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Raising money for your startup Step 5: Identifying your specific target market
This is especially true when you set up a startup. If the business solves a genuine problem in the marketplace, you should already have an idea of the type of person your product or service will be targeted towards.
In the very early stages, it may be worth casting a wide net but once your potential customer base has been identified, you will then need to focus in and find your niche.
Setting your target audience as “males” or “stay-at-home mothers” isn’t specific enough and isn’t a successful approach as the customer base you are trying to reach is just too broad.
Defining a focused target market doesn’t mean that everyone else is excluded and therefore not allowed to engage with your business.
Identifying the problem your business solves will help guide you towards the defined market you should be targeting. For more information on this see our post, on solving a genuine problem.
We’ve gathered five posts which include some fantastic tips on how to identify and define the target market your business will serve.
Research is one of the most important parts of the potential success of your business and understanding your customer well will help it grow faster.
This article provides entrepreneurs with 10 questions to ask themselves as they determine their target market , including: “What does my network think?”, “How will I find my customers?”, and “How did my competitors get started?”
Did these questions help you identify your customer base? Let us know by leaving us a comment.
Devoting time and resources to identify your target audience is necessary not only for helping you introduce people to the product or service you have to offer, but can also help you to maximise the Return on Investment (ROI) you put into your marketing efforts. The below is from the piece:
Sharpen your focus
One of the most effective things you can do to market your product smartly and efficiently is narrow your gaze – in other words, prioritize. Which efforts should you prioritize? Here are three tips to help you focus your marketing approaches:
This article offers some invaluable insights into how to go about carrying out market research. This research can take many forms, which Dahl introduces here:
- Demographics: If you oversee the advertising for a new business (or you want to go after a new type of consumer for your business), you can start by checking out some basic demographic information. The best research comes from primary sources — in other words, you should call around for information.
- Publications: You may also be able to find information in publications, which may track demographics, sales information, trends in your industry, and other useful consumer information.
- Potential customers: Conduct an informal poll by asking potential customers — especially those you've identified as your target audience — what they’re looking for that other businesses don’t provide.
Identifying your typical customer and tailoring your marketing efforts accordingly is essential to building a solid foundation for your business.
In the early days of your business, every penny is important, which means that you don't want to waste any money on unfocused marketing by chasing the customers.
This article talks about the importance of identifying your target audience and ensuring it is cost-effective: "Targeting a specific market does not mean that you are excluding people who do not fit your criteria. Rather, target marketing allows you to focus your marketing dollars and brand message on a specific market that is more likely to buy from you than other markets.
This is a much more affordable, efficient, and effective way to reach potential clients and generate business."
Once you've carried out some detailed market research, this article introduces the idea of creating a "customer profile" which is described as an "in-depth description of who your typical customer may be and includes demographic and psychographic information". Glowski goes on to explain what those two terms mean:
Click on the article's title to read the full piece where Glowski explains why demographic and psychographic information is essential to the development of your customer profile.
Investors want to know exactly who your business will be (or is) targeting, as a focused customer base has more potential of helping to deliver a return on their investment than a business which tries to please everyone at the same time.
Use the tips above to identify and define your target market to give your business the best start when it comes to finding customers, attracting investment when raising money, and growing your business.