How To Choose The “Right” Target Audiences

A while back we chatted, we talked about how to get a handle on your marketing planning. Well, today, I’m providing tips on how to determine one of the most important foundational elements of your marketing plan: The consumers you’ll be marketing your products / services to! Here are four lists you should make to determine not only which target audience is right for your business, but ideal.

Take Advantage of Your Competition (List #1)
The easiest way to create an initial list of potential target audiences is to study your competition. (Why reinvent the wheel, right?) Ask yourself: Who are my top competitors and to which groups are they marketing their products / services? This is a great way to begin strategizing groups that could (or should) be your target audience.

Look Internally (List #2)
Once you’ve surveyed your competitors’ target audiences, look internally at your company’s capabilities and goals. Think about what you sell, then ask yourself: Who NEEDS my products and services? Follow up with: Why do they NEED what I offer? Remember: The key word in that sentence is need, not want! If you cannot state a “why” for a particular group within 30 seconds, that group should not be included on your list; however, if you can, go ahead and add it.

Start Organizing: Drill Down & Be Specific (List #3)
Lists #1 and #2 combine to form your “long list” of potential target audiences. Now it’s time to find the right target audience for your business, which should be a much shorter list (aka: list #3). To do this, use the following factors to eliminate entries on your long list that do not fit your business’ goals and capabilities:

• Category – Which category describes your business? At the top level of the target audience hierarchy are the two primary categories into which all businesses fall: Business-to-Business (B2B) and Business-to-Consumer (B2C). If what you sell is designed for a business / organization / civic agency, etc. you’re a B2B business; if not, you’re a B2C business. (NOTE: Yes, it is possible to be both a B2B and a B2C business. If this is the case, your list #3 will be divided into two sections—one for your B2B target audiences and one for your B2C target audiences.)
  
  
• Geography – What is the realistic geographical reach for the products / services that you offer? The area that you can feasibly service may be a neighborhood, a city, a zip code, a state, a multi-state region, a nation or multiple nations. Consider the logistics associated with providing your products / services when determining the geographical area of your target market. Nix target audiences that are outside of your geographical reach.
  
  
• Demographics – What are the key characteristics that you believe that your target audience should possess? Decide by creating a demographic profile. If you’re a B2C entrepreneur, your profile should include gender, age (range) and income (range); in some cases, you may also want to include preferences for each target market’s education level, lifestyle habits, marital status, profession, etc. If you’re an entrepreneur who targets B2B consumers, your demographic profile might include characteristics such as years in business, annual revenue, industry and organizational size. Once you’ve built your profiles, apply them to the remaining potential target audiences on your list to further narrow down the possibilities.

“Test” Your Target Audiences for Profitability (List #4)
At this stage, you finally know which are the right target audiences for your business! Just look at what’s left on list #3. While you can market to each of these audiences, I recommend that (at least initially) you focus on those you believe will be the most profitable. Consider the size of the groups on your list, how accessible each group is, each group’s ability to afford your services and like criteria to determine profitability potential. Ultimately though, you decide the criteria for profitability. The target audiences left on your list become your “A” audiences on list #4, your ideal target audiences! 

Map It Out
After completing list #4, most businesses will have one to three main target audiences and two or more sub target audiences within each of those groups. Therefore, the best way to organize and visualize your target audiences is to create a diagram. A diagram is also a great way to create a quick reference that you can use as you’re the creating strategies and tactics for each target market in your marketing plan.

One Final Note...
Fine-tuning your target audiences should be an ongoing business practice because consumer preferences / needs are constantly changing. Therefore, the profile for the target audiences that are right and ideal for your business now may not be in the future. If you can, re-assess your target audiences every six months; at minimum, make it a priority to review your target audience choices annually.