What is a Target Market and why is it important?

Your target market is anyone who has a high chance of going through and purchasing from your product or service list, with shared demographics such as age group, sex, and behavioral and psychological patterns.

In understanding this ideal customer, marketing efforts can be tailored to reach them effectively and also get insights about where they are, their pain points and problems, and their buying habits.

There are six steps to determining your target market.

And it starts with knowing what you are selling.

Understanding what you offer

Start by asking yourself what it is that you sell and why your potential customers would want to buy it.

What need does your product or service satisfy?
What pain points or problems does your product or service solve?
How does purchasing your product or service improve your potential customer’s life?

Segmentize your audience

Build your target audience’s profile according to their characteristics and socioeconomic class. Determine the specific people who are most likely to have the same problem your product or service is trying to solve and how disposable income affects their willingness to pay for a solution.

Age: Determine the age range of your current customers. This data will help you when choosing your target segment in social media ads.

Gender: Group your current customers by gender. This will help you understand their specific needs and identify whether these said needs change depending on their gender.

Income: Track how much your customers spend on your products or services, especially repeat purchases. This gives you insight into how much your potential customers earn.

Behavior: Look into pages or brands your current customers follow as well as their preferred social media platform. Knowing the content they consume is useful when devising your content marketing strategy.

Lifestyle: Determine how your customers spend their free time (i.e., their hobbies and activities for leisure) and find out what kinds of products or services they need to support those hobbies.

Get a deeper understanding of the need

Determine the need and track down the root of the problem.

Conduct surveys and interviews to uncover deeper motivations behind purchases. This helps you directly learn about the impact of your product or service to your customers and how solving their problem changes their lives.

Identify your Unique Selling Proposition (USP)

Be proactive in presenting what sets your product or service apart. Define your product or service’s unique features, benefits, or approaches that others lack. Everyone is trying to solve their customers’ problems, especially your competition. Analyze your competitors to identify gaps in their offerings and develop a value proposition that addresses those gaps.

Segmentize further by answering the ‘where’ and ‘when’ of your target market

Identify where your current customers live. This will give you ideas on possible unique cultural beliefs and geographical elements such as time zones and weather which may give you insights on how their location can influence their demand for your product or service.

Do the math: Ensure most cost-efficient efforts and maximum revenue

You need to understand the financial dynamics of your customer segments to optimize your marketing and business strategies. This involves analyzing the Cost of Acquisition (CAC) and Customer Lifetime Value (CLV).

Cost of Acquisition (CAC) is the total cost required to acquire a new customer. This includes marketing and sales expenses. This tells you how much you’re spending to bring in each new customer and whether your strategy is sustainable and profitable.

Customer Lifetime Value (CLV) on the other hand, is the total revenue you can expect from a single customer over the entire duration of your business relationship. This tells you about the potential revenue each customer segment brings over time and whether your investment in acquiring and retaining them is worth it.

These necessary steps to determine your target market will help you improve your marketing strategies. Identifying the right people may seem like a small bit of a greater whole, but it’s everything to effective marketing.

Discover the campaigns of Prometheus where every execution is fueled by a meticulously crafted strategy tailored for each client. To learn more about Prometheus, follow its official pages on Facebook and LinkedIn. Reach Prometheus via email at marketing@prometheus.ph.

How to Determine Your Target Market

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