Taking Aim: How to Identify Your Target Audience

What's your mark?

Your business – and every business – has a singular driving goal: capturing more customers and, ultimately, owning your market. Today, owning your market doesn’t require you to spend more on marketing and promoting your business than your competitors. However, it does require you to have a more efficient marketing and promotion engine in place that yields maximum return for every dollar and every hour you invest. The process of building this engine doesn’t begin with tactics; rather, it begins with identifying your target. No business – yours included – can afford to market to everyone. Of course, it’s tempting to try to reach as broad an audience as possible in the hopes that no potential customer will slip through your fingers. However, in actuality, this approach will cost you much more money and deliver far less satisfactory results because you’ll have greatly diluted your chances of reaching those whose needs you truly serve. It’s important to understand that your target audience does not encompass anyone who might possibly ever buy your products or services. Rather, your target audience is comprised of those who are most likely to buy and, therefore, become the primary focus of your marketing efforts. Identifying the right niche provides the foundation for success in all aspects of marketing and promoting your business:

• It allows you to focus your efforts on those tactics and mediums that are most effective in reaching this particular group.
• It allows you to tailor your sales message to focus on the needs and concerns that are of greatest relevancy and urgency.
• Most importantly in today’s marketplace, it allows you to build a strong community around your brand comprised of people who love what you do and happily serve as your fans and evangelists.
• And in real dollars and cents, it’s the difference between sending thousands and hundreds of thousands of postcards to achieve the same end result.

Here are the steps you should take to ensure that you’re targeting the right audience:

Segment your customer base.

Who are your customers? Of course, there are many different ways to answer this question. Often it’s easiest to begin by examining your sales data and segmenting your customers into groups based on demographic factors, including age, gender, income level, education level, marital and family status, industry and geographic location. In working though this process, you’ll likely find that a particular group or groups emerge as those who buy from you most often. This simple step can also help you identify how best to market the same product or service to different groups. Some market segments may be better reached at trade shows while others can be reached at home with a direct mail campaign.

Dig deeper.

Breaking your customer base down into groups based on basic common characteristics like gender and income is only step one. To reach and engage with these groups effectively, you’ll need to develop a deeper understanding of both their lifestyle and their motivations. Start with one of your products or services and evaluate it through the eyes of the customers that exist within each group you’ve identified. Make a list that includes every possible reason this type of customer might want this particular product or service. Maybe they are trying to solve a problem, maybe they just want to feel good about themselves or to satisfy a basic need. Going through this process will help you drill down to the specific benefits and outcomes that should be the core focus of all your future communication with this group. Secondly, think about the routines of their day-to-day lives and how this communication will be best received. Do they frequently read the paper? Do they spend a lot of time in the car listening to the radio? When searching for news and entertainment, do they turn on the television or pick up their iPad? Are they likely to be active on social media platforms and, if so, which ones? This type of analysis is essential to ensuring that you choose the right vehicles and mediums to capture their attention.

Keep digging.

At this point, you’ve established a solid foundation of knowledge about your target audience. But if you dig a little deeper, you might uncover additional information that will allow you to sharpen your approach even more. Now that you’ve segmented your market and gained an understanding of what drives your customers, see if you can identify which group or groups offer the most marketing bang for your buck. For example, of all those who are most likely to buy your products or services, which groups represent the most profitable? In the B2B world, these are usually the clients with the greatest longevity or those who utilize services with the greatest profit margin. Also, who are the customers or clients that send you the most referrals? These are your very best customers because they do the work of selling for you, so make sure you are not only reaching your existing customers who fall into this category but also others like them because they represent a group whose needs you are particularly good at serving. Finally, it would be a mistake not to examine who your competitors are targeting. This is not so that you can just copy their strategy and run with it. To the contrary, what you’re really looking for is any gaps in the market that they might be overlooking so you can swoop in and grab these underserved segments.

Put your target to the test.

Now that you’ve identified your audience, it’s time for the rubber of your marketing plan to hit the road of execution, right? Not so fast. You need to put your construct of your target audience to the test to ensure that it’s one that can sustain and grow your business. This process is often called a SWOTT (strengths, weaknesses, opportunity, threats and trends) analysis. Ask yourself the following questions:

• Are there enough people within the audience you’ve identified to support your business?
• Can they afford your product?
• Will they see a legitimate need for it?
• Where do your prices fall in regard to their expectations? Too low? Too high?
• Are there opportunities to upsell other related products or services to this group?
• How much competition already exists in the marketplace for this group?
• Are there any trends you can identify of which you should be taking advantage?

