Customers are the lifeblood of any business, and knowing them is vital to your go-to-market strategy. You must ask yourself, “Who would be a good fit for my product? And what are their interests and priorities?” These questions might help you decide which contracts you’re most likely to win. But, precisely, how do you identify a target market, and what exactly is it?
Let’s look at what a target market is, analyze, see some helpful examples, go through target market segmentation, and how sales teams can get stakeholder buy-in.
Target Market Definition
A target market is a group of people for whom your products and services are intended. Typically, it’s established by industry, representing a specific part of the larger market that the sector covers. It’s usually determined by behavioral patterns, geographic location, and demographic variables.
Let’s assume you’ve developed a B2B software product that automates the calculation of sales commissions. You’d presumably concentrate on businesses that pay cash incentives with more than 20 salespeople in this scenario.
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 approach that focuses on your ideal customer’s demographic, psychographic, and behavioral variables to improve sales performance. To do so, you must first figure out who your target market is 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 that case, this isn’t the same thing as it is for a large telecommunications corporation 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’ll design a marketing plan that works if you know who your products and services are and how to locate them.
Analyze Your Niche
Whatever you’re offering, it’s most valuable to a very particular set of people. Take a look at what you’re selling and why you’re selling it to understand your niche. 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 service? 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, that means you have immediate access to your target audience. After all, since your present clients have already purchased with you, you can reasonably assume they 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? Are they able to make repeat purchases, or do they need to save up for your product? Are there any financial restrictions in place 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 publish it is critical to employ ads or create a digital marketing plan. This is simple to figure out by looking at what type of material attracts people to your website or social media profile and engages with your content.
You’ll find may find a wealth of data in your website’s analytics dashboard, as well as on its social media platforms. Here are some of the apps we recommend using:
Know Your Competition
Examine your competition to see who they’re aiming at. Take a 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 to do so. 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 assist you in identifying target market gaps that you may address. Are there any markets where they aren’t paying attention to?
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 to figure out what motivates potential consumers to buy your goods.
This is after you’ve determined who your target audience is and before you begin making efforts to reach them. The aim is to:
- Demand Generation is to use distribution channels and provide people 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 to demonstrate 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 motivate your sales teams and agents by showing them all their performance metrics.”
What do their customers think?
Do salespeople really find Performio easy to use? YES! Performio delivers on its promise to help reps improve and track performance.
Customers are more inclined to buy your product if you demonstrate how it will benefit them. Better marketing, in a nutshell, improves your 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. Make a list of your top items that you plan to advertise with Facebook and Instagram ads.
Not only will this approach assist you in selling your items, but it will also aid you in identifying your target audience.
As in the case 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 who your target consumer is, 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 out your advertisements and audiences until you discover the best combination that results in conversions.
Use this testing procedure regularly and with each new product you want to market. Also, if required, conduct further audience analysis to verify that your marketing is reaching 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 remind it. Five years later, Apple has delivered on everything those pros said they wanted.
Apple does not appear to exclude many people from its target market. It has positioned itself to benefit both 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 them.
Facebook’s Target Market
The focus market for Facebook has changed over time. The company targeted college students in the United States in its early years. Facebook now 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.
IBM’s Target Market
IBM is changing part of its sales organization to target the small-to-midsized business sector better. IBM will break down its Systems and Technology Group (STG) into two separate sales teams: selling to large enterprise customers and selling to SMBs. They are classified as company clients with fewer than 1,000 employees.
Atlassian’s Target Market
Atlassian’s suite of collaboration tools is designed to assist developers and product leaders in taking their projects from concept to completion. On their “Customers” page, you’ll discover that it serves a variety of industries.
Like other large firms, Atlassian uses target market segmentation to analyze various markets and distinguish between its distinct value propositions, language, and values. When we look at one sector, such as retail, we find that they’re linked with several prominent firms – especially in terms of customer support products.
Atlassian can work with almost any developer, but it recognizes the market segment in which its value proposition varies. Even the same product for two different client types generates varying levels of value.
Netflix’s Target Market
Rather than attempting to reach their target market through one-size-fits-all advertising, Netflix took a different tack: fostering relationships with renowned creators and building customer loyalty.
They constantly research their customers and give them precisely what they want. Netflix, for example, has notoriously leaned into its audience and pivoted when needed by offering 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
The process of categorizing your target audience into smaller, more focused groups (or segments) is known as target market segmentation. It’s a broad idea that can take on many shapes and forms, including:
- Firmographic segmentation: B2B sales specifically, B2B 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.
The practice of dividing clients into groups based on similar corporate or organization characteristics is known as firmographic segmentation. Firmographic data is collected and assessed in the same way as other sorts of segmentation to understand the needs and wants of the target audience.
The most common factors of firmographic segmentation are:
- Company Size or Department Size
- Job Titles
- Company Structure
- Annual Revenue of Funding Round
- Growth Rate
Mapping your competitors’ business pages to understand their marketing and advertising efforts, as well as the company’s tone of voice, is an excellent way to begin analyzing how you might improve. By targeting a firm based on its name (or trade name), you can find out what it does and learn more about potential customers through their social media feeds without having to seek them out one by one.
Like demographic segmentation, Firmographic segmentation provides essential insights about prospects to shape and advance company policies. However, firms employing firmographic segmentation should consider that demographic segmentation is a crucial division.
Firmographics are concerned with analyzing consumer behaviors and preferences. Their main goal is to assist businesses in segmenting prospective B2B customers into relevant categories. Salespeople and marketers may save time and money by having access to pre-segmented client data on each potential customer’s size, location, or revenue classification. Here are a few reasons why firmographic segmentation is proper:
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 prospects who are more qualified.
