How To Determine the Ideal Target Audience for a Business
Starting a business requires you to have an idea of who you want to sell your goods and services to. Without a researched market, you're likely to miss your perfect customers and clients. Finding the ideal target market requires more than industry knowledge — you need to conduct market research.
Market research is a valuable skill. It requires data insight and analytical thought. Unless you research the competition, your consumer needs, and more, you will miss out on opportunities for your new business. Developing a proper business plan for a consumer-focused business requires a well-researched market.
If you know your ideal target audience, you can identify potential problems and opportunities for later product development or service expansion. Discover how the core structure of your business plan can improve through dedicated market research.
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Making a Plan To Find Your Target Audience
Just as a business plan requires preparation, so does identifying a target audience. You'll need to pin down the pain points — specific problems faced by your customers — that your goods and services address. Once you've identified these pain points, you can develop research objectives.
Prioritize your research by most urgent needs. You can then gather relevant data and eventually gain valuable insights into customer purchasing behaviors. With these insights, you can make solid plans for your business's future growth.
Identifying the Problem
Selling to customer pain points is vital to your company's profitability. Your goal should be to identify them based on the unique needs of your target audience. Focus your research on:
- Purchase intent: groups with specific needs who need more information before purchase
- Interests: what people enjoy doing
- Subculture: groups with shared experiences
You can also segment your target audience into smaller groups by using specific segmentation parameters:
- Demographics: location, age, gender, education, income level
- Psychographics: lifestyle, personality, attitudes, values, beliefs
- Firmographics: industry, company revenue, number of employees
- Behavioral: product usage, purchase choices
Essentially, segmentation simplifies data analytics and lets you identify your ideal customer. Once you do that, you can plan your research objectives.
Develop a Plan Based on Research Objectives
Each of your research objectives should be specific, measurable, achievable, relevant, and time-based (SMART). This ensures that the scope of your market research is adequate.
When setting market research objectives, consider developing a list of questions. These can keep your objectives focused and specific, and can be helpful in identifying potential obstacles to your research. Consider the following potential issues:
- Important deadlines for important decisions
- Budgetary constraints
- Scope and size of the research plan
- Similar or competitive products
- Market size and limitations
There are many easy ways to do your research so that you obtain concrete data.
You have several tools available for collecting data. Let's look at a few:
- Social media analytics: scheduling and posting platforms offer engagement, interaction, and ad impressions
- Facebook Insights: gain specific insights about demographics of page visitors, such as location.
- Google Analytics: examine cross-channel information on site traffic, including search engine, email, and social traffic
- Site performance: analyze visits, click-throughs, page linger, and more from your web host, site manager, or through plug-in tools and apps
- Email campaigns: gather data on click-through rates, open rates, and other interactions from your email service.
Once you have gathered data, you can begin developing your plan. Here are a few examples of actionable market research items to include:
- Platform-specific observational data
- Polls and surveys
- Focus groups
- Focus groups
Data Reporting, Summary, and Testing
However you choose to collect your data, your next step requires you to analyze it. You will gain actionable insights into your target audience. Once you've gained these insights you can conduct marketing campaigns, develop sales strategies, and implement customer satisfaction techniques. You will see patterns and trends.
These patterns and trends will give you new ways to approach and connect with your target audience. You can then use segmentation strategies to identify your ideal customer and achieve your business goals.
Market Research's Impact on Profitability & Financial Stability
Market research generates data. This lets you develop budgets and identify project costs with more accuracy. In turn, profitability, return on investment (ROI), and financial stability improves.
Customer profiles that help you provide personalized offerings are worthwhile investments. They create expansion opportunities and overall growth potential for your business.
Successful Marketing Campaign Examples
Here are a few examples of successful, recent, data-driven marketing campaigns.
- USPS: The Operation Santa make-a-holiday campaign, which allows people to send gifts to answer kids' wishes, was met with resounding impact and donations.
- Amazon Prime: Amazon's first Prime Day had ads and deals so successful that they made it an annual sales event.
- Meta: Facebook's rebranding and introduction of the metaverse have seen Facebook stocks fall, but lots of hype about Meta's potential.
- Dos Equis: The "most interesting man in the world" became an icon and brand voice in one, increasing recognition and sales alike.
Ready to Start Your Business?
Once you know your target audience, it's time to start taking steps to make your business legal. Use our simple DIY business formation process to ensure you meet all the legal requirements in your state.