Identifying your target markets

Identifying your target markets is a core part of any business model. As such, it’s one of the main activities that you and your team will participate in when playing Business’n’Play. It should be a straightforward activity to do: one product, one clear customer segment to sell to. But does anyone really have such a simple business model? In this article we will have a look at the why and the how to make sure you know what you are doing to successfully identify your target market and how it can lead to a more effective marketing and business strategy. Whether you work alone, in a small team or in a large business, this applies to you. 

Imagine you want to start a children’s handmade clothing shop selling pieces made sustainably, giving jobs and fair wages to women who have faced hardships and are trying to turn their lives around. You look at the business model canvas and start with who your target market is… The children?

Market Research

The first and most important part of any business analysis that must be done is Market Research. The probability is that, if you are a solopreneur, or you own your own small business, your product is something that you like, use or need. You are, in effect, your own target market. As such, this is a great starting point because you already have an idea about the age, gender or background of potential clients. There are many ways that you can conduct market research both formally (using a third party to undertake qualitative data analysis) and informally (by looking at the business models of your direct and indirect competitors). Whilst doing this, it would be a good time to start a benchmark analysis too. Ultimately, the more research and information you have, the more informed your decisions will be and the more prepared you will feel. 

For more information on market research and the different types, have a look at this article from Forbes.

Demographics

Demographics or information about people in a specific group or population can prove to be very insightful. This covers everything from age to gender, income, location, and education. The first thing to remember is that your product won’t be attractive to everyone but it will be attractive to someone. If you have a physical space and sell directly from there, is it in a location where people will be able to afford what you produce? Will a product that is sensory do well if you only sell online and describe it in very technical terms?

The shop’s location is not yet settled on but it needs to be in a place where there are families or attractions aimed at families. You realise your target market is not the children after all but their parents, grandparents etc. 

Psychographics

As well as demographics, psychographics (how people’s values, beliefs, interests, and lifestyles inform their choices) will build a more rounded customer profile of your ideal client. You need to understand what values are important to you as well as those of your clients to see where they overlap. People buy based on their value system and lifestyle choices. People with pets will probably want homewares that are easily washable and those who try to live a low carbon lifestyle don’t necessarily want products containing elements that grow thousands of miles away. 

Your friends and many of the parents of your child’s friends are increasingly anxious about the materials used in their children’s clothing and in the environmental chaos that is hitting the headlines daily. However, your parents seem to be stuck on one phrase only… I swear clothes lasted longer when I was a child!

Customer pain points

How did your product or service come to life? Did it solve a problem or challenge you were facing? Can it offer the same solution to others? Identifying what solution you can provide will further clarify your target market. Ask those around you who may be in a similar position or confronting similar issues whether your product would also work for them. If the answer is yes – fantastic! If not, ask them why not and what would help them. This type of instant feedback can give you a great deal of inspiration and food for thought. 

Environmentally responsible, ethically produced, long lasting and play friendly clothing that looks good. Seems to be hitting some of the major pain points so far.

Market Segmentation

Market segmentation is the process by which you categorise potential customers into distinct groups with common characteristics. Once you have done this, you can tailor your marketing to these individual groups and show how you can respond to more than one need. Market segmentation falls into three main groups; homogeneity; distinction; reaction. By working with these three areas in mind to differentiate groups of potential clients you give yourself a better chance of success. You can orientate yourself towards these groups individually rather than trying to please everyone in one go. This normally leads to you pleasing no one at all. 

Parents: clothes that don’t cost the earth (literally), that wash easily and that look cute.

Grandparents: Long lasting and ‘child appropriate’ clothing.

Friends and relatives: Effortless gift buying that will go down well with anyone

Customer personas 

When you sit down to a Business’n’Play session, you are given your character that will be your persona for the whole game. But you are not just given an image and some key facts like age, location and current employment. Instead, you are given a whole description of the character, her dreams and aspirations and what led her to this point of wanting to change her life. This is what you need to do for your target market. Detail the profiles, give them a bit of life and background, consider their salary, position in life, and their leisure activities. This can be crucial in guiding your marketing efforts as well as helping you relate more closely to your target audience.

Testing and refinement

One thing that is important to remember is to not get complacent. In the same way that your tastes and preferences change over time, as well as your personal circumstances, those of your target market will fluctuate. As such, taking time to update your information means you can stay up to date with your customers. Consequently you won’t be left feeling perplexed if you have a sudden drop in engagement or sales. Consistency is key. If you add benchmarking to your quarterly or even yearly business health check and evaluation it will also give you a boost for new ideas and directions for the year ahead! If possible, try to see it as a continuous learning curve offering new and exciting opportunities rather than a dreaded chore that you cheerfully procrastinate until it’s too late.

You have been in business for a year, your shop is doing well in person but something isn’t quite right with the online store. After a quick benchmark analysis and some informal chats with the customers you find the problem. Your website is very minimalist and ‘cool’ looking but there is a lack of information about the clothes and the whole thing doesn’t feel as cosy as the shop. Your target markets are looking for something that gives a more eco, friendly, warm and caring vibe. Now you can respond accordingly!

Digital tools 

Possibly the easiest way to get a quick idea of how well you are relating to your target market is by taking a quick look at your social media and site analytics. If you are using Facebook and Google Analytics they have made a very user-friendly platform to navigate surface and in depth level information. This information is not the only thing you should use. And try not to get too hung up on it because engagement is only one part of your whole business. However, for a surface level understanding of posts that do well and others that do less well, this is a great way to identify who your audience are. From this, you can see what they like and how you can tailor your offering more effectively and efficiently.

Since warming things up a bit for your online presence, things are going better. There is a clear upward trajectory in your online engagement and sales!

Avoiding assumptions

The final thing that we want to highlight is the risk of making assumptions that are not based on data. It is easy to do the ‘fun bits’ that we’ve touched one (creating your Jenny or Gianni, talking to your friends and thinking about what you like) and forget the more time consuming and potentially overwhelming task of accumulating more analytical data. But when combined they give you an overview and a good deal of information that will help you to make informed decisions and hopefully reduce some of that stress we all feel when making choices. No one can pretend that it’s simple, but if you have data to support your gut feeling, that should provide a little bit of comfort!

You really thought a sleek and minimalist website would appeal, no fuss, no nonsense, just let the concept and the clothes speak. That might work for a minimalist capsule collection aimed at high end luxury women’s wear or baby clothing but your clients want to experience the atmosphere they get in store online as well. 

Conclusion

Overall, be consistent, do your research and listen to information you can get your hands on. Without doubt, this will help you and your business to weather difficult patches and make a success of whatever you do. During this entire process you are looking at the businesses and the customer interactions that others receive. It can be very easy to critically judge yourself against these other businesses and convince yourself that you aren’t doing well enough. Where possible, stick to the facts as though you were reading a textbook or encyclopaedia, try not to get emotionally attached to the information and use it to help you to achieve your own goals, even if they don’t look like someone else’s goals. You are you, they are someone else! Your target market is out there waiting for you – go find them!

The story is fictional and not based on anyone I know but the situation is very possible. If you feel stuck, a little lost or in need of a helping hand try some of these steps or come join us for Business’n’Play! Booking is now open for 3rd February 2024!