Better Interaction with Customers
Like any other form of segmentation, it may aid companies in developing a more personalized marketing strategy for their clients by drawing their attention.
Customizing communications and strategies is one of the many ways that Internet-based firms may improve consumer interactions and services by connecting more efficiently with their customers.
Higher ROI and Better Targeting
Companies that want to sell products or services to the B2B market should understand the firmographic data, such as size, structure, and market size. As a result, sales and revenue will increase.
Technology companies can learn a lot from Technographics data. A person’s technographic profile is the sum of their technology ownership and use.
The data is particularly beneficial for B2B software and technological firms. While other sectors might be evaluated on various actions, technology features are most advantageous to these businesses in qualifying ideal-fit leads.
The Technographics measure the use of technology to reach consumers, especially in young adulthood. The Technographics are frequently confused with the similarly named Technological age group. Most data providers rely on a mix of data mining and curation to acquire information about people’s technological usage. Users may then segment their audience based on specific verticals.
Individuals may be classified into six distinct technographic profiles. These six types are regarded as a ladder, with each rung representing a progressively deeper relationship with technology. Individual technographic profiles range from least to most active, including:
- 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 most excellent method will be determined by the company’s target audience, industry, and sales strategy. 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 is using or sending out your outreach at random, technographic data ensures that you have all the necessary information to make a compelling sales call.
Improving sales efforts.
The Technographic data can significantly enhance the entire sales process. Your team may better prioritize their leads, reject poor-fit possibilities, and simplify outreach operations by thoroughly comprehending both your clients’ and prospects’ technology ownership and usage.
Anticipating and overcoming sales barriers.
With a firm grasp on 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 ahead of time.
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 then discovered that the same technological platform is also used in another, completely unrelated sector. It would appear natural for you 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.
You can produce highly targeted marketing messaging that your audience identifies with if you have a thorough knowledge of your prospects and customers. Instead of making expansive claims or using broad phrases about the types of goods a prospect purchases, you may get more specific in terms of their experiences and pain spots. As a result, you’ll see improved marketing conversions.
The most basic type of market segmentation is geographic segmentation, which may be the simplest to understand. However, there are still a lot of 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 be targeting. 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)
- Climate and season
- Cultural preferences
- 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 is the process of classifying buyers or end-users by measurable characteristics. Age, location, education, gender, profession, and marital status are just a few examples of such traits. This information is usually easy to come by. Most people provide their demographic data on their social media profiles openly.
There are frequently numerous stakeholders involved in the sales process at any firm. Consequently, there will likely be stakeholders with various demographic characteristics for each organization that matches your sought-after firmographic profile.
The first step in demographic segmentation is to figure out your target buyer’s firmographic profile. You can then find the demographics of specific buyers at that business from there. Many stakeholders may be involved in technology procurement decisions depending on the company’s size.
Begin by detailing the demographic characteristics of your decision-makers, influencers, and end-users. You may then target those people with customized communication through demographic segmentation.
Market segmentation may be as simple as targeting recently married, female C-suite executives in the Bay Area with an Instagram ad campaign or correspondence to 25-35-year-old engineering students on the East Coast.
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 extend marketing campaigns’ effectiveness.
At the very least, behavioral segmentation provides marketers and company owners with 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.
Another method for organizing prospects and customers is psychographic segmentation. The following are some examples of psychological characteristics:
- Personality traits
Data from your customer’s personalities can be used to supplement demographic information to provide a more comprehensive picture of your potential clients and their buying practices. This allows you to develop more effective messaging and anticipate your prospects’ requirements more accurately.
Today, virtually all users’ online activities are monitored and categorized. You may obtain insights about your target audience by utilizing this data. Simply “liking” a few Facebook pages, for example, might reveal your political affiliation, family life, personal interests, religious beliefs, and more.
The ability to develop targeted, emotive messaging to connect with and engage their audience on the right platforms at the right moment is a benefit of organizations that employ psychographic segmentation.
Target is one of the most famous brands to employ psychographic segmentation. Their researchers noticed a few essential purchasing behaviors shared by pregnant women, such as stocking up on more supplements early in their pregnancy, buying unscented lotion in their second trimester, and so on. Once they established these trends, Target monitored other consumers making similar purchases and began sending tailored advertising their way.
As Target did above, brands used to be restricted to obtaining psychographic data from their purchasing or through lengthy questionnaires. Thanks to big data, several psychographic segmentation tools are available today, allowing you to access this information immediately.
How Sales and Marketing Teams Can Use Target Markets
Segmentation poses several advantages for salespeople. When conducting most sales process phases, you get a leg up if you know who will be most receptive to your product or service.
One of the most important reasons for this is that effective segmentation might significantly help prospecting. Suppose your SDRs have a good understanding of which sort of consumers are interested in your product. In that case, cold leads can become a little warmer – allowing those reps to make more thoughtfully planned use of your sales messaging when interacting with prospects.
Beyond that, segmentation may also assist with lead qualification. Knowing whether a prospect fulfills the requirements of a high-converting category gives reps an early advantage during that process.
You need a method for identifying a prospect who needs your product or service from one who doesn’t have the cognitive capabilities, where you are, or economic conditions to get anything out of it. Target market segmentation is the answer.
Target markets provide salespeople with the knowledge to break into new areas and sell successfully to them. Suppose you’re not keeping up with any developing markets that require your product or service. In that case, you may run into trouble regarding your sales potential and miss out on highly lucrative business possibilities.
One of the most basic principles of practical sales efforts is to understand your target markets inside and out. If you don’t conduct thorough research, pursue, and improve your knowledge of your target markets, you’re missing out on sales and putting yourself in a bind with your business potential.