Customers are the lifeblood of any business, and knowing them is vital to your digital marketing strategy. You must ask yourself, “Who would be a good fit for my product? And what are their interests and priorities?”
Conducting thorough market research can help answer these questions and decide which contracts you will most likely win. But how do you identify a target market, and what exactly is it?
Let’s define a target market, analyze it, see some helpful examples, and discuss target market segmentation.
Target Market Definition
A target market is a group of people for whom your products and services are intended. These groups can be further divided into market segments characterized by shared traits such as demographics and purchasing behaviors.
Typically, an industry establishes a target market, representing a specific part of the larger market the sector covers. Behavioral patterns, geographic location, and demographic variables usually determine it.
Let’s assume you’ve developed a B2B software product that automates the calculation of sales commissions. In this scenario, you’d presumably concentrate on businesses that pay cash incentives with more than 20 salespeople.
You’re well-versed in your industry, but there’s no one-size-fits-all mold for the companies that operate within it. If you were attempting to target a market for your product, start with company qualities such as scale.
A targeting strategy is a long-term plan. It focuses on your ideal customer’s demographics, interests, and behaviors. This helps improve sales performance. To do so, you must first determine your target market and what they want from you.
For example, suppose you’re a B2B SaaS company with less than 100 employees selling to a Fortune 1000 company. In this case, it is not the same as for a big telecommunications company with millions of customers. You’d want to know exactly how big your ideal client’s business was to get started on a target market analysis.
How to Analyze Your Audience
To properly grasp your target audience, you must first conduct some research. You can make a good marketing plan if you understand your products and services. This plan will help improve your marketing efforts.
Analyze Your Niche
Whatever you’re offering is most valuable to a particular set of people within a niche market. To understand your niche, look at what you’re selling and why you’re selling it. This will assist you in not only determining what you have to offer and why your potential customer would want to buy it. Consider the following questions:
What purpose does your product or service serve?
Is there anything wrong with their life that your product or service could help them solve?
What are the advantages of buying your goods or services? How does it benefit your potential consumer’s life?
Return to these answers whenever you’re lost in the minutia of your target market study. Allow them to be your guide while conducting your research.
Know Your Existing Customers
If you’re already generating a profit in your business, you have immediate access to your target customer. After all, since your present clients have already purchased from you, you can reasonably assume they will convert.
You may target more people similar to your current clientele with your marketing strategy once you recognize them. Examine your customer base for any patterns in their characteristics, such as demographic or psychographic data like:
Age – What is the typical age range of your existing customers? This information will come in handy when determining your target segment for social media advertisements.
Gender – Are your customers primarily male or female? This may assist you in better comprehending their distinct requirements and desires, which may be gender-specific.
Income – What is the maximum amount of money your consumers can spend on your goods or services? Can they make repeat purchases, or do they need to save up for your product? Are there any financial restrictions that you must consider?
Location – What time zone are your customers in, and where do they live? What cultural issues do they face that are particular to their region (for example, advertisements for American football versus real football)?
Behavior – How do your consumers spend their time online? Which websites or brands do they follow, and which social media platform do they prefer? What material do your customers enjoy, and can you utilize it in your content marketing plan?
Lifestyle – What hobbies or activities do your consumers enjoy? What goods or services do they require to pursue those interests?
Values – What are the beliefs and values of your target audience? Is there a link between their brand loyalty and these beliefs and values?
This is the stage of developing a buyer persona. Start by dividing your target market into several target customers, also known as buyer personas.
Perhaps your target market is midsized firms wanting to buy sales performance management software. You might categorize your target consumers into several categories: finance department executives, sales leaders, founders, or CEOs.
What if I don’t have any customers?
No sweat! Check out the competition and their clients’ testimonials. From there, you’ll be able to reverse engineer a buyer persona for your own business. It also doesn’t hurt to reach out to these people for a 1:1 to discuss their opinions on your product’s niche.
