6 Steps: How to Find Your Most Profitable Customer & Target Market

Identifying the ideal customers of a product is one of the most critical aspects of sales. Whether you are an entrepreneur or working in an established business it is critical that you identify the most profitable potential customers for your product. Your understanding of your target market will be the basis of your following decisions:

• Nature, type, and budget of advertising
• Price of the product
• Features and positioning statement
• Channels and method of product distribution
• Quotas for marketing, sales and product team

The above list shows a gist of how important it is to understand our target market. This step of sales however nominal it sounds is the basis of every decision relating to a product or service. Considering the criticality of the subject it is important that you do it right and we are here to ensure that. Here is a step by step approach to finding your ideal customer:

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How to Find Your Target Market:

1. Start with Why

Simon Sinek, author of “Start with Why”, highlighted that the values of a company and the core reason behind creating a product or service is the basis of entire marketing and management activities. If you know why you created a said product that means that you have vaguely defined your target market already.

2. What do you offer

Of course, your core product is the key identifier of the target market. For instance, for a lead management solution, the key target market could be startup entrepreneurs and marketers in mid-size companies. Ultimately your offering determines the people who are most likely to benefit from the solution and those who have the paying capacity to afford it.

3. Check your competition:

If you have an already established competitor(s) in the market then it is important that you differentiate yourself else you won’t stand a chance against your competitor who can tackle you because of bigger and better resources at their disposal. For instance, with Google in the game it almost impractical to even think of becoming successful with a search engine for the similar audience. To counter this issue DuckDuckGo came up with ‘anonymized search’ which offers similar results as Google but does not track user activities to the extent that Google does (or at least they say so).

4. Identify Key Demographics:

A rough idea of a customer only gives a half picture. The next two steps focus on drilling down on the target market so that you can come up with some useful information for your target audience. First, you need to identify the key demographics which include:

• Age - Children, teenagers, Young Adults, Middle Age, Elderly
• Location - Countries, regions, cities etc.
• Gender - Male, Female
• Income level - The band of income lower, middle, or rich.
• Education level - The level of qualification obtained by the person
• Marital or family status - Single, Married, Divorced
• Occupation - Working in a Job, Not working, Entrepreneur

5. Interest Matters

It is not just the demographics but also the psychographics of your market that will influence your marketing decisions, sales pitch, collateral, communication etc. Hence while we are on the subject it's for the best we do the job well and get insights on following attributes as well:

• Personality
• Lifestyles
• Hobbies/interests
• Attitudes
• Values
• Likes/dislikes
• Behavior

6. Solidify Decisions with Data:

Chances are you might not be able to find information about many of the above attributes. There might be certain aspects on which you might not find any relevant data or maybe you just made a calculated guess. But when there are decisions that would influence the entire lifecycle of your product it is best to back intuitions with data. For data on the target market, you can refer to already conducted surveys or do some statistical studies yourself. Social media can also be a good source of information as you can scrape information from most of the networks.

A Sample Target Market:

Let’s see the target market for iPhone - a product that has a proven track record of success in every sphere of marketing:

Did you select the right market?

Once you have determined your ideal customer simply go through this checklist to ensure that you have selected the right target market for your product.

• Is the market big enough for making profits for the company?
• Does the target market benefit from the product? If yes, then to what extent?
• Does the company have knowledge of how to influence the decisions of the target market?
• Can the market afford your product/service?
• Is it possible to economically reach the people?

Once you have defined your target market you have successfully completed the first step of creating a target market. Now it is time to move our next chapter - Preparing Brand Messages.

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