Your Ideal Customer
Your Ideal Customer
No matter how broad a cross-section of customers you serve, chances are you can benefit from narrowing your focus. So now that you've done your research, it's time to identify your Ideal Target Market(s) by sorting through your various Market Segments, looking for prospects with corresponding wants or needs.
Understanding your Target Market will allow you to tailor your marketing efforts to the needs of your customers. Targeted advertising, more appealing packaging, more convenient delivery times, and improved billing practices are just a few examples. For instance, market segment divided by age, might coincide with an appreciation for certain types of music you could use in advertising. Nearly every aspect of your business can be improved once you understand your Target Market.
Target Market Grids
A product marketed to the wrong Target Market will perform poorly no matter how good it is and no matter how large the market is. You've got to get to know your market if you want to sell to them with any degree of certainty. Marketing without that knowledge is like shooting at a blank target. You'll hit the center every once in a while, but mostly by luck. A Target Market Grid is a tool to help you paint a bull's eye on your “marketing target.”
Target Market Grids help you analyze your market by contrasting and comparing product-related segments (products, services, or benefits) with customer-related segments (demographic, geographic, or psychographic). For example, a recreational vehicle dealership might cross reference products (tent trailers, trailers, fifth wheels and motor homes) with customer demographics (young families, couples, retired couples and others).
For example, consider a target market grid for an RV Dealership (sales volume / gross profit). Of course, these are not the only market segments an RV Dealership could choose. They'd likely want to cross reference several different segment categories prior to settling on a Target market. For example, they might also choose to cross reference benefits such as "price," with demographics, such as "income."
| Young Families | Couples | Retired Couples | Other | |
|---|---|---|---|---|
| Tent Trailers | 5 / $2500 | 1 / $500 | 2 / $1000 | 1 / $500 |
| Standard Trailers | 3 / $3000 | 1 / $1000 | 7 / $7000 | 2 / $3000 |
| Fifth Wheels | 2 / $4000 | 1 / $2000 | 5 / $10,000 | 0.5 / $3000 |
| Motorhomes | 1 / $3000 | 1 / $3000 | 4 / $12,000 | 1 / $3000 |
Below are examples of seven common analysis variables. Add any additional ideas of your own to the list.
- Sales volume: your current sales volume for each market (by number of sales or total gross dollars).
- Profits: your current profit for reach market (by percentage of sales or dollars).
- Market Potential: the total number of potential sales from each market (by volume).
- Demand for Service: the percentage of each market currently using the product or service.
- Market Share: percentage of the market currently using your product or service.
- Potential Market Share: percentage of the market that could use your product or service in the future.
- Relationship to Corporate Vision: how well each market would fit with your Corporate Vision (scale of 1-10).
- Other
To create a Target Market Grid, list your customer-related segments across the top of the grid and your product-related segments down the side. Then cross reference them to identify possible Target Markets.
Create as many Target Market Grids as necessary, but avoid unnecessary work. Stick to the segments that have the greatest impact on your business. Your goal is to point yourself in the right direction. You'll gather the details later on.
With this tool you'll be able to analyze a wide variety of potential Target Markets for your business. Begin with what makes sense to you, then use the numbers to verify or eliminate your choices. You'll need a healthy combination of logic and intuition to make your decision.
Your results may or may not point exactly where you expect them to, but ths information will prove to be a valuable resource. You may even uncover new or previously under-served markets as a result. That's not to say you should give up your current customers who don't fit, but you may need to adjust your focus in order to attract a group of customers who are better suited to your business.