An unmarried young person might have a list—perhaps written or more likely unwritten—of what kind of person he or she wants to marry. This list might include attributes such as personality, interests, age, hair color, beliefs, background, and so on. Of course, when the right person comes along, some of the less significant qualities turn out to be negotiable!
Your business should have a list too—a list that defines what kind of customer you are trying to reach. What are the qualities of the customer who will be happy when “wedded” to your business? What are the attributes of customers who appreciate your product the most? What kinds of customers bring you the most profit?
Depending on the size and type of your business, your “list” will be more or less formal. Some companies are able to invest a lot of time and research into creating detailed descriptions of their customers. These descriptions are called customer personas—a detailed biography of a person representing an entire segment of the company’s customer base.
A smaller company may not have reached that level of detail yet, but even these businesses need to know at a basic level who their ideal customers are. Are they residential or commercial or agricultural? Large or midsize or small? Men or women? High budget or low budget?
Why you need to know your target market
We usually think of customers choosing us, but in effect, we have a role in choosing our customers. The group of prospective customers you are trying to reach is called your target market. Other similar terms we sometimes use are market niche (or niche market) and ideal customers. Some businesses serve more than one target market. At Rosewood Marketing our target market is Plain businesses who have been in business a few years and a yearly marketing budget of at least $35,000.
When an entrepreneur launches a new business, his passion and expertise are usually centered around the product that he designed or the service he created. He is less likely to be thinking about “Who is this product or service really for?” or “What type of person will give up hard-earned dollars for this product?”
But sooner or later the entrepreneur’s focus needs to turn from the product to the customer. No business sells to everyone. Customers need to choose who they will do business with. To thrive, a business needs to work to make itself attractive to a certain kind of customer—the kind of customer that it can serve the best while making a profit.
“We usually think of customers choosing us, but in effect, we have a role in choosing our customers.”
Good alignment between the business/product and the market makes each customer’s choice easier as they research their options. They will be drawn toward the business that best aligns with their problem or need or desire. They will also be more likely to make the right choice.
A doctor with a beautiful lawn in an upscale neighborhood will be drawn toward the lawncare service that presents itself as a team of professionals experienced in serving exclusive neighborhoods. The elderly lady with a small lawn will be drawn toward the lawncare service that presents itself as economical and efficient (or she might even hire her neighbor’s teenager).
In each case, the customer will be best served if the businesses involved are targeting the right market. It wouldn’t make sense for the fast and economical service to target premium lawns where prestige and appearance are more important considerations than speed or cost.
Understanding differences within your target market
One of Rosewood Marketing’s clients is an agricultural service and supply company called Michiana Equipment. Based in northern Indiana, Michiana builds and outfits barns for poultry and swine operations. They also offer solar installation and other ag solutions.
Who would you suppose is Michiana’s target market? Big commercial farms, for sure. However, Michiana also sells to hobby farmers and homesteaders. As you can imagine, these customers are quite different. A commercial operation has a completely different set of goals and needs than a homesteading family with a small flock. What is important to one is not important to another.
Rosewood helped Michiana divide their ideal customers into five categories. Each category is represented by a fictional representative customer. These personas have names that identify the category they stand for: Peter Plaingrower, Carson Growermann, Ivan Integrator, Holdyn and Holly Homesteader, and Harvey and Hannah Hobbyfarm.
The addition of Ivan Integrator to the list of customer personas is interesting. In the confinement farming industry, integrators are the big companies like Tyson Foods and Cargill who own the flocks, the feed mills, and the processing plants. The integrators don’t buy from Michiana, so why are they included as a customer persona?
The reason to include integrators as a customer persona is the integrator’s relationship with the producers who are Michiana’s customers. The integrators are in a position to advise the producers whether or not to buy equipment and installation from Michiana. If integrators believe that Michiana is a superior choice, Michiana will close that many more sales.
Having an in-depth understanding of the different segments of their customer base helps Michiana communicate in a way that appeals to each segment. In both the commercial and the small farm categories, Michiana serves non-Plain and Plain customer personas. Each persona may buy the same products, but they have different motivations.
Take Peter Plaingrower and Carson Growermann. Plaingrower’s operation enables a lifestyle he wants to preserve for his family. Growermann is also a family man, but his operation is a side hustle to bring in extra income to fund family vacations with his RV. Understanding these differences helps make Michiana’s ads more effective.
Results of focusing on your target market
Dialing in the focus of your binoculars helps you see details more clearly. Dialing in on the specific details of your market has benefits too. Many of these benefits have probably already come to your mind as you read this article.
Product development. Keeping your ear to the ground and listening to your customers can keep you from making expensive mistakes in product development. Instead, you’ll be able to develop products and services that your target market wants.
Accurate messaging. What aspects of your product does your target market find the most appealing? What result does your target market hope to achieve by using your product? What are common objections or questions someone in this market has about your product?
Knowing how your target market answers these questions helps you develop messaging that speaks directly to prospects. They’ll feel that you have the best solution because it matches most closely with what they are experiencing or what they are looking for.
“Knowing your target market helps you develop messaging that speaks directly to prospects.”
Channel choices. Having a defined target market helps you find marketing channels to reach your prospective customers. Which magazines do they read? What trade shows do they attend? Are they looking for solutions on the internet?
It doesn’t make sense to advertise on a highway billboard if most people passing by are not in your target market. Instead, you’ll look for avenues with a higher concentration of people who represent your ideal customer.
Customer lifetime value. Have you ever gone to an event and when you arrived, you thought, I feel out of place. I don’t really belong here. It is an uncomfortable feeling, and you probably left early and never went back.
That’s similar to the situation a customer finds themselves in when they purchase a product that they regret. Perhaps they didn’t do enough research, or maybe the marketing misled them into a purchase that they regret. If the product doesn’t work out for them, they will likely leave and not come back. On the flip side, a happy customer will come back for more, meaning a higher customer lifetime value for your business.
Filtering out distractions. There are many opportunities competing for your attention—new places to advertise, new products to develop, new ideas to pursue. Knowing your target market helps you filter out many of the ideas that come along because you are focused only on what is best for your market. You don’t need to feel pressured to pursue every idea that comes along.
A fisherman doesn’t go to just any puddle and throw in a line. Instead, he fishes only in bodies of water that contain fish. He knows what kind of fish inhabit a particular body of water, and he understands their habits and tastes. Armed with this knowledge, he chooses his fishing strategy and selects the lures that will be the most appealing to the kind of fish he wants to catch.
Many of us probably aren’t great fisherman—we simply enjoy the time out in God’s great nature. But even if you aren’t good at catching fish, you can be good at catching customers. You can grow your business based on what you learn in this article and previous articles from Rosewood. Do you know what kind of fish you are trying to catch? Are you fishing in the right pond with the right lures?