By Joan Herbert
When you have a new business idea, it’s easy to presume that your product or service has mass appeal. You and your associates think it’s the best thing since sliced bread so surely everyone else will, too.
It’s very rare, however, that a product or service can be everything to everyone. So, whatever stage of business you’re at, it’s important to establish and then keep re-establishing exactly who your business audience is. In doing so, you can find out how best to sell, market and price your product in order to maximize exposure and sales.
Here are the six steps you need to take to identify your business audience.
Step One: Analyze your Product / Service
Firstly, you need to establish the product or service you sell offers to customers. Start by drawing up a table, listing the features of your product on one side and the benefits those features have for customers on the other. For example, if you’re selling armchairs, one feature could be extra padding in the cushions. The benefits for a customer are extra comfort and extra support. You can then make a list of all of kind of people for whom these benefits will appeal.
Step Two: Analyze Current Customers
If you are already in business, analyze the customers who are already buying from you. What do they have in common? What do they perceive to be the most crucial benefits of your service? Market research through polling of previous customers and through focus groups can give you a real sense of what links your audience together.
Step Three: Analyze the Competition
What kind of audience are your competitors appealing to? Analyze the competition in terms of their share of the market, the market segments they appeal to and their marketing strategy. You can use further focus groups to establish what customers think of particular companies in comparison to your own and use resources such as those available through Companies House in the UK to view your competitors’ business history. Ask yourself if you can seize some of their market share or if you are better seeking out a niche market, currently overlooked by your competitors.
Step Four: Create a Customer Profile
With the information you’ve gathered from analyzing your product, your current customers and the competition, you can now create a customer profile. What is the age, the gender and the occupation of your customer? Where do they live and what is their level of income? Beyond these demographics, you’ll need to consider the psychographics of your target market. This encompasses issues such as attitudes, values, hobbies and lifestyle. By answering all of these questions, you should have a fairly comprehensive idea of your target audience.
Step Five: Assess Revenue Potential
Now you know who your target audience is, you need to assess whether they have the capacity to bring adequate revenue to your company. How many people make up your audience? Are you able to reach them all effectively? How often are they likely to purchase your product or service? Use these figures to project potential revenue and make a decision as to whether your product or service is a viable business prospect. If not, it’s time to go back to the drawing board.
Step Six: Segment Your Audience
While it’s tempting to market your product to as many people as possible, it’s much better to focus on the market in segments and adapt your promotional materials accordingly. Break your audience down further into categories based on their demographic and psychographic profiles. By marketing to each of these segments separately, you can improve your impression to conversion rate. Over time you can also assess the product’s success within each of these segments and understand where the lion’s share of your revenue comes from.
Understanding your target audience and what makes them tick is essential for business success. Thorough analysis and research into your market can inform all design and marketing decisions. This in turn will make the driving and directing of your company a simpler and more sure-fire process.