Last week, we looked at why an effective business strategy includes narrowing down your target group. This week, we’ll get into the nitty gritty of how you can actually do that.

Now most of us don’t have access to the big budgets or the big agencies needed to conduct extensive consumer research, create complicated segmentation frameworks and design fancy profiles. The good news is that there’s a lot you can do without all that! You can talk to existing customers, survey your friends, search for studies… and you can even do a lot just with a pen and paper and a little bit of brainwork.

How do you narrow down your target group?

Here are 7 questions you can ask yourself in order to nail down the specific target group for the product or service that you’re providing.

1. What problem do you solve?

A powerful business idea is one that solves an actual problem. There’s that great quote attributed to Henry Ford, that “If I had asked people what they wanted, they would have said faster horses” – and this is true, people don’t always know what they want. Nonetheless, it’s no good if you’ve created something completely based on your own ideas and preferences, and nobody else actually cares.

Your proposed product or service needs to tap into an insight about a want or a need that is either currently not being met or is inadequately so. What benefit are you actually offering? What’s the ‘before’ and what’s the ‘after’ scenario?

For example, if you’re a personal trainer, your programme might take people from a state of feeling unfit and flabby to feeling comfortable and strong in their own body. The problem you’re solving here is that these individuals either don’t know what exercises to do to meet their specific goals or, more likely, they do know but they need the added accountability of someone waiting for them at the gym.

A powerful business idea is one that solves an actual problem.

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2. What do you know about the kind of people who suffer from these problems?

A good place to start is to identify the basic information about your target customer. Do this both in terms of their demographics – age, gender, location, education, etc. – and in terms of their psychographics – their values, opinions, attitudes, etc.

Knowing where they are physically located, for example, will help you to define whether your marketing and the offering itself should be local to you or perhaps if you need to be shipping and serving customers nationally or even internationally. Knowing their income level will help you to set your price point (or, vice versa, knowing your price point may also define who your ideal customer will be i.e. who can afford you).

If you end up with quite a general definition, you might want to ask yourself: Who in this broader group suffers the most? Who will gain the most from your solution? Who will lose the most from not having your solution?

You can get a good picture of these kinds of characteristics without running expensive research studies by, for example, talking to friends and family to get qualitative focus group-style feedback, or referring to reports that are available online in order to get more quantitative data (see also Getting clear on your target audience: 5 tips from a shopper marketing expert).

3. Who are your current customers?

If you’ve already been in business for a while, you have the advantage of being able to look at who are your current customers. You can even ask them specific questions, sending them a survey – perhaps with a special offer to thank them for their loyalty and their support. In reviewing your current customers, you can also look more closely at the profile of your best and most profitable customers. Who are these people and how can you target them more specifically?

If you haven’t started selling yet, maybe you should do so as soon as possible! As we discussed last week, it’s difficult to know up front whether you’ve chosen the ‘right’ target group or not, and people like Tim Ferriss (of The 4-Hour Work Week) and Eric Ries (of The Lean Startup) recommend putting out an MVP (minimum viable product) to test and learn before you invest in a full product and brand ecosystem. Don’t just ask people “would you buy this?” as that might not give you an accurate picture of real purchase intent; instead, try to sell it and see if they actually buy it! You can do this via the most basic of targeted Facebook ads and landing pages.

4. Who do you want to work with?

This may seem like a strange question to ask, but if you’re building your own business then it’s important, I think, to care about your work and to actually enjoy doing it. The people you work with are a core component of job satisfaction.

Especially if you’re in a service-based industry, you might want to ask yourself: Whom do you want to serve? If you already have clients: with whom do you most enjoy working? Where are you finding that you’re having the most meaningful relationships? What characteristics do these people have in common?

Taking the personal trainer example from before, the problem you’re solving is global in its scope. How can you narrow this down: Do you prefer to work with men or women? Age-wise do you want to help teenagers, post-pregnancy women, corporate businessmen and -women who are sacrificing their health to focus on their career, menopausal women who are struggling with their weight…? Do you want to work nationally or even internationally, either travelling around or offering your programmes online – or do you prefer meeting your clients face to face?

5. What are your competitors doing?

If you’re really stuck, why not look at what your competitors are doing? Based on what you can see – their product design, their website copy, their social media posts – whom do you think they are targeting? Who are the people currently buying their products or services?

You can do two things with this information. On the one hand, you can copy them, since there is obviously a market in this area, and either try to win over those specific customers or attract people with similar characteristics. Alternatively, you can do the exact opposite, i.e. choose a different target group in order to differentiate your product and win with a different customer.

6. Is the shopper and the consumer the same person?

In defining your target, ask yourself if the shopper and the consumer are the same person or not. In the gifting category, for example, the shopper will be different to the end user; the same goes for toys for young children, where it’s the parents buying the product for their kids (see also Getting clear on your target audience: 5 tips from a shopper marketing expert).

You may want to define a specific plan for targeting each of those groups (although in the latter example there are regulations in many countries now that forbid marketing to children).

You may also want to consider influencers as an additional target, again with a specific strategy to reach those people so that they can then share their recommendations with their followers.

