target market

Discovering Your Ideal Target Market: A Strategic Approach

Kurt GraverBusiness Strategy, Startups & Entrepreneurship

Identifying your ideal target market is pivotal in developing an effective marketing strategy and business growth plan. You can create campaigns, products and services tailored to your best customers with the right targeting. This leads to higher conversion rates, increased customer lifetime value and overall business success.

This guide will give UK entrepreneurs a strategic approach to discovering their ideal target market.

Why Identifying Your Target Market Matters

Before launching any marketing campaign or product, it’s crucial to identify who your target audience is. This leads to:

  • More efficient use of marketing budget – Focusing spending on the channels and tactics that reach your best customers. The average return on investment for content marketing targeted to a well-defined audience is 728%, compared to 13% for broadly targeted content [1].
  • Enhanced customer understanding – Knowing your target audience fully lets you understand customer needs, challenges and motivations. You can develop deeply resonating products, services, and messaging with these insights.
  • Increased customer lifetime value – When you provide tailored solutions that align with your audience’s preferences, you foster higher satisfaction, loyalty and repeat purchasing. The likelihood of buying again increases by 140% when the customer feels understood [2].
  • Competitive differentiation – In saturated markets, effective targeting gives you an edge. You stand out from generic solutions by specialising in specific underserved customer needs.

In this guide, we will explore the strategic approach to identify your ideal UK target market, including:

  • Analysing your product fit
  • Leveraging market research
  • Understanding customer demographics and psychographics
  • Refining based on buyer personas and jobs-to-be-done framework
  • Tracking campaigns to the ideal target audience

Let’s begin the journey to discover your best customers.

Understanding Your Product Offerings

Analysing your product or service is the starting point for identifying your target audience. Features and benefits attract specific customer segments who will find value in them.

Assess key aspects like:

  • Core features and benefits – List out the components and capabilities of what you offer. How does each area solve problems or deliver value for customers? Some features will be crucial in attracting certain groups.
  • Price points – Pricing plays a major role in targeting. Luxury goods seek high-net-worth individuals, while budget options appeal to cost-conscious consumers.
  • Ideal customer needs – Which underserved customer needs does your offering cater to exceptionally well? Aligning to these specific gaps better positions you to help niche segments.
  • Market positioning – How you position against competitors also sways your audience. Factors like premium quality, cutting-edge innovation or exceptional service all resonate with particular demographics.

Adapting what you provide based on target audience data helps increase relevance.

Let’s look at two examples of UK small businesses and how their product offerings determine target markets:

Case Study 1 – A Luxury Watch Retailer

  • Offering – High-end Swiss watches ranging from £1000-£5000
  • Target audience – Primarily upper-class men aged 35-60 who value luxury accessories
  • Rationale – A particular product niche with a high price point. Suits an affluent demographic looking for premium Swiss craftsmanship and brand image.

Case Study 2 – Affordable IT Solutions

  • Offering – Low-cost IT troubleshooting and support
  • Target audience – Small business owners seeking affordable IT upgrades and maintenance
  • Rationale – Emphasis on budget and convenience aligns well with the cost-conscious small business segment.

Delve into your product attributes to identify attractive customer segments from the outset.

Conducting Market Research

While analysing your offerings provides a baseline for targeting, market research gives you external validation. Collecting empirical data directly from potential customers is invaluable.

79% of companies agree that data and market research should be the foundation of campaign development [3].

Useful market research techniques include:

  • Interviews – Have in-depth conversations with 20-30 existing or potential new customers. Identify patterns in needs, behaviours and preferences.
  • Focus groups – Facilitated discussions with 6-12 prospects. You can present concepts and gather feedback.
  • Surveys – Questionnaires sent to a broad sample. Provides quantitative data on attitudes, usage, demographics, etc.
  • Website analytics – Many analytic tools share who is already visiting your site. Assess location, ages, browsing habits, etc.
  • Social listening – Monitoring brand mentions and conversations on social media gives insight into audience interests and needs.

Look for consistent trends and themes that indicate an aligned target audience.

Let’s see some examples of implementing market research findings:

Case Study 3 – Water Filter Company

  • Offering: Subscription boxes with customisable water filters
  • Research method: Survey 300 homeowners
  • Key finding: 85% interested were 35-65 and environmentally-conscious
  • Target audience: Middle-aged eco-friendly homeowners

Case Study 4 – Stock SaaS Platform

  • Offering: Stock monitoring and notifications app
  • Research method: Interviews with an existing user base
  • Key finding: Over 80% were investors with £100K+ portfolios
  • Target audience: High net-worth investors and day traders

Market research should provide clarity on the best customer segments. Continuously conduct additional studies as you gather more data.

Analysing Demographics and Psychographics

Layering in demographic and psychographic analysis takes your targeting precision even further.

Demographic factors like age, gender, income and location indicate buyer likelihood. Psychographics, lifestyles, attitudes, and values reveal why customers purchase.

Key Demographics

  • Age – Certain products skew towards particular generation groups like millennials or baby boomers. Track user age ranges.
  • Gender – Men and women often have markedly different preferences and needs. Monitor your audience’s gender split.
  • Income – Disposable income impacts the ability and willingness to purchase higher-priced offerings.
  • Geography – Those located nearby can more readily visit physical premises. Assess user concentration by city and region.

