Target Your Market or Get Lost (in the shuffle) - Part 2
The Importance of Analyzing and Maintaining Your Target Market
Trying to reach out to multiple audiences at once with a single message or a smaller market segment with multiple messages can both be a waste of time, money, and resources. It is crucial companies determine their target market by understanding their goals, needs, and values. Utilizing a proto persona exercise, such as the one I have provided in the tools section, can help organize customer information discussed in Pt 1 as well as possible company actions and reactions.
The key in selecting the target market, besides fitting with the customers, is to have one that is small enough to be able to make traction but large enough to have enough revenues to maintain financial viability. Examples of such starts include:
Under Armour started by marketing compression shirts to a small group of football players.
Amazon initially targeted book buyers who were comfortable buying their books online.
As these brands began to grow, many new individuals started to show interest. The company’s new campaigns then were able to target new markets and expand gradually.
It seems almost paradoxical that by narrowing the sales audience would actually increase revenues and profits, but it is true. Smaller markets are clearer to target, reach, and communicate with. Basically, becoming and staying one of the larger fish in a small pond is better than consistently being a tiny fish in huge pond. Less is better, because you will be able to improve your chances to get a customer by focusing on their pain point or point of need.
Efficient use of resources By effectively matching the market to the company’s messaging and actions, it will help leaders utilize resources efficiently. Marketing analytics are on the rise and increasing revenues from each dollar spent is important data. Customer acquisition costs, click-through and conversation rates, and other metrics are critical feedback to help companies make data-driven decisions and maximize results (i.e. revenues over costs).
Customer’s needs are addressed
“Don’t give people what they want, give them what they need.”― Joss Whedon
When target audiences are properly defined and segmented, and the marketing campaigns meet their proto personnas, it becomes easier to assess customers’ needs and better innovate solutions. Customers are not always as cognizant about their needs as they are about their wants. Good market research, proper product development and testing, and effective marketing can address the gap between wants and needs. For instance:
“If I had asked people what they wanted, they would have said faster horses” – Henry Ford
Addressing the needs of your target audience will provide them with value and result in reduced pain points or complaints. Such value-add would also create more “want” in others which can drive sales and growth.
Customer retention Customers change their preferences and desires over time and can result in increasing churn rates. Businesses should never underestimate the power of a loyal customer. According to Brandongaille, 12 to 15% of customers who are loyal to a single retailer represent 55 to 70% of sales. Once a company is familiar with its market and up-to-date on their trends, businesses can work to retain current customers, as well as entice new customers. For instance, by offering specific discounts and offers that result in repurchases or new purchases, a company can maintain loyalty while also increasing brand awareness.
Businesses need to stay focused and calculate opportunity costs
Businesses who know who know their target market potential sometimes have two choices: stay the course and try to expand to larger segments within their market or pivot to take advantage of an opportunity. Any new opportunity for a company should be measured against any possible loss of loyal customers, such as how moving to a luxury segment might cause certain buyers who value cost above all else to leave due to price. The luxury pivot no longer meets their needs but may meet others', and that difference has a value that requires market research and analysis.
Bottom Line: Market knowledge is power in terms of determining needs versus wants, being able to access new customers, and analyzing potential opportunity costs. Marketing is expensive, so making ever dollar count is critical.
 https://marketingcraft.getcraft.com/en-articles/the-importance-of-choosing-the-right-target-market for-your-campaign https://www.goodreads.com/quotes/tag/needs#:~:text=%E2%80%9CAfter%20nourishment%2C%20shelter%20and%20companionship,need%20most%20in%20the%20world.%E2%80%9D&text=%E2%80%9CThe%20irony%20is%20that%20while,Him%20most%20of%20the%20time.%E2%80%9D&text=%E2%80%9CDon't%20give%20people%20what,give%20them%20what%20they%20need.%E2%80%9D  https://brandongaille.com/25-surprising-customer-loyalty-statistics/