No matter how great your products are or how effective your sales operation is, your business won’t enjoy much success if you market to an audience that just isn’t interested in what you have to offer. In other words, Floridians aren’t interested in buying snow plows, and steaks won’t appeal to vegans.
That’s why identifying the right target market for your business — and understanding the needs of buyers within that market — is such a foundational part of running an effective marketing operation.
This article explains what a target market is, demonstrates how to identify the best target audience for the products or services that you are marketing, and helps you learn to better understand your target market’s needs and desires to drive better marketing results.
What is a Target Market?
A target market refers to the segment of potential customers on whom a business focuses its marketing efforts — a specific portion of people derived from the broader customer base that the business has the ability to reach through its market initiatives.
By choosing to market only to a target market instead of to all reachable customers, businesses can avoid expending marketing resources on prospects who are unlikely to be converted because they are a poor fit for the product or services being offered. According to a 2020 analysis by HubSpot, audience targeting is among the most effective marketing optimization tactics.
For example, a company that offers home improvement services, such as new window or gutter installations, might have the potential to advertise to all residents of a given local area. In order to optimize its marketing outcomes, however, the company could focus on a target market of homeowners, since most people who rent instead of own their homes are not able to make decisions about installing the products the company offers.
To target this audience, the company could use a strategy such as social media ad campaigns to serve ads to users who fall within certain age and income brackets who would be more likely to own a home. Another approach would be to review tax records to determine which residences are owner-occupied, and then deploy a direct mail campaign to advertise to those households.
Why Should You Identify a Target Audience?
Choosing and catering to a target audience offers several advantages:
- Cost effective: Targeting your audience helps you increase conversion rates without placing more ads, running more campaigns, or increasing marketing spend. Given that the average conversion rate for a website can be as low as 2.35 percent, targeting your marketing efforts toward an audience that is most likely to be converted is an important step toward achieving higher conversion rates.
- Support sales: Market targeting helps you qualify leads from the start, which in turn strengthens your brand’s sales process. If you target random prospects, it’s likely the vast majority of them will not be interested in what you are selling or may not be qualified to make a purchasing decision, leaving you with many unqualified leads. If your sales team tries to convert these leads, they’ll only waste resources. In comparison, focusing on a target audience allows you to pass more qualified leads on to sales, which empowers them to close more deals.
- Improved brand image: A company that publicly markets products or services to uninterested or unqualified prospects may appear out of touch. This can harm the brand’s reputation and ultimately makes it more difficult to convert interested potential customers later on. On the contrary, if you prioritize targeting a particular audience and understanding their pain points and needs, you’ll seem more relevant, intuitive, and empathetic.
- Advertising cost reduction: Cost-per-click rates can add up to be hundreds of dollars in some industries, which is no small price. With targeted marketing, you can display ads only to users who are likely to be interested in them. That means you can run fewer ads, which lowers your marketing costs without reducing your conversion rates.
Considerations Before You Identify A Target Audience
In order to most effectively define a target market, you need to understand your own business and how it fits into the market you’re focused on. That means addressing the following questions before you commit to a target audience:
- What’s your value proposition? Knowing what you sell is not enough. You need to know what unique benefit you offer to customers and how that value sets your business apart from competitors.
- Who are your current customers? Understanding your existing customers goes a long way toward helping you identify which markets to target. While you won’t always market to prospects who exactly match the profiles of existing customers, they will help you set a baseline for determining which types of customers are most likely to be interested in your offerings. It will also help you further understand the pain points your customers might have, which your product could help them solve.
- Who is your competition? Understanding who your competitors target in their marketing will also give you insight on how to target in your own campaigns. Analyze competitors’ ads and other channels for messaging or placement cues that help you identify which markets they are most interested in reaching. While you may be able to also target additional markets that they may be overlooking, knowing what competitors are doing is a good place to start when designing your market targeting strategy.
Identify Your Target Market
With preliminary analysis of your business and market out of the way, you’re ready to begin identifying the best target market for the products or services that your business sells. This process will involve some guesswork, but it should be based on analysis of several specific factors that inform which audience is the best fit:
- Audience demographics: Characteristics such as gender and age often play a key role in determining the likelihood of a prospect to make a purchase.
- Audience income: Income can be an important qualifier for conversion. If you’re a B2B marketer, assessing your audience’s average income means determining how much revenue a company generates and whether it aligns with what you are selling. For B2C marketers, income-based audience targeting focuses on individual and household income data.
- Audience location: Some prospects may never make a purchase from you simply because you are too far away to serve their area. Establishing your marketing audience based on geographic location is especially important when working with online marketing channels, where marketing resources are often not geographically segmented by default.
- Audience psychographics: Psychographics refer to characteristics such as personality, opinion, or lifestyle. If you know that your best-fit buyers love the outdoors or belong to a certain religious group, for example, psychographic data may be helpful for your audience targeting.
