Being Wise With Your Advertising Budget
As a small business entrepreneur, it is doubtful that you are able to market to everyone. It is important that you define your target market. And just so you know, even the huge corporations that have ample amount of money budgeted for marketing also define and try to appeal to their target market.
It is doubtful you will see BMW advertisements in the poor sections of a city. And I doubt you will find baby strollers marketed in a retirement village in Florida.
Now there are a few businesses and entrepreneurs who believe their target market is everyone. There are just a handful that I may agree with that statement but for the biggest part, every product has a target market.
The target market are the people most likely apt to spend money on the product or service your business offers. Sure there may be sales to people outside that range, but it only makes good sense to put 99% of your marketing efforts towards your target market because that is where the majority of business will come from.
Defining your target market can be difficult, so I am going to provide you with 7 steps to help ease the struggle. These should help you.
Define Your Target Market Step #1: Consider Your Current Customer Base
Now this step won’t fit for a brand new entrepreneurial business but for any others that have already been selling goods or services, it only makes good sense to research your current customer base.
You want to take not of the gender, age, race, income level and career averages.
Even if you are developing a new product, keep in mind that customers who have purchased past products will be apt to purchase the new product if it meets their needs and budget.
Define Your Target Market Step #2: Determine What Problem Or Problems Your Product Will Solve
In my opinion, you should have known the answer to this before you even developed a product. But even if you didn’t, you absolutely need to answer this question to determine your target market.
Every product or service must solve a problem. It doesn’t have to be a huge problem, but it has to be an issue that requires a fix.
Define Your Target Market Step #3: Imagine The Possible Customers
Now just start painting a picture in your mind of potential customers. I suggest writing these down. Think of every possibility you can imagine. Don’t worry about determining which of them will purchase more or less of your product… Just note every single person who may buy it.
We will break it down further in the next steps.
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Define Your Target Market Step #4: Study Your Competitors
You need to look closely at your competitors. Who are they marketing to? What is superior about your product compared to theirs? What is inferior?
Now I am not saying you will market to the same people the competition is, but you might.
Before I move further with these steps, you need to
put everything on paper. I suggest using a pad that you can flip from subject matter to subject matter. This will help you make a determination at the end of these steps.
Define Your Target Market Step #5: Which Of The Potential Customers Will Get The Most Benefit?
Okay, now we move back to your list of potential customers. You are going to now go through this list and scale which ones will receive the most benefit from your product.
I suggest using a 1 through 10 scale with 1 getting the most benefit and 10 getting the least. Just number them next to each one.
You may find women being high on the list. Maybe it also has mothers high on the list.
Do you see where I am going with that? Just those 2 factors helps you put an age group to your potential customers.
At that point, I believe you will focus on any of those with scores of 1, 2 and possibly 3.
Define Your Target Market Step #6: Break Down Those Potential Customers Into More Defined Demographics
I suggest you take another pad and write just those potential customers down who scored high in the most benefits. You now want to break their demographics down further. The example where I told you about women and mothers tells you that the age group would probably fall between 24 – 30 generally.
There are many factors you will want to measure in your look at demographics:
- Male or Female
- Gay or Straight
- Stage of Life
- Religion or No Religion
- Social standings
- Career choices
Here again, I suggest you write down what your primary customer will fit in in each of these areas next to each of the scored potential customers in the previous step.
Define Your Target Market Step #7: Psychographics
This is when you swim deep into the potential customer. I will just use an example. Let’s say that you developed a product that the person can hold as they walk around their vehicle that will automatically detect if any of the bulbs are out on lights.
I would say that both men and women would have a desire for something like this. But, I believe men would be more apt to purchase it.
The price is somewhat high at $270, so I will keep that in mind in determining my target market. So I say men:
- Age – I would say that this could be a wide range. Probably 22 on up to 60.
- Income level – I would put this into a high middle to rich income class.
- I believe Caucasian males would be high on the list.
- I believe these would be white collar men.
Now I go deeper
At this point, I believe the person who will want something like this will be the person who has to have new technology the minute it hits the shelves. He will be the one who says he is buying it for his wife… In a somewhat egotistical fashion.
He probably uses his vehicle often for his career. He is a stickler for keeping his vehicle maintained like it just came off the showroom floor.
I could go on and on but you see the point
You will use those Psychographics to design an advertising plan. You will focus those advertisements directly at “that guy.”
Yes, you will sell to people who are not “that guy,” but I wouldn’t be surprised if “that guy” sent them to buy the product.
I didn’t put it as a step because it will be ongoing… Test, test and test some more. Run various ad campaigns directed at your various target markets until you find the one that works best.
It IS an ongoing process. Keep track of sales and what campaigns they come from and you will find the best one that works for you.
In all of this process, you will want to closely watch your expenses. I have the perfect tool to do just that; it is called The Expense Tracker. Let it manage your expenses while you define your target market.
Check out the Expense Tracker here.
I know these steps will help you. If you have any questions, just ask them below. And please share these steps on your social channels. Other entrepreneurs may need this info too.
Thank you and may your business journey rise…
To The Top!