When starting a new business, one of the first things an entrepreneur needs to determine is their target market. Having a great product or business model won’t do much good if it never reaches people who would be interested in paying for it. Target markets deeply inform marketing strategies, from the kinds of visual media developed to the tone of any written materials. Below are some steps to help find the best target market for a new business.
Ask Key Questions About the Product
One of the first steps is to examine the business’s product or service. Asking some basic questions about what kinds of problems it might solve, what types of interests it might appeal to, and the environment in which it would be used will help give some general clarity on what kind of a market should be targeted. For example, if the product is a financial planning app for managing personal finances, the target market will likely include young adults and families with access to smartphones.
Examine Existing Customer Base
Depending on what stage of development the business is in, it may already have some existing customers or potential clients who have expressed interest. This is a great group to analyze and can help narrow down some demographics that might be worth focusing on. Business owners can also consider sending out polls or surveys to these groups to gain more insight into what attracts them to the product or service.
Research Competitors
After looking internally, it can be helpful to turn the focus outward to competitors in the industry. Ideally, a new business will offer unique features or a twist on similar products, likely leading to a slightly different target market than competitors. However, there will probably be some overlap, so looking at competitors’ customer bases and comparing their marketing strategies can be a great way to gain insight and inspiration.
Develop a Persona
As one of the final steps, startup founders should develop a customer persona–or several! This is the process of creating a fictitious persona that embodies the interests and demographics of the determined target market. Some products may cater to a wide range of customers, so making a few different personas can be a helpful tool. Personas are a great way to guide marketing strategy by ensuring that advertising methods appeal to the market in question.
In addition to these steps, there are tons of excellent resources that can help narrow down a target market. Entrepreneurs should also consider reaching out to others in their network who have successfully gone through this process before! Choosing the right target market can have dramatic effects on the overall success of a business, so take time to give this process the attention it deserves.