7. What are the factors that will contribute to your success with this target group, and what might be the challenges?

As you’re choosing your target group, you’ll want to be relatively confident that you will be successful in targeting these people with your business.

For example, what experience or expertise do you bring to the table, personal or professional? Do you have a sound understanding of the problems this group faces and how they live their day-to-day lives? Do you have a strong network within this group? What is your unique value that will give you an edge versus your competitors?

Then look at the other side of the coin, i.e. what might get in the way of selling to this particular target? How will you reach these customers? Will they be receptive to your message? What might be the barriers for them to buy your products or services and how can you address those barriers?

Answering these 7 questions will help you to get a good idea of who your customer target should be. However, bear in mind that this is something that may evolve, as you iterate your product or as you provide your service and find that a certain type of client is attracted to what you offer. If you find that you just can’t get narrow down your target to something you feel happy with, then just put something out there – and test and learn.

If you’d like to discuss your specific business situation and get mentoring or consulting support to define your customer target, get in touch via Anna Lundberg’s profile on Clarity.

When you have a new business idea that you’re working on, it’s easy to get excited about launching your product or service into the world and to focus on creating a beautiful website, writing posts for social media, and getting lots of PR for your fabulous new business. There’s an important step that comes before this, however, a step that we often gloss over: who are you actually targeting i.e. who is your target group? Answering this question, and answering it well, is critical to being able to do all those other things effectively.

The internet means that we can talk to, and sell to, customers all around the world. The fact that you can reach anyone in the world, however, doesn’t mean that you should. We often want to cater to everyone because we feel like we have something of value that we want to share with as many people as possible and, less altruistically but also important, we want to make more money.

This is not an effective strategy, however – in fact, it’s not a strategy at all.

Strategy is all about CHOICES.

An effective business strategy will include choices when it comes to things like geographies i.e. which are your priority countries (or more specific e.g. cities or regions), customers (demographics and psychographics), product categories, and channels (online platforms, social networks, offline locations).

For some reason, making these choices can be really difficult. When asked who their target is, many entrepreneurs and business owners will give a very vague and general answer.

But, as my friend and fellow marketing consultant says, “‘Humans who breathe’ is not a target group!” (Watch Serena De Maio’s recent Tedx talk on How Marketing Can Help You Find Love Online.)

So why is it important to get your target group right?

Let’s take this ‘humans who breathe’ target group as an example (a bit extreme, yes, but not so far from the reality in many cases). How are you going to reach these people? Where are they spending their time? Where are they most receptive to your message? How will you best formulate that message so as to appeal to their needs and desires?

“‘Humans who breathe’ is not a target group!”

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Using a broad definition means that you will be spreading your marketing efforts very thin: across different countries, different age groups, different online platforms… You won’t be able to understand who you’re selling to, as there are just too many variables across such a disparate group, and so you won’t be able to design a product or service, write copy, create a marketing campaign, etc. that will speak directly to that group.

As the saying goes: You can please all of the people some of the time, and you can please some of the people all of the time; but you can’t please all of the people all of the time.

Imagine if someone’s searching for what you provide online. First of all, it’s almost impossible for you to appear high up in the search results if you have a very general offering – competition will be high for generic keywords. Second, even if they do find you, it will be difficult for you to get them sufficiently interested to click through to your site and, then, to stay there.

How can you ensure that your message resonates with their particular needs and wants if you don’t know who these people are?

As another saying goes, it’s better to be a big fish in a small pond than a small fish in a big pond. You’re more likely to be top of mind, to get referrals and to become known in your area if you become the go-to person, brand or company for a particular problem or need. You can always make the pond bigger once you’re well established with that first target group! In the meantime, getting more specific will allow you to focus your time and money where it counts.

Another powerful argument for narrowing down your target can be made based on the theory of the diffusion of innovations, which Simon Sinek refers to in his book and his popular Ted talk.

Rather than trying to target the mass market right away, this theory suggests that you should aim for the innovators and the early adopters. These are the ones who ‘get it’, who stood in line for hours to get their hands on the first iPhone rather than wait until it was out for general purchase. You might also consider targeting a small group of individual influencers, who will recommend the product or service to their followers, rather than going directly for the masses. Having Taylor Swift seen to be using your amazing new whatsit will have her Swifties running out to buy one before you can say Shake it off!

The rest of the population – the early and late majority, not to mention the laggards – are not going to buy until a given amount of time has passed and your brand or offering has become sufficiently established to start to be mainstream.

Of course, it’s difficult to know up front whether you’ve chosen the “right” target group or not. That’s why people like Tim Ferriss (of The 4-Hour Work Week) and Eric Ries (of The Lean Startup) recommend putting out an MVP (minimum viable product) and testing and learning before you invest in a full product and brand ecosystem.

It’s better to find out that your target group is completely uninterested in your product sooner rather than later!

So defining your target group will help you to design a better offering, communicate the right message in a relevant way, and reach the right people in the right place at the right time – all within your limited budget! Have I convinced you?

Next week, we’ll look at how you can narrow down your target group.

How to identify the target group for your business