By Claudia Newcorn, SBDC Consultant
Do you really know your target audience and what motivates them to buy? If you don’t, then you’re missing out on revenue and profit opportunities.
Not knowing the wants and needs of your target audience reduces your ability to develop a product or service that provides solutions to their wants and needs. Add to that, your pricing, selling points, and promotional efforts may all be off the mark and hurt your ability to generate sales. Being off-target also means you are wasting a good portion of your advertising dollars because your message does not connect with and motivate your audience.
Figuring out your target audience
It’s important to understand your buyer – whether it’s direct-to-consumer or B2B. If you want to improve your return-on-marketing efforts, there are some basic steps you can take at minimal to no cost. Here are questions you should be able to answer, recognizing that your product or service may cater to multiple target audiences.
Demographics: In addition to influencing product/service development and pricing, these factors have a strong impact on your choice of advertising and communication vehicles, and the corresponding language and imagery.
- What precent of your customers fall within what age ranges? A 20+ year old does not make purchase decisions like a 40+ or 60+ year old.
- Income levels. Are they low-income, middle, affluent?
- Education. High school, some college, BA, MBA?
- Ethnicity- cultural factos influence purchasing behavior and customer loyalty.
- Religion-can determine what a customer can purchase, e.g. the Jewish faith with kosher food requirements.
- Gender-Men and women don’t make buying the decisions the same way (surprise!).
- Martial status- different decisions factor can weigh in when married vs. single.
Most of this free information is available through the U.S. Census Bureau online, and can be looked at nationally, regionally or locally. If your target audience is a business, you can also research industry trends and statistics that will influence the buying behavior of companies within that segment; such data is often available through trade publications.
Another powerful tool you have at your fingertips is the customer survey. Properly designed, you can gather a wealth of data about your target audience. But an important caveat: GIGO (garbage in-garbage out). If the survey isn’t correctly designed, the information may be of little use – or even worse, send you off in the wrong direction.
A final note
Target audiences are a moving target (no pun intended). Customers are constantly evolving in response to changing situations and stimuli. Examples: The Great Recession shrank consumer buying power. Technology and automation are shrinking demand for employees. A global economy means companies are forced to look beyond their country’s borders at both opportunities and competition.
As part of your business strategy, you should be re-evaluating your target audience at least once a year, and updating the profile of who they are and what motivates them. This will enable you to “course correct” your business, and develop well-targeted products, services and marketing outreach efforts that will connect with your existing and prospective customers, and improve revenues and profits.