Access Your Analytics
Knowing what content to post and where to share it is important for using ads or making a digital marketing plan. You can easily determine what type of material draws people to your website or social media. This will help you see what engages them with your content.
You may find a wealth of data in your website’s analytics dashboard and its social media platforms. Here are some of the apps we recommend using:
Know Your Competition
Examine your competition to see who they’re targeting within their specific target market. Look at their customer base to see if you can find a missing segment of the market that they may be neglecting.
Conducting a competitive analysis is the most effective approach. You’ll research to figure out who your competitors are, what they have to offer, and even how they sell.
Visit their website, blog, social media accounts, and advertisements in order of preference to see if you can figure out their target market strategy. Consider the following while investigating:
Can you figure out how they have segmented their clients?
What is their ideal customer profile?
Do they have a particular target industry or many different ones? What is it/are they, and why do you want to know about them?
What methods do they use for marketing their goods? What types of language do they utilize? What product characteristics are highlighted in their advertisements?
What is their typical publishing frequency? Do they send or publish emails regularly?
Looking at your competition can help you identify target market gaps that you may address. Are there any markets that they are ignoring?
This may encourage you to expand into new markets or develop new goods to cater to a different sector.
Product Features And Benefits
When conducting a target audience analysis, you should invest time in determining what motivates potential consumers to buy your goods.
This is after you’ve determined your target audience and before you begin trying to reach them. The aim is to:
Demand Generation involves using distribution channels and providing people with content that educates, informs, and changes their perceptions before they need a solution to their problems.
Lead Generation is to catch them in the decision-making process while they’re still trying to decide whether or not they want to buy anything.
The best approach is demonstrating how your solutions or services may help them improve their lives.
Many marketers talk about this in terms of product features vs. product benefits. The product feature is what the item or service is or performs. The result, as well as its influence on your potential consumers, is known as the benefit.
Let’s use Performio (Sales Performance Management Software) as an example. One of the product’s features is “Performance Reporting and Dashboards,” and the benefits are “better motivating your sales teams and agents by showing them all their performance metrics.”
What do their customers think?
Do salespeople find Performio easy to use? YES! Performio delivers on its promise to help reps improve and track performance.
Demonstrating how your product will benefit customers makes them more inclined to buy. Better marketing improves sales velocity and lowers customer acquisition costs.
If you aren’t yet clear on your product’s benefits, now is the time to make a list. List the top items you plan to advertise with Facebook and Instagram ads.
This approach will help you sell your items and identify your target audience.
As with Performio, the product has customers spending less time paying for performance and more time driving performance. Their target audience is businesses that are high-growth or enterprise organizations.
You’ll discover more about your target consumer if you grasp how your product benefits them.
Validate Value Proposition
Now that you’ve finished your audience study and have a clear image of your target consumer, it’s time to start advertising. Though search engine optimization (SEO) is the most effective marketing approach with the greatest return on investment, producing ads allows you to make quick progress while also providing you with a wealth of information.
You can start running Facebook and Instagram advertising quickly with Facebook Ads Manager. And if you’re not sure where to start placing advertisements, check out Audience Insights to see how your target audience compares to real-world Facebook users.
To begin, build a custom audience based on your research, then create variants of advertising for the same product.
You may also use the same ad on multiple audiences you develop with custom audiences. Spend around $5 per ad set to see how people respond, whether they click your ads or even buy your items. The goal is to test your advertisements and audiences until you discover the best combination that results in conversions.
Use this testing procedure regularly with each new product you want to market. If necessary, conduct further audience analysis to verify that your marketing reaches the correct people.
Examples of Target Markets in Technology
Apple’s Target Market
Isn’t there another company that straddles both the B2B and B2C markets? How can a company with such a broad client base identify a target market? Apple is the textbook example of innovation and product design.