Key Psychographics

  • Lifestyle – How audiences spend their time and their activities determines needs. Track patterns.
  • Values – Personal beliefs and causes that individuals connect with influence brand selection. Analyse the values mentioned.
  • Attitudes – Underlying mindsets around concepts like self-improvement, tradition or environmentalism also sway decisions.

Incorporating demographic and psychographic data refines your targeting for increased relevance.

Let’s look at two more small business examples:

Case Study 5 – Cycling Retailer

  • Offering – Regional marketplace for used bicycles and gear
  • Demographics – Predominantly 18-39-year-old males located in South West England
  • Psychographics – Environmentally conscious with active outdoor hobbies
  • Target audience – Young adult men in South West England with eco-friendly outdoor lifestyles

Case Study 6 – Short Break Company

  • Offering – Short-term holiday cottages and B&Bs in Central Wales
  • Demographics – 35-60 year old women
  • Psychographics – Enjoy authentic cultural experiences and relaxing vacations
  • Target audience – Middle-aged women seeking refreshing breaks immersed in Welsh culture

Fine-tuning based on detailed user attributes leads to highly personalised interactions.

Identifying Buyer Personas

Another framework that improves targeting is developing buyer personas – semi-fictional representations of your most valuable customer segments.

These 1-2 paragraph profiles describe the personas’ key demographics, needs, behaviours, objections and motivations.

Well-defined personas act as stand-ins for your customers and guide all marketing decisions. Campaigns, product functionality, content and design are developed based on appeals to the personas.

79% of businesses say buyer personas are essential for content creation [4].

To build buyer personas:

  • Conduct first-party research on best customers via interviews and surveys to identify attributes
  • Speak with customer-facing staff to gather insights from conversations and queries
  • Assess web analytics and social data on current high-value visitor behaviour
  • Map personas to your offerings, highlighting which products suit which individuals

Revisit and update details every quarter as more interactions occur.

Below are two buyer persona examples from UK small businesses:

Persona 1 – IT Company Customer

  • Name: Sarah
  • Demographics: 38 years old, lives in Manchester, marketing manager
  • Needs and behaviours: Busy career woman who needs her devices running efficiently to be productive at work
  • Objections: Concerns over high IT support costs
  • Motivations: Seeks convenient and affordable IT upgrades and troubleshooting from local provider

Persona 2 – Speciality Cheese Shop Customer

  • Name: Charlie
  • Demographics: 28-year-old young professional lives in central Edinburgh
  • Needs and behaviours: Passionate cook who regularly hosts dinner parties and wants to discover unique ingredients
  • Objections: Limited by grocery budgets
  • Motivations: Finds joy in elevating cooking with gourmet ingredients and impressing guests.

With defined personas, every marketing activity aims to resonate with and motivate these customer archetypes.

Utilising Jobs-To-Be-Done Framework

An additional approach called jobs-to-be-done further focuses your audience targeting by centring around goal achievement.

Rather than demographics or personas, jobs-to-be-done identifies the underlying objectives customers want to accomplish and the obstacles preventing progress. Products and services are then positioned around enabling the user to complete the job and achieve their goals [5].

Common reasons people “hire” solutions include:

  • Accomplish specific tasks
  • Address frustrations
  • Achieve ambitions or aspirations
  • Alleviate anxieties and concerns
  • Rectify shortcomings
  • Bond relationships
  • Manage perceptions

To apply jobs-to-be-done:

  • Pinpoint your audience’s struggles – What frustration or unmet need led them to your offering?
  • Articulate their desired outcome – What status or achievement are they hoping to attain?
  • Showcase how you enable job completion – How does your product empower them to fulfil their goal?

Messaging focused on helping individuals reach objectives and complete jobs resonates profoundly.

Continually Refining Based on Campaign Response

The final piece of effectively targeting your audience is continually analysing campaign responses to refine segments.

Set up tracking mechanisms to assess how defined groups interact with your content, ads and website. Metrics like click-through rate, time on site and conversion rate indicate engagement levels.

Monitor trends to identify high-performing clusters within your audience, indicating ideal subgroups. Also, uncover lagging groups that may need to be removed from targeting parameters due to low response.

Ongoing optimisation based on empirical campaign data allows you to continually evolve the definition of your “best customer” to those demonstrating desire and demand. These engaged segments then become priority targets for future initiatives.

Conclusion & Next Steps

We’ve explored the pivotal first step in any marketing plan – identifying your target audience. Targeting early on enables personalised interactions and higher conversions.

Now that you have a strategy to discover your ideal customers, here are the next steps:

  • Document target audience definitions in buyer personas and profiles for reference
  • Train marketing, sales and product teams on persona particulars
  • Audit existing content and campaigns against audience alignment
  • Set tracking mechanisms to gather ongoing audience data and response rates
  • Build future content, offers and site experiences with personas in mind

Remember, targeting is not a one-and-done task but rather an ongoing process. Continually refine based on new insights, additional research and campaign analytics. Keep the customer front and centre in all you do.

Now go find your ideal audience and dramatically drive business growth!

Sources

[1]: Demand Metric Content Marketing Infographic 

[2]: HBR – Stop Trying to Delight Your Customers 

[3]: Demand Metric Research 

[4]: Content Marketing Institute Research 

[5]: HBR – Know Your Customers’ Jobs to be Done