How to Analyze Your Target Market
Today's ever-increasing number of analytics tools helps you slice and dice data any number of ways. For example, you can use available data to better understand potential customers that may benefit from your product or service. This group is commonly known as your target market or target audience.
Why take a targeted approach to marketing?
Reaching this specific group could help sustain or grow your revenue, depending on how you reach out to them. While it sounds straightforward, it is not as easy as you think. That's because they are scattered among thousands of people that are not your target market. Just putting your product or service out there and hoping the right people see it can waste time and money.
Instead of the shotgun approach to marketing that was used with so many traditional marketing channels, doing a target market analysis takes precise aim at where you want to direct your online and offline marketing campaigns. As part of the analysis, you will create a target market segmentation because you will most likely have more than one type of potential customer that could benefit from your product or service.
The who and what of a target market analysis
Your target market analysis must include the who, what, when, where, why, and how components that will direct the type of data you collect and assess. Here is how to break out those various components of a target market analysis:
- The "who" is your potential customer. To truly know them, you need to fully describe them by their age range, gender, occupation, education, and any other descriptor that defines those segments.
- The "what" is the motivational factor that inspires this target audience. This could be their interests, values, hobbies, and overall needs. When you define the "what," it should also include what aspects of your product or service that would engage with this motivation. You can do this by determining what problem your product or service can solve.
The when, where, why, and how components
- The "when" is the time period when they are most likely going to buy your product or service. This could be a specific time like a month or week. However, it could also include the frequency to determine if they fit into a subscription purchase model. Then, when it comes to marketing to this target market, there is also a specific day and time of the day as well as location or channel that would also need to be determined.
- The "where" includes the geographic location for their home and work as well as information about that area, such as population, climate, average income and economic health.
- The "why" determines why this target audience might decide to buy from you versus a competitor. Therefore, this aspect of the target market involves competitor analysis.
- The "how" is to analyze how your customers might act, including their lifestyle choices and purchasing habits.
These should frame the way you approach your target market analysis. Now, it's time to go deeper on how you conduct each part of the analysis by looking at specific best practices.
Other best practices for a target market analysis
One of the most important things you should do is to focus on what the data tells you rather than making any type of assumptions. While you can get some general ideas about what your audience wants and needs, it doesn't give you the whole picture. And, if you didn't look beyond the general idea you already had, you would be missing opportunities and potentially be investing in campaigns that miss the mark.
Before analyzing any aspect of the framework listed above, prepare for the analysis by doing initial research. Then, prepare specific questions to ask that audience that will collect that who, what, when, where, why, and how data you are seeking.
Actions to take in relation to target market analysis
Some of the ways you can take to get this data and analyze it include:
- Run social media ads and use the analytics they provide to help create the customer profiles, personas, and market segments.
- Use many available online resources to get target market analysis has already been done for you. Some examples include Quantcast and Google Trends.
- Track what your competition is doing by focusing on their marketing positioning, pricing, reviews, and customer conversations on social media. This can tell you if you want to continue focusing on the same target market segment as the competition if there are identifiable weaknesses or if it makes more sense to go in a different direction.
- Conduct primary research by going to straight to the segments you want to analyze. Tactics include online and offline surveys, interviews, and focus groups. While you may have to offer some type of reward or incentive for their time, directly asking your potential audience pays off with very specific and detailed information.
Ongoing target market analysis
Lastly, your target audience is not static. It will be forever changing. Because it is dynamic, you will need to continually re-evaluate and possibly change that target market in the near future. For example, you may decide to expand internationally. Or, you may want to diversify by developing a new product focused on men. Whatever you choose to do, regularly conduct a target market analysis to see if it makes sense.
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