Imagine you’re tasked with creating, marketing and selling the perfect car for car enthusiasts. Easy enough you say and embark on an initial version of a car that has many attractive features; sleek, fast, metallic paint, and a luxurious interior among other things. The car starts to sell, revenues build and life is good. But, you quickly reach a point where sales starts to stall and you realize adjustments of some sort are necessary. But how, where? The target market of “car enthusiasts” is pretty broad. Are we targeting the enthusiasts that love raw horsepower or quickness? Do they more appreciate a softer ride or tight, race car like handling? Are these the enthusiasts that love a state of the art sound system or are they more impressed with the car’s ability to park itself? Not to mention, what are the best marketing strategies to use to reach these prospective buyers? You quickly realize that your target market is not focused enough to be able to make these decisions.
As a small company, you don’t have the bandwidth to be unfocused. Unfocused means wasted time and effort, two of your most precious commodities. The easiest way to be unfocused is to have a vague definition of your target market. Focus all flows from knowing exactly who you’re creating your product for and having deep insights into their distinct needs and problems. If the “who” is clear, your product, marketing and sales strategies suddenly get a whole lot clearer as well. If the “who” is vague, you’ll constantly struggle to make efficient, intelligent business decisions that grow your company.
In my experience, I’ve seen the following scenario happen quite often with small startup companies. The company starts out with a very broad target customer market defined (and I use the word ‘defined’ very loosely here). A product is created that does a good to great job at solving problems within the broad market and the company starts to get clients. After some time, they reach a point where they’ve either plateaued in their initial client growth, or they continue to take on a very broad client base to the point where there are many different ways they could go with product innovation. In either case, since they haven’t defined a deliberate and focused enough target market, they struggle to allocate their innovation efforts in a strategic and pragmatic way. Without having a clear picture of the target market, their product, marketing and sales strategies turn out to be exercises in futility. The next thing they know, they’ve wasted valuable time and money. In some cases, they’re able to eventually right the ship by refocusing their efforts, and in some cases it never really gets fixed.
So, do you have a clearly defined and focused enough target market? Try asking yourself the following questions to get the conversation started.
What are their distinct needs?
Does your target market share all the same distinct needs? Do they all share the top 3 or so pain points when it comes to solving your target problem? If not, you’ve likely got more focusing to do. You may still have several markets lumped together. If you’ve got a clearly defined and focused enough target market, and you really know who these people are, then this question should be easy to answer. If not, this will be difficult and you’ll likely have too many top problems written down with little confidence in which ones are the most important.
Is it a real target market?
Are you trying to define your target market by backing into your current client base? If you’re one of those companies that I alluded to above that has attracted a pretty broad client base to your initial product, I would suggest not assuming that all these clients automatically fit into your target market. Don’t simply try to find the lowest common denominator from your existing client base and call that your target market. This strategy, in fact, could very likely result in a fictional target market that’s a collection of top needs from several different markets. There are likely many outlier clients that have purchased your product for a certain subset of functionality, for emotional reasons, because they like to experiment with new stuff or for other reasons that aren’t related to being great customer fits. Bottom line, many of your existing clients probably aren’t part of your target market and they shouldn’t be strongly considered when you’re trying to craft your early product, marketing and sales strategies. Instead, try finding which subset of clients are benefiting the most from your product and figure out what their common characteristics are. This doesn’t mean that you have to completely ignore the needs of clients outside your target market (after all, they are paying customers), but it makes it a lot easier to prioritize your efforts.
Do you have profile clarity?
Could you get a new sales or marketing person ramped up quickly and effectively on your target market? Do you feel confident that you could provide specific enough details on your target market to this newbie that they could quickly start generating high quality leads? Could you sit down with them and say “This is exactly who our target customer is. This is their world. These are the things they struggle with and these are their distinct needs”. Would they be stuck trying to figure out who these folks are and where / how to find them, or would they be able to jump right into which channels make the most sense? If the former, then it’s evidence that you don’t have a clear enough picture of who they are.
How big is it?
Finally, what’s the size of your target market (number of potential customers and overall financial opportunity). Is it large enough to pursue? Will it support the business goals and growth that you’ve targeted? You may have a crystal clear profile of a legitimate target market but if it’s not large enough, you may struggle to generate the business you need to survive and grow.