Research Your Target Audience
After you’ve determined which audience to target, invest time in researching that audience’s preferences and behavioral trends in order to align your marketing campaigns with them. These insights will help you determine which marketing channels (such as online ads, social media campaigns or billboards) will be most effective for reaching your target audience. They can also help you determine which types of messaging will influence the audience with the most impact.
There are several ways to glean these insights about your target audience:
The most straightforward way to learn more is to create surveys that ask users in your target audience about themselves — buying preferences, what they like and don’t like to see in ads, and so on. Surveys will generate strong quantitative data on these topics.
The biggest downside of user surveys, however, is that because some users may choose not to complete them, the data may not be representative of your entire target audience.
Google Analytics and other data
Data that you collect from digital marketing channels through Google Analytics, AdWords, Facebook Analytics and similar platforms can provide powerful insights into your target audience’s behavior. It will show you information such as which days and times during the week your target users are most active and how much time they spend engaging with different marketing channels.
You may also be able to assess which types of marketing material or messaging they find most engaging, based on data regarding which parts of your website or social media resources they engage with most.
Social listening refers to analysis of your social media channels for feedback from users. Through compliments, complaints, and other mentions of your brand on social media, you can gain insight into what your target users like and dislike.
This data tends to be more qualitative than quantitative, so the extent to which it can drive data-based decision making is limited. Nonetheless, social listening is an effective method of gaining a general sense of how your target audience thinks and feels.
Using the findings from the research described above, you can build personas to guide your targeted marketing efforts. A marketing persona is a profile of an ideal customer you are trying to reach — it defines their demographics, such as "ages 31-40, married, male." It also identifies what the user's key goals are as they relate to your product offering and how you can help the user meet those goals.
Depending on the complexity of your target audience, you may need to create multiple personas to describe all of the customer types you hope to engage.
Tips for Creating Content that Connects to Your Target Audience Market Information
Once you know the marketing personas you are targeting, you can build marketing content tailored to their needs. Your content creation strategy should be tailored to the personas you are trying to reach.
Here are some things to remember as you build out this strategy:
Keep special audience traits in mind
The content you create should align closely with your audience's demographic, geographic, psychographic, or similar traits. If you are targeting prospects in a certain geographic area, for example, your content could incorporate references to local landmarks in order to increase engagement. Or, if your audience speaks a particular dialect, tailor your language accordingly.
Know your audience's platform
Your content should be designed to reach your target audience on the platforms where they prefer to engage. If your target customers are heavy users of social media, then social content is an obvious marketing channel to pursue. If prospects read the newspaper, place ads there. If they go to industry events, invest in marketing through that channel by setting up a booth or perhaps contributing a speaker to a relevant event.
Provide value to the user
Your content should do more than just push the user toward a conversion. It should provide genuine value, like teaching the user something new or explaining how they can get more use/benefit out of a product.
More than 92 percent of marketers agree that interactive content delivers the best results. Where possible, strive to create content that users can engage with collaboratively or interactively, such as a social media discussion.
Integrate your content
Marketing integration, which means using consistent branding, messaging, and style across all marketing content and channels, improves conversion rates while also making campaigns easier to manage. Strive to keep all your content consistent within each audience that you target.
Generating leads or convincing a prospect to buy usually requires multiple interactions. In fact, it takes eight touches on average before a customer converts. To deliver sustained, repeated engagement, you must be persistent in your marketing content efforts. Release new content regularly, adjusting your strategy as you go based on observations and feedback you receive from users.
Real-life Targeted Marketing Success Stories
3 Day Blinds targets audiences based on customer data
3 Day Blinds sells blinds to anyone with a window. That makes for a huge set of potential customers. However, not everyone who has a window wants the type of blind that the company offers.
By using data from its customer database to analyze data such as the style preferences and home layouts of existing customers, 3 Day Blinds was able to target its marketing efforts toward groups that were the best fit for its services based on their income levels and the numbers of rooms in their houses. The results included a 79-percent reduction in cost-per-booking and an 850 percent increase in leads per click.
Charles Schwab targets better leads
Charles Schwab manages a network of independent financial advisors. In the past, its marketing strategy for finding new advisors to join its network lacked the sophistication to match investors effectively with the types of clients the company aims to serve.
By overhauling its marketing platform and strategy, Schwab was able to focus on marketing to advisors who were the best fit for its business. The brand targeted independent advisors whose clients were interested in the types of financial products Schwab offers, and whose income aligned with those offerings. Schwab marketers personalized their engagement tactics and prioritized the alignment between their marketing and sales teams — this target marketing led to more qualified leads generated, and a 500 percent increase in engagement rates.
Use Marketing Automation to Target the Right Audiences
To identify the best target audiences and understand their needs most effectively, you need as much data about marketing performance and customer behavior as possible. You also need comprehensive visibility into the marketing and sales process.
Marketo Engage has a marketing automation platform that delivers these insights. By allowing you to map and measure customer journeys, analyze data about existing customers, personalize marketing content across channels and manage marketing budgets, Marketo empowers you to determine which audiences to target, understand the personas in them, and tailor your marketing campaigns to their needs — all at scale.
To see for yourself, request a free Marketo interactive tour.