While the process of identifying your target audience may seem complex, these steps hold the keys to competing effectively in today’s marketplace. When you clearly understand who buys from you and why, only then can you find the channels they frequent and become one with your tribe. And wouldn’t you rather own your target market than merely shoot arrows into the dark, hoping one will land?

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The New Rules of Customer Engagement

The rise of the culture of the Web has revolutionized the nature of how businesses and customers relate to each other. Whereas companies could once shape and direct the perception of their brand through carefully crafted ad campaigns, direct mail and press releases, today the flow of information runs fast and free, and customers now own the conversation. And because whoever owns the platform dictates the culture, the world is a more human, less institutional place to do business. Today’s customers want to feel good about the products they buy, where they came from and how they were made. Moreover, they want to like the company behind the product – that is, genuinely like it, not just press a Facebook button. We are entering an age of emotive economics. Corporations have been forced to adapt to this new, people-centric culture by connecting with customers on their own turf in more casual, conversational ways. There’s little room or respect for old-school corporatism’s pomp and protocol. And those businesses that cling to traditional behaviors in the online community will earn its scorn very quickly. Those companies that have embraced this new landscape and its risks have enjoyed great reward. For this reason, the human face, rather than steal and glass, has become the façade of big business. Yet with style must also come substance. It is no longer acceptable to be about profit alone. Companies are expected to contribute to the world in ways that make their customers’ lives better. Consumers are demanding that business be done on their terms. It should come as no surprise, then, that human values – transparency, respect, conscientiousness, kindness, trust, generosity and the like – are the keys to engaging with customers in this brave new world of business. So how can you use this new dynamic to your advantage to grow your business? You must embrace the new rules of engagement, understanding that when you put people first, profit will follow:

1. Don’t treat customers like they’re stupid.

When Netflix bungled its attempt to change its pricing structure last year, the backlash in the online community was severe, with many customers threatening to cancel their accounts immediately. It was clear that customers viewed Netflix as a value-priced alternative to more expensive traditional paid media channels, and therefore many felt betrayed by the company’s sudden doubling of their fees. While the price increase itself wasn’t really so unjustifiable, what made it unpalatable for customers was the company’s lack of transparency in explaining the business drivers behind the rate hike – the rising operational costs of maintaining a physical DVD business and the growing licensing fees for content streaming. Instead, Netflix spun the move as giving customers a “choice,” offering the option to subscribe to a DVD-only service at its lowest price ever. Here's an excerpt from their ill-advised news release: To his credit, CEO Reed Hastings acknowledged the poor handling and chalked up the misstep to “overconfidence,” which still sounds like PR spin, but hey, we’re making progress. The lesson? If a change in product or policy may have negative consequences for your customers – even if only in perception – acknowledge them, express empathy over the inconvenience or added cost, explain the reasons if possible and then point out the benefits or offer alternative options. People understand that businesses must evolve and that profit is still part of the equation. Don’t assume that your customers are beyond reason or treat them like they’re too stupid to detect what’s really going on.

2. Over-serve your customers.

It’s always good business to go the extra mile for customers, but never more so than when trying to recover from a mistake. How you handle disappointment is what determines whether your customers write you off and tell everyone about it or trust you more and spread the good word about you. When Google decided to phase out Wave due to poor user adoption rates, they didn’t just shutter the windows and bury the technology as if it never existed. Instead, they gave users months to move their data off the service, converted Wave into an open-source project and gave the Wave community the tools to get involved:

3. Be humble and listen to your customers.

Building on the success of its breakthrough app Wunderlist, Berlin-based software firm 6Wunderkinder recently launched Wunderkit, a project collaboration and management tool designed around the social connections of today’s work environment. Wunderkit was made available in a “freemium” model, offering standard features to all users for free with additional functionality available for a small fee to power users. As the company analyzed feedback from its beta release of Wunderkit, they realized the community’s dissatisfaction with project collaboration between users – one of the platform’s central features – only being available to premium users. What follows is a fantastic example of how to demonstrate that you’ve heard your customers loud and clear, understand their feelings and are acting to resolve the issue:

The customer is king, and the king is here to stay.

Never underestimate the commitment required to engage with customers effectively in today’s marketplace. Human relationships are not managed well with rigid rules and policies but instead must be governed by human values like compromise, sensitivity and transparency. It takes much more than a Twitter account and Facebook page to win the hearts of customers. You must develop a culture that is focused on and driven by the customer through and through. Be purposeful in growing such a culture. Establish your own rules of engagement. Make sure every employee is encouraged to embrace and exhibit those values. Empower them to do whatever it takes to take care of your customers. The journey may be a bit rocky at times, but if you walk the line faithfully, you’ll earn something from your customers that can never bought with advertising dollars – trust, respect and even passion for your brand and what it stands for.

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