Welcome to our new 6-week blog series, the Marketing Map Tutorial. Every week, we'll go in depth into one of the elements of a successful marketing plan to help your business flourish. This week, we'll start with the most important part of any marketing initiative: the target market.
What's a target market?
Your target market is the group of people who are buying and using your products and services. Anything you do in regards to your marketing should be designed to reach this group of people in some way. A target market should be large enough to sustain your business, while still being realistic in size.
Don’t be general when creating a target market. Rather than say you're targeting males that are aged 20-35, target males aged 20-35 that live within a geographical area who are interested in something that relates to your product or service. There are great resources available that can help you determine the size of your target market. One such resource is StatsCanada.
Researching your target market
When using large resources like StatsCanada, it's important to keep in mind that much of the information can be several years out of date. This is when you need to get creative. Rather than just using a 2011 population figure, try to reference that figure with community growth numbers to get a more accurate population.
For example, if you are dealing with a population that was 40,000 people in 2011, and you know that the municipal website states that the community has increased by 15% since 2010, it is reasonable to prorate that percentage into 12% since 2011. Obviously any information won’t be exact since populations are constantly fluctuating, but it is better to have an informed estimation rather than no estimation at all.
Building buyer personas
If you're having trouble deciding what your target market is, think of using buyer personas. At its core, a buyer persona should be the average person that is visiting your business. Personas are an important part of any marketer’s tool box, and should be used whenever you're deciding on a target market.
A buyer persona can be anyone that uses your business to fill a need. It is ideal to have around 3 or 4 different personas, depending on the variety of services you offer. Personas can be a huge help in deciding what primary markets you should be spending your time and money reaching, and what markets won’t be worth reaching out to. Not all customers are created equal, and buyer personas help to separate your devoted customers from those who come by every other week and spend minimally.
Imagine a coffee shop, “Best Bean”. Best Bean has started creating buyer personas and has decided that its customer spending behavior can be summed up with 4 different types of customers:
- The Platinum Customer: Visits two to three times a day and spends roughly $5-$15 per visit. This subset is likely small, and any marketing that reaches them will be unnecessary since they are already our top customers.
- The Gold Customer: This customer visits one to two times a day, and spends $3-$10 per visit. This customer is loyal, but will not hesitate to go somewhere else if another shop offers better prices or products. The marketing goal with this customer should be to elevate them to the Platinum level, or at the very least try to create more brand loyalty to prevent them from going anywhere else for their coffee.
- The Silver Customer: The Silver customer is somebody that visits once a day or two, and spends $2-$5 per visit. The end goal for this customer is to move them to the Gold level. A good starting point would be to try and increase their visit frequency to once a day, and to try to increase their spending threshold.
- The Bronze Customer: The Bronze customer visits the shop once or twice a week, and likely spends $2-$5. Their brand engagement and loyalty is minimal; in other words, if the shop was to close, it would not really impact them. This customer needs special attention with marketing, as they most likely align with customers that don’t visit the shop at all.
Now that the four basic personas have been created, what are they like as people? What are their interests other than visiting your shop? Any similarities that you can draw between the four levels of customer engagement can be used in your marketing for great effect.
Best Bean has decided that all four of their customers enjoy reading as a hobby. Because of this, Best Bean has purchased advertising at the bus stop outside of a nearby book store. It has also purchased advertising through Google for searches relating to coffee shops, book shops, and libraries. This ensures that Best Bean will be reaching all four of its personas with one advertisement.
When building buyer personas, it's important to think about the motivation behind their using your product or service. In the case of Best Bean, it’s possible that the Gold Customer visits just because they work nearby and they don’t really care what shop they visit, as long as it’s convenient. The Gold Customer might only get a few minutes to slip out of the office, and the Best Bean is the fastest place to go. In this situation, it could be beneficial to offer a frequent visitors card that offers a small discount to high volume buyers. This will help drive brand engagement and can also be used to drive your customers to visit more often to take advantage of the card. Customers that visit every day could start coming in twice a day, and customers that rarely visit could be encouraged to start visiting more often.
Once you have identified your target market and buyer personas, you should begin thinking about what your product or service does for them. What keeps people coming back to you? It is unlikely that you exist in a monopoly, so what makes your business preferable over your competitor down the street? This will be covered in next week’s post, where we will cover your value proposition and how to choose what channel is the most effective for reaching your target market.
Ready for the next step? See the Marketing Map Tutorial Part 2: Value Proposition.
What's your experience with researching target markets and developing buyer personas? Have any tips for our community? Let us know in the comments below!