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.

A good product, and an effective marketing campaign, always starts from a thorough understanding of your WHO, your target audience.

Of course, your product or service is amazing and you want as many people as possible to benefit from it, so why limit yourself by defining a specific target?

Well, getting specific in defining a target audience means that you can address the problems that they are facing, it means that you can speak to them in a way that will resonate with them, and it means that you can target them in a time- and cost-effective way.

How specific do you need to get?

Well, last week I heard about a business targeting women seeking happiness … who want to do yoga during their ‘time of the month’. The woman who created this business is, understandably, the leader in this niche and making a six-figure income as a result.

So how can you go about identifying your target audience?

As a startup or small business, you’re not going to have the big budgets to spend on focus groups and statistical research – but the good news is that there’s still plenty you can do without this. Here are 5 steps from shopper marketing expert Eveline Bettels to get you started…

5 steps to identifying and building on your target audience – by shopper marketing expert Eveline Bettels

1) Be clear on both the shopper and the consumer

The consumer and the shopper can be two different people. For example, when it comes to toys: the end consumer is the child but the shopper is actually the parent, most likely the mother. Your toy marketing should include some message to the shopper to convince her to buy your product, whilst making the toy itself desirable and fun for the kids (obviously!).

Where these are different, you will want to target both the shopper and the consumer. This is the case, for example, when it comes to gifting at key consumption periods such as Christmas, Valentine’s Day and Mother’s Day. Your ‘who’, and therefore your message, will be different at different ‘touch points’.

2) Look at the demographics of your potential target

Consider factors such as age, gender, social status, education, location, and so on. For instance, if you’re offering financial tax advice: whom are you going after? Are you targeting people with a simple one-income, no-kids household, or a married couple, double income, with two kids and a mortgage?

Once you have identified that, try to understand their concerns and possible needs in order to provide solutions to their problems. In the end, your product or service has to be relevant to their needs in the moment, and connect them to the answers that they’re looking for.

In the example of financial tax advice: A young family doesn’t necessarily have the time or knowledge to do this kind of tax calculation and your advice would be making something that is complex and time consuming very quick and easy for them. Hence, your marketing could be about how problem solving will lead to something even better (e.g. less hassle, more family quality time).

In the case of the toys example, try to understand the concerns of today’s parents, the shoppers: they may want to give children educational toys, made of sustainable material, without any harmful chemicals, and so on. Think of where they would be researching these topics and what the current search terms are within that category.

3) Think where and how you want to sell your product or service

What’s the right channel for your product or service? Purely online, or is it better to have face to face time with the client? The latter may be the case especially for highly emotional categories where personal advice is preferred, like cosmetics, skin care, fragrances, but also career advice, and so on.

Wherever you choose to be present, don’t underestimate the business-driving power of the internet. Even if you’re only selling offline, a nice website and the right ranking on a search results page can drive your brand awareness significantly. Also think about how the customer journey will bounce back and forth between online and offline.

When it comes to online, where exactly are your customers active? There’s no point in writing beautiful articles on your blog if your target audience is never going to read them! You can make some assumptions here based on age and gender, for example, Millennials are often found on Instagram and Snapchat, Pinterest has a largely female audience.

Today, mobile marketing is also a key enabler for driving brand awareness. 51% of smartphone users have discovered a new company or product when conducting a search on their smartphones.*

In essence, you have to anticipate the moments when and where potential future clients may interact with your brand or product, and then commit to being there to help answering their needs.

*Google Consumer Survey in the US, August 2015

4) Keep in mind today’s digital technology

Today’s technology allows anybody to be connected, at anytime, and anywhere in the world; make sure you’re present where your target is.

With an ever-growing smartphone penetration, shopping as we once knew it has evolved tremendously. Shoppers want to want to know, go, and buy swiftly. Your brand presence has to be appealing, fast and frictionless.

Thanks to social media, consumers have nowadays become key brand ambassadors. Use them to your advantage and respond equally to negative impressions. If somebody tweets something bad about your brand, product or services, respond immediately and prevent a negative spiral that will give you a bad word of mouth.

By the way, the number one key purchase influencer for any category is still family and friends – before any advertising or in-store communication. It’s the connection and exchange between family and friends that has changed, i.e. massively increased.

5) Do your research

You may not have the big budgets that big companies have to do quantitative research or fancy focus groups but there are still plenty of ways in which you can do effective research. Here are some ideas:

Leverage your own circle of friends and family for feedback. There are free online questionnaires that you can create and send out (e.g. Zoomerang, Survey monkey, etc.).
If you want to get unbiased comments and insights, you could potentially work with schools or universities and get them to do the research for you as a project.
Depending on the client relationship, you may want to bounce some ideas with a handful of loyal clients or consumers. Make sure you reward them for their opinion and time; make them feel that they’re part of something important.
Using your website, you can test and learn real time for a given period of time. Do a pre-/post- scenario, or simultaneous A/B test, and assess the immediate impact.
Use free tools that are available online: Google Analytics, Google Trends and Think with Google are just a few examples. Consultancies also regularly publish articles on various topics: for example, BCG, Deloitte, Harvard Business Review, etc.

How to identify the target group for your business