But how does this relate to locating a target market? With so many different products, Apple has something for everyone. Here are two of their target markets:
Consumers: Apple still pays attention to technology enthusiasts, who have been with the brand for decades. By introducing new technology categories (including wearables, Apple TVs, and HomePods), Apple has demonstrated that it still provides value to this group. There’s also an ecosystem play in which having a set of Apple devices allows for greater interoperability among your tech.
Pro Users: Apple had seemingly forgotten why people bought the MacBook Pro in the first place, and professionals were delighted to remember it. Five years later, Apple delivered everything that the pros had requested.
Apple does not appear to exclude many people from its target market. It has positioned itself to benefit customers and businesses – even with the same items as the iPad. Its success can be attributed to its management’s ability to grasp the value of each part rather than excluding people from it.
Facebook’s Target Market
Facebook’s focus market has changed over time. In its early years, the company targeted college students in the United States. Now, Facebook targets a broader market and is viewed as a social media network primarily utilized by middle-aged (25-34 years) mobile-using adults in 157 countries.
Atlassian’s Target Market
Atlassian’s collaboration tools help developers and product leaders move projects from concept to completion, serving various industries, as noted on its “Customers” page. The company employs market segmentation to tailor its value propositions and messaging. For instance, it partners with notable firms in retail, recognizing that the same product can deliver different value to different client types.
Netflix’s Target Market
Instead of using one-size-fits-all ads, Netflix chose a different approach. They focused on building relationships with famous creators and gaining customer loyalty.
They constantly research their customers and give them precisely what they want. Netflix, for example, has focused on its audience and changed when necessary. It offers a wide range of streaming services.
They also allow word-of-mouth marketing to power their sales by letting it do so.
Types of Target Market Segmentation
Target market segmentation is dividing your audience into smaller, more focused groups. A clear target market statement is essential to encapsulate demographic, geographic, and interest-based specifics about the target market. It’s a broad idea that can take on many shapes and forms, including:
Firmographic segmentation: In B2B sales, companies are divided based on characteristics like company size or the number of employees.
Technographic segmentation: Dividing your target market according to what types of technology they have purchased.
Geographic segmentation: Dividing your target market according to geographic boundaries.
Demographic segmentation: Dividing your target market into groups based on variables such as income, education, race, gender, or profession.
Behavioral segmentation: Dividing your target market into segments based on behavioral biases and decision-making habits.
Psychographic segmentation: Dividing your market into groups based on personality traits, values, or beliefs.
Firmographic Segmentation
Dividing clients into groups based on similar corporate or organizational characteristics is known as firmographic segmentation. Firmographic data is gathered and analyzed like other types of segmentation. This helps us understand the needs and wants of our target audience.
The most common factors of firmographic segmentation are:
Industry
Company Size or Department Size
Location
Job Titles
Company Structure
Annual Revenue of Funding Round
Growth Rate
Analyzing competitors’ business pages can enhance your marketing strategy by revealing their advertising efforts and tone of voice. By targeting a firm by its name, you can gather insights from its social media without individually searching for customers.
Firmographic segmentation, like demographic segmentation, offers valuable insights to refine company policies. It focuses on consumer behaviors and preferences, helping businesses categorize B2B customers efficiently. This approach allows salespeople and marketers to save time and resources by accessing pre-segmented client data based on size, location, or revenue.
Better Resource Allocation
Firmographics may be readily added to the marketing process at a low cost, allowing marketers to meet their marketing objectives without spending much money.
It also helps you save time. Marketers may spend a significant amount of time learning about metrics at first. However, adopting firmographics will help them avoid wasting hours on unproductive leads in the long run by allowing them to skip learning about metrics for now. Instead, they’ll focus their efforts on more qualified prospects.
Better Interaction with Customers
Like any other form of segmentation, it may help companies develop a more personalized marketing strategy for their clients by drawing their attention.
One of the many ways Internet-based firms may improve consumer interactions and services by connecting more efficiently with their customers is by customizing communications and strategies.
Higher ROI and Better Targeting
Companies that want to sell products or services to the B2B market should understand firmographic data, such as size, structure, and market size. This will increase sales and revenue.
