Define Your Target Market
What is a target market?
A target market is a group of businesses that a firm chooses to sell their products or services to. The target market should be selected based on an ideal fit between the pain, problems, or aspirations of the members of the target audience and the capabilities and experience of the firm.
How to Define a Target Market?
A target audience can be defined based on demographics such as geography, revenue, number of employees, industry, etc. and psychographics such as common problems, common aspirations, or common pain.
Here's an example of a target audience: Metal fabrication companies located in the State of California with at least 25 employees or revenue over $5 million who aspire to add powder coating and painting to their capabilities and want to increase business significantly over the next five years.
Why is defining a target market important?
No business, regardless of size or resources, can affordably target a market of "every company." A smaller business can compete with large companies by choosing a niche market. It's important to note that selecting a target market does not mean you exclude companies that do not meet your target criteria. By choosing a target market, you are able to be more efficient and more effective with messaging and engaging with that target audience. You can focus resources on the best group of firms where you offer the most value.
When you focus on an audience where you provide the most value your firm becomes the go-to expert (for what you do best) for that chosen audience. Experts get paid more, make more profit, get more referrals, and grow faster than a generalist firm that markets to everyone and anyone or to a very broad audience. When you focus on a target audience, your sales and marketing teams and resources are more efficient and produce a larger ROI.