Importance Of Target Market In A Small Business

A crucial first step in the marketing process is determining your target market. This will ensure that your marketing effort is a success. This will ensure that your marketing message is more effective because it will resonate better. If you focus on the proper target market for your business, you’ll get a better return on your time, money, and effort.

Selecting your target market

Many business owners define their target market as “everyone.” In practice, this does not apply to anyone. Many business owners aim to serve the largest market possible in their quest to obtain as many consumers as possible.

On the surface, this appears to be rational. Many business owners, on the other hand, are concerned about narrowing their target market since they do not want to exclude any potential clients.

This is a common beginner error. Most large-scale advertising falls under the area of mass marketing, which is also known as “branding.” With this sort of marketing, business owners are comparable to an archer launching arrows in all directions in the hopes that one or more of them would reach the intended target.

The goal of mass marketing is to “get your name out there,” according to the idea. I’m not clear where “there” is or what is supposed to happen after your name is delivered “there.” Regardless, the premise is that if you broadcast your message frequently enough, you will attract an audience of prospects who will buy from you.

You’d be right if that seemed like a lost archer flailing around in the fog, launching his arrows in random directions and hoping for the best. You could believe, though, that if he just shoots enough arrows in all directions, he’ll strike his objective. Right? Maybe, but for small to medium-sized enterprises, at least, that’s a bad marketing strategy because they’ll never have enough arrows to hit their target enough times to achieve a good return on their investment.

Niche- Harnessing the power of focus

A niche is a subcategory that is precisely defined. Consider the marketing sector, for example. This is a broad classification. A digital marketing company can provide a wide range of services, such as Search Engine Optimization, Social Media Marketing, Email Marketing, Lead generation, and more.

Take, for example, one of these subcategories: search engine optimization. This could be our niche. However, we could tighten it even more by focusing on SEO for businesses that are new to the industry and want to improve their ranking and drive traffic to their website. This narrowly defined niche. You may be wondering why we would limit our market so severely. This is the reason-

  1. You only have a certain amount of money. Your marketing message will become diluted and weak if you focus too broadly.
  2. Relevance is another critical factor. Your ad’s goal is for your prospects to say, “Hey, that’s for me.”

Would an ad targeting this specific problem help spark your interest if you are a new business owner concerned about traffic? Without a doubt. What if the advertisement was a general ad for a marketing service that listed a long list of services, one of which was SEO? It’s likely that it’d get lost in the shuffle. A 100-watt light bulb, similar to the type found in most homes, illuminates a room. A 100-watt laser, on the other hand, can cut through steel. Same energy, and a drastically different outcome. The distinction is in how the energy is focused. The same holds true for your marketing.

By focusing on a specific niche, you can become a big fish in a small pond. It enables you to dominate a category or geography in ways that being general does not allow. You want to target niches that are “an inch wide and a mile deep.” A mile deep indicates that there are many people looking for a solution to that specific problem. Once you have mastered one niche, you can expand your business by locating another profitable and highly targeted niche and mastering it as well.

Niching makes price irrelevant 

Would you rather be treated by a general practitioner or a heart specialist if you had a heart attack? Of course, you’d go with the expert. Would you expect a heart specialist to charge you more than a general practitioner for a consultation? Obviously. How did the price become so insignificant? That is the allure of filling a niche. Whether you can charge significantly more for your services than a generalist. Prospects and customers have different perceptions of you. A specialist is sought after rather than purchased on the basis of price. They are held in higher regard than a jack-of-all-trades. They are well compensated for solving a specific problem for their target market.

So figure out what your market wants a solution to, and what they will pay you well for. Then enter the mental conversation they’re having, preferably something they go to bed worrying about and wake up thinking about. If you do this, your results will improve dramatically.

Trying to target everyone effectively means targeting no one. Going too broad will kill your “specialty” and turn you into a commodity bought on price. You become a specialist by narrowly defining a target market for which you can wow and deliver huge results. When you narrow down your target market, you naturally decide who to exclude. Don’t underestimate the significance of this. Many small business owners are afraid of alienating potential customers. They mistakenly believe that casting a wider net will result in a greater number of customers. This is a huge error.

Dominate your niche, and then do the same with another and another. However, never do so all at once. This dilutes your message as well as your marketing power.

How to identify your ideal customer

Now that you’ve seen the power of selecting a narrow target market, it’s time to pick yours. A great way to determine your ideal target market is to use the PVP index (Personal fulfillment, Value to marketplace, and Profitability) and assign a rating out of 10 to each segment you serve.

P- Personal fulfillment: How enjoyable is it dealing with this kind of customer? We occasionally work with customers who cause havoc and argue with us but we work for the sake of money.

V- Value to the marketplace: How much is this market segment willing to pay for your work? Are they willing to compensate you handsomely for your efforts?

P- Profitability: How profitable is your work in this market segment? Even if you charge a high fee for your services, the numbers may show that you are barely profitable or even losing money. Remember that it is all about the “leftover” rather than the “turnover.”

Conclusion 

Knowing your target market will assist you in determining where to look for potential clients who are interested in what you have to offer. If you have a target market, you know where and how to focus your marketing efforts or what to offer that is engaging and well received.

Author’s Bio 

Shirin Pedhambkar

I have completed my degree in Hotel Management and working in the field of Digital marketing. I am mainly focused on content writing but besides that, I find myself interested in SEO and Social Media marketing. My expertise spans in the field of the hospitality industry, mainly in the food and beverage department.

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