Technographic Segmentation
Technology companies can gain valuable insights from technographic data, which reflects an individual’s technology ownership and usage. This data is especially useful for B2B software firms in identifying ideal-fit leads.
Technographics focus on technology use among consumers, particularly young adults, and are often confused with the Technological age group. Data providers use a combination of data mining and curation to gather this information, allowing for audience segmentation. There are six distinct technographic profiles representing varying levels of engagement with technology.
Inactives: People with zero engagement. They don’t create content and have no intention of engaging with everyone else.
Spectators: People who don’t create content but will happily observe. Think people who consume content like videos, podcasts, and blog posts – without maintaining their social profile.
Joiners: People who maintain their online presence but do not distribute content.
Collectors: People who have a steady stream of content they consume and are beginning to engage, e.g., Likes, Tags, and Shares.
Critics: People who contribute their opinions to the content that others have created, e.g., leaving a comment to offering their contributions to a forum.
Conversationalists: People who can distribute content to a broad enough audience that creates engagement.
Creators: People who develop and distribute the content consumed by the technographic profiles beneath them.
Technographic segmentation may be pretty beneficial in a variety of ways thus far. There are several ways for businesses to use technographic segmentation. The company’s target audience, industry, and sales strategy will determine the best method. Here are a few examples of technographic segmentation:
Anticipating and timing prospect needs
Knowing when a firm uses particular hardware or software might signal the need for contact if you provide professional services. Instead of guessing what tools a firm uses or sending out your outreach at random, technographic data ensures you have all the necessary information to make a compelling sales call.
Improving sales efforts.
Technographic data can significantly enhance the entire sales process. By thoroughly comprehending your clients’ and prospects’ technology ownership and usage, your team may better prioritize their leads, reject poor-fit possibilities, and simplify outreach operations.
While this process can be automated, unless you’re getting 1,000s of leads daily, we recommend assigning the responsibility to someone on your team. If you need additional help, a junior data analyst job on Jooble can be a great starting point for those looking to support these strategies.
Anticipating and overcoming sales barriers.
With a firm grasp of your prospects’ technology infrastructure, you can enter any sales discussion with a clear view of their current state. If you’ve noticed recurring sales difficulties or questions that specific hardware or software users tend to ask, you may anticipate them beforehand.
Enter and expand new markets.
Technographics may reveal potential overlap you weren’t aware of before. Assume you spent a long time working in one industry and discovered that the same technological platform is used in another unrelated sector. It would appear natural to look into possibilities since it makes sense.
Gain a competitive advantage.
Technographic data may help you catch up with the competition in today’s noisy environment. More profound knowledge of your target consumers’ technology stack can help you deliver a more personalized, frictionless sales process that you couldn’t otherwise offer.
Improving marketing messaging.
If you have a thorough knowledge of your prospects and customers, you can produce highly targeted marketing messaging that your audience identifies with. Instead of making expansive claims or using broad phrases about the types of goods a prospect purchases, you may get more specific about their experiences and pain spots. As a result, you’ll see improved marketing conversions.
Geographic Segmentation
Geographic segmentation is the most basic type of market segmentation, and it may be the simplest to understand. However, there are still many applications for it that firms never consider.
Depending on your needs as a business, the size of the area you target should vary. On average, the larger the company, the bigger the places you’ll target. After all, targeting each postcode separately wasn’t cost-effective when many more people might benefit from your content.
In total, six factors have to be considered while geographic segmentation is implemented:
Location (country, state, city, ZIP code)
Timezone
Climate and season
Cultural preferences
Language
Population type and density (urban, suburban, exurban, or rural)
What’s excellent about Geographic Segmentation is:
Easy to implement – requires fewer data points.
Higher product relevancy – which improves user experience and builds trust.
Improved advertising effectiveness – which lowers customer acquisition costs.
