We’re sure you’ve heard this before, but you really can’t be everything to everyone. This is particularly true for small businesses.
Of course you want everyone to want what you’re selling but to have the best chance of success you need to hone your efforts on communicating with those people that really need what you offer and are therefore most likely to purchase your product or service.
Firstly you need to define who these people are, your target audience. Refine this group as much as you possibly can to get a very clear picture of the group you want to engage with. You may have noticed that some of the biggest brands in Australia know their audience well and engage with them regularly, and I’m not just talking about using social media. Businesses can engage with their target audience through email, at events, through their advertising and much more.
Car brands provide an ideal example of how a product is designed, priced and taken to market in a way that suits a specific segment. For example, a high performance vehicle is focused on the less conservative consumers who would accept higher costs for performance benefits.
By aligning your product, pricing and go-to-market strategies with a particular target market you will be able to build a targeted business plan that helps you identify where your effort should be concentrated and build customer loyalty.
Design a profile
For many companies, large and small, promoting products and services to a group of people based on where they live is very common. However there are endless amounts of variables that will make up a picture of who you should be marketing your business to. These could be based on age, gender, socio-economic factors, marital status, occupation, religion or other demographic characteristics.
Also, not all products and services are sold to the general public. As an example, a new business preparing to market an organic children’s shampoo may identify that their product will be most likely purchased by parents with children under 10 years old. However dermatologists and hairdressers may be important segments to engage with as they are likely to recommend the product to parents or stock the product in store, therefore the business will have several market segmentations. The shampoo company may even decide to use a different product name for each target audience.
Understanding this audience requires research
Once you have a clear idea of who your target audience is you need to understand this group’s expectations and behaviour – the best way to do this is through research.
I realise for many small businesses the thought of undertaking market research sounds like a costly and timely exercise. However, not all research has to cost a fortune. Secondary research is the work that has already been done by someone else. The Australian Bureau of Statistics (ABS) is a good place to start to get Census data and industry information. Apart from the ABS you’ll find other Government agencies, associations and publications provide a wealth of information that will help you develop a picture of your target audience.
But you can still gather information directly from your own customers or clients simply by talking to them, asking other businesses about their experiences and observing consumer behaviour. Also take a look at information in you accounting software, you may recognise buying trends, be able to identify loyal customers or see other similarities that are useful.
Also find out why your target audience chooses a competing product or service. Ask yourself who are my competitors? What are my closest competitors doing? How are they engaging with my target customers? What does my business do better (such as better price, easier parking, or a more accessible website)? Understanding the broader market place will not only help you hone your business strategy today, but help you be prepared for changes in the future.
Formalise a picture of your target audience
Once you’re satisfied you have enough information to identify a target audience or audiences you can capture the key information as a statement. A statement, which may be several paragraphs outlining your target audience, will become a very useful decision-making tool. You can refer to it to consider how price changes or marketing campaigns might relate to the people you want to invest in your product or service. The statement will also become a useful tool for communicating who your target audience is to employees.
If your business has several target audiences, you will have several statements. You can design your statement in any way that suits you. Keeping it short and making short statements will make it easier to refer to. The new organic shampoo company, as used in the example earlier, may start a statement like this (depending on their research outcomes):
Target audience: Children’s organic shampoo (this may work better in a box here?)
- 30-45 years old
- 1-3 children under 10 years old
- Under $80k combined family income
- Resides in Victoria, NSW or Queensland
- Makes purchases online
- Is concerned about price
- Concerned about the environment.
Now you’re ready to engage
Once you have completed the crucial step of defining your target audience, you can engage with them in a meaningful way so they will invest in what you sell.
Advertising that gives your audience no reason to connect with you is pointless. Advertising is just one of the numerous ways that you can use to connect with your target audience to make them feel involved in what you are doing. Once again social media, letters, emails, local events and other activity can bring you closer to your customers.
Your accounting software may allow you to create personalised letters and emails to send to groups of customers quickly and easily. You may also be able to analyse customer spending habits so you can tailor communications to them, or send information at the appropriate time (rather than asking them to make a purchase an hour after they visited your store).
Remaining consistently alert to information that helps form a greater understanding of the wants and needs of your target audience will help you form stronger, long lasting relationships with them.
Measure your success
It is important to ask yourself, have you got it right? Can you access the market segment you have chosen? Is it big enough to help grow your business? Are your target groups responding to your messages? A commonly used marketing phrase is that you can only manage what you measure.
Your overall business plan will set out what your operation is hoping to achieve. Identifying performance indicators will help you determine how positively your business is being perceived in the market place. These indicators will be different for any business but common marketing measures often centre on new customer acquisition, repeat business from existing customers, sales results generated from the customer segments you have identified and/or feedback from customers. Remember to build in short-term, medium-term and long-term goals that are realistic.
Refine your strategy
Regularly reviewing your business strategy and maintaining good customer records will go a long way to helping you make sound business decisions. Just as it is important to have an accounting system that allows you to identify the financial health of your business, it is important to look at your customer growth, spending habits and notice any changes.
I encourage you to identify your target audience or audiences, identify what they want or need and tell them you have the solution!
–Gerald Chait is the Group General Manager, Marketing, at Reckon Limited, the Australian supplier of QuickBooks accounting software.