wealthy customers won’t schlep to the unfashionable part of town for luxury stationery.
The irony: Conventional market research is expensive (corporations regularly budget tens or hundreds of thousands of dollars for it), but no one needs it more than a startup entrepreneur. A couple of marketing blunders won’t put a giant manufacturer out of business, but just one can sink an entrepreneur like a bolt of lightening.
Defining Your Target Market
Your “target customers” are those who are most likely to buy from you. Resist the temptation to be too general in the hopes of getting a larger slice of the market. Try to describe them with as much detail as you can, based on your knowledge of your product or service and how it will benefit them.
Step 1: Ask yourself some questions to get started
1. Are your target customers male or female? Figure 75-80% of your target customers would be which? If it’s split, narrow it down another way but more than likely you can narrow down the gender.
2. How old are they? Give an age range of 10-20 years max, otherwise you might have two target markets. Remember, the marketing messages towards different age groups will be quite different most likely depending on your product or service.
3. Where do they live? Is geography a limiting factor for any reason? Can you narrow it down to specific zip codes or counties? The larger the geographical area you choose, the more people you will find but the less likely you’ll be able to afford to market to all of them so narrow it down and expand out later.
4. What do they do for a living? You can get a mailing list by industry or profession and specific title for example.
5. What does their specific profession say about their lifestyle? Is it very busy with little time to shop? Would they be likely to be familiar with the internet for their shopping, researching, news and event information? Would they be commuting more in their car?
6. How much money do they make? This is most significant if you’re selling relatively expensive or luxury items. Most people can afford a latte. You can’t say the same of custom murals. Narrow this down to a specific range also and high enough that you will weed some people out or again, you’ll have way too many people to afford to market to.
7. Are there kids in the household? What ages might they be? How many would there likely be? What does this say about their lifestyle – are they carpooling, or soccer parents where they are rarely home? Do they possibly eat out a lot or have less ‘family’ bonding time? Or are they empty nesters where they might spend more time at home watching television or reading?
Step 2: Get specific
What other aspects of their lives matter? Here are some examples to think about, see how your target market compares or how you can get more specific with them.
· If you’re launching a roof-tiling service, your target customers probably own their homes. In addition, they probably own homes with older roofs like shake roofs; you can get a list of homes by their age.
· If you’re a realtor, you might be interested in targeting first time homebuyers in which case you might find them to be likely to live in apartments or rentals of which you can get a list of those too.
· If you’re selling your own individual artwork but you can’t create multiple paintings with the same picture, you may have to sell the unique pieces at local art shows rather than selling them online.
· If you’re planning to open a custom-tailoring shop and need busy executives to come for three fittings, you may need to limit it to your local area.
· If you’re a direct jewelry consultant needing women to gather for parties in someone’s home, you’ll want to go where many women meet like mom’s groups, women’s professional organizations, day cares or grocery stores.
· If you’re a business or life coach and want to coach only over the phone then you’ll most likely want to do more online marketing and make sure to have a really top notch website since that’s mostly what people are going to see for their first impression. You can network locally too but the more ‘known’ you are in person, the more people will want to do business with you in person.
Step 3: Keep your mind open to any information
Keep a list of primary research questions handy, such as:
· Who influences your customers and how? Spouses, neighbors, peer groups, professional colleagues, children and the media can all affect buying decisions. Look for hints that one or more of these are a factor for you.
· Why do they buy? Distinguish between the features and the benefits your product or service offers. Features describe what it is; benefits are what your customers get out of it. The latter is why your customers pay you. Are they looking for a status symbol, a savings in time or energy, a personal treat or something else?
· Why should customers choose you and not your competition? What can you offer that the competition doesn’t?
· How do your customers prefer to buy? Many businesses benefit from the broader market provided by the Internet and mail order, while others do better with a physical presence. Don’t assume you fall into one category or the other; customers may surprise you.
Step 4: Identify Your Ideal or Favorite Client
Think about your favorite client – who are they, name them, write down everything you know about them, their family status, age, sex, marital status, where they live, where they work, possible income level, their shopping characteristics.
· Do they like to use coupons or shop on certain days?
· Do they call you at the last minute to get something from you?
· Do they value your service/product?
· Is that type of client the most profitable type you have or the most non-profitable and you just like them?
Step 5: Determine their profitability to your business
Which type of clients will make you the most money, bring you joy and refer you tons of business? These are the types of clients you ultimately want, now where are they?
· Who is the most profitable type of client? The one who will make you the most amount of money the fastest and with the least effort – do you like working with them? If not, you won’t be totally happy with only this type of person, maybe you need a combination of the two.
· How often will they be able to buy or consume your product or service? If they can only possibly purchase your services every 10-20 years (getting a new roof for example), do you never market to them again after the sale or do you heavily market to them after the sale by every means possible for at least 1 year to get all the referrals you could possibly get out of them in that time?
· How likely are they to know others like them they can refer to you? Normally, very likely, in which case following up with them before, during and after the sale is huge – and if you don’t ask for referrals in each stage of the sale continuously then shame on you.
· What is really important to them when it comes to your product or service? Not what you think they should know or like, but actually what they care about, like, ask for, thrive on, are passionate about, etc. These are your target market’s “Hot Buttons” and
these are what you should be addressing in your headlines, letters and marketing efforts at all times because these are why the client would choose to buy.
Defining your business’ target market is ABSOLUTELY CRITICAL to any small business. Everything you do in your marketing, advertising, design, publicity and networking will depend on who your target market is and what matters to them. Making decisions on your marketing and advertising without fully defining your target market or knowing them in depth could be detrimental to your business and YOU COULD BE MAKING SOME COSTLY MISTAKES!