Demographic Segmentation
Demographic segmentation classifies buyers by measurable traits like age, location, education, gender, profession, and marital status, often found on social media. In the sales process, various stakeholders with different demographics may align with your desired firmographic profile.
Start by identifying your target buyer’s firmographic profile, then detail the demographics of decision-makers and influencers. This allows for tailored communication.
For example, you could target recently married female C-suite executives in the Bay Area with an Instagram ad or reach out to 25-35-year-old engineering students on the East Coast.
Behavioral Segmentation
Behavioral segmentation is a marketing method that categorizes consumers into segments based on their behaviors when interacting with a firm or website.
Customers can be grouped in a variety of ways. For example, you might want to group them by:
Attitude towards your brand, product, or service,
How they use or interact with your app, website, or product,
Overall understanding and knowledge of your brand, application, product, service,
Purchasing tendencies, such as on buying discounted items or on special occasions.
Targeting customers based on behavioral data or non-traditional demographic and geographic segmentation methods extends marketing campaigns‘ effectiveness.
At the very least, behavioral segmentation gives marketers and company owners a more thorough knowledge of their target audience, allowing them to customize products or services to fit specific customer requirements.
The benefits of behavioral segmentation are:
Identifies the most engaged users – so you can focus on those most likely to make a purchase.
Improves messaging accuracy – so you can optimize your advertising budget and reduce customer acquisition costs.
Provides refined personalized experiences – to offer better customer experiences.
Builds brand loyalty – to help retain your client and build a community of evangelists to attract even more customers.
Psychographic Segmentation
Another method for organizing prospects and customers is psychographic segmentation. The following are some examples of psychological characteristics:
Personality traits
Attitude
Interests
Lifestyle
Values
Beliefs
Customer personality data enhances demographic insights, offering a fuller understanding of potential clients and their buying habits. This enables more effective messaging and better anticipation of prospects’ needs. Online activities are tracked, revealing insights about target audiences; for instance, liking Facebook pages can indicate personal beliefs and interests.
Companies using psychographic segmentation can create targeted, emotional messaging to engage audiences effectively.
Target exemplifies this by identifying purchasing behaviors among pregnant women and tailoring advertising accordingly. Previously reliant on purchasing data or lengthy surveys, brands now leverage big data and psychographic segmentation tools for immediate access to valuable insights.
How Sales and Marketing Teams Can Use Target Markets
Segmentation offers numerous benefits for salespeople, particularly in prospecting. When sales development representatives (SDRs) understand which consumers are likely to be interested in their product, cold leads can become warmer, allowing for more thoughtful sales messaging.
Additionally, segmentation aids in lead qualification by helping reps identify high-converting prospects early in the process.
Target market segmentation is crucial for distinguishing between prospects who need your product and those who do not due to various factors. It equips salespeople with the insights to explore new markets and capitalize on lucrative opportunities.
A fundamental principle of effective sales is a deep understanding of target markets; without thorough research and knowledge, businesses risk losing sales and limiting their potential.
Target Market FAQs
A target market is a specific group of people or businesses to whom a company aims to sell its products or services based on shared characteristics, needs, or interests.
Companies determine their target market by researching and analyzing their niche, customer preferences, market trends, and competitors. The goal is identifying the group most likely to purchase the company's offerings.
The primary target market is crucial because it's the main group of consumers or businesses on which a company focuses its marketing and sales efforts. This group represents the largest potential customer base and is most likely to buy the product or service.
Yes, businesses can segment their target markets based on various criteria, including demographic, geographic, psychographic, behavioral, and firmographic. Each type focuses on different characteristics, such as age, location, lifestyle, buying behavior, or company specifics.
A targeted market segment is a larger market subgroup with specific characteristics or needs. Companies identify these segments through research and analysis and tailor their marketing strategies to appeal to this group.
Businesses use two primary activities to reach their target market: demand generation and lead generation. Demand generation educates and informs potential customers, while lead generation captures potential customers during their decision-making process.
