When you’re running a small business, taking time out of your already-packed day to identify your target market is probably the last thing on your mind. It may even feel like an extraneous step when you’re creating a marketing plan. After all, you know your customers like your product or service. But that knowledge isn’t enough.

When you precisely identify your target customer, you’ll be able to tailor your marketing efforts, products and services to speak directly to him/her. That way, you can build a loyal customer base that drives repeat sales.

Remember, your target customer doesn’t have to be an existing customer. In fact, they don’t even have to be aware that your business exists — yet. By having a clear picture of who your target market is, you’ll be able to create marketing plans that resonate with those qualified buyers and converts them to paying customers.

One of the best examples of effective target marketing (and niche marketing) I’ve seen was when I lived in Brooklyn, NY. I lived close to a trendy (and pricey) block with many outdoor sidewalk cafes, an artisanal cheese shop and themed bars that catered to 20 and 30 somethings with disposable incomes. A cobbler opened a shop on this street and marketed themselves to these young professionals (and hipsters with trust funds) who were buying expensive shoes that they needed to be repaired.
target market


Being a 20 something at the time — and needing some of my favorite shoes repaired — I didn’t think twice of walking into this store and paying an exorbitant amount of money to get my shoes fixed. This young cobbler identified his target market and created a persona for his business that appealed to this group. By taking the time to identify his target market, this cobbler not only gained the business of this demographic, but was also able to charge triple what his competitors (just a few blocks away) were charging.

By understanding your target audience, you level the playing field for your small business and will be able to compete with both large businesses and other local shops.

Why It’s Important To Define A Target Market

The word “define” is often thought of as putting boundaries or limitations on something. That being said, when we talk about defining your customers, we aren’t suggesting you cut customers that don’t fit into your target market mold out completely. Rather, we are simply suggesting that you have a description of this audience so that you can create marketing materials, products and services to best serve your core audience.

Defining your target customer will help you:

  • Determine if there is enough demand for your product or service
  • Adapt business plans to meet the needs of qualified buyers
  • Fine-tune your marketing efforts so that you reach the most qualified prospects (like the cobbler did with the trendy 20 and 30 somethings)

Defining your target market won’t place limitations on your business because you aren’t excluding consumers who could be potential buyers. Instead, you are focusing your money and efforts on a market that is more likely to buy from you. There’s a reason why Whole Foods doesn’t have a store in North Dakota yet — there isn’t a high enough demand for them to set-up shop — and it would be a waste of money.

Defining your target market will not limit your business. Understanding your target market will save you money, time, and effort because you’ll reach the right prospects for your business so that you can grow.

How To Define Your Target Market

Defining your target market boils down into identifying the specific characteristics of the people or businesses who are most likely to buy your product or service.

There are two different groups of criteria you should look at to begin getting an idea of your target market:

  1. Demographic
  2. Psychographic

target market demographic

The demographic criteria will basically consist of what makes up someone’s tax form. General demographic criteria consists of:

  • Age
  • Location
  • Gender
  • Income
  • Education
  • Family status
  • Occupation
  • Ethnicity

While it is important to know the demographic details about your market, it isn’t everything. Online insurance seller Esurance recently released a series of commercials that show why demographics aren’t quite enough:

Psychographic criteria lets you go deeper into what motivates and drives your customers.

This can contain (but isn’t exclusive to):

  • Interests
  • Hobbies
  • Values
  • Attitudes
  • Behaviors
  • Lifestyle preferences

After you put together what you think is your ideal customer base, take a look at your current customers and what motivates them to do business with you. This can help fine-tune your target market even more (or show you why your sales are not as high as you expected). Try to align what you understand as your target market with the customer base you already have as much as possible. However, if there’s a glaring difference in the two, don’t ignore it!

Next, take a look at your products or services and write down how each corresponds to the motives of your target customers. List the benefits each provides, why it is attractive to your target market and why this product or service is beneficial to your business.

It might feel like this is a tedious process (particularly for retail stores), but as your business grows and you continue this practice you’ll guarantee that any new products or services you introduce will be in-demand with your current market — or will allow you to expand your market.
business product benefits

Create A Specific Customer Profile

You now have a solid amount of information to create a customer profile. A customer profile describes the customers who have the need or desire for your product or service.

When creating a customer profile, you want to be as specific as possible. General descriptions, such as “new moms,” won’t help you focus your marketing enough because it covers too broad of an audience (after all, new moms could be anyone from a teenager to someone in their 40s, or even adoptive grandparents. Don’t make the mistake of being too broad in hopes of taking a larger chunk of the audience. By going broad, all you are doing is making it harder for yourself to effectively engage your true target market. Instead, factor in the criteria from your customer demographic, psychological profile and current base.

A local sports store in Braintree, MA may focus on marathon or endurance athletes between the ages of 20 and 50, who make at least $50,000/year, regularly train and compete, and are living within 10 miles of the store. While this target market may seem limiting, it actually helps weed out all the people who won’t find the store’s products worth the money, don’t train enough to come back to the store for new products, aren’t of an age where they are interested in endurance sports and can easily get to the store in that 10 mile radius (reaching people in Boston, MA and surrounding suburbs on the South Shore).
discovering your target market

The more you know your customer, the more likely you are to achieve your business goals; by letting your customers dictate your business decisions, you guarantee that you will always have a product/service that they want.

Once you have a target market, you can break it down into market niches and focus on the different characteristics of each market.

Define A Marketing Niche

If you find you can narrow your market into something more specialized, but doesn’t cover your entire target market, you have found your niche market!

For the Braintree, MA sports store in the example above, they may find that by selling endurance athletic gear that marathon or ultra-marathon runners are their niche (in addition, the store is located close to Boston, home of the renowned Boston Marathon hosted every Patriot’s Day).
market niche

By specifying niche markets, you also can stand out from your competitors, distinguishing you in a possibly crowded marketplace. There are two varieties of niches your business may determine: operational and customer.

An operational niche allows your business to focus on specialized products or services that will appeal to the smaller customer group. A customer niche will focus on one or more customer bases, emphasizing customized products or services and tailoring business marketing to those specific audiences.

You may find one approach is best for your business, or a mix of both. The sports store may market specifically to Boston marathon runners and provide specific items used in marathons in its store.

Defining a niche for your market will let you fine-tune your marketing message even further, so before you go down this path, make sure you will have a large enough demand to stay profitable.

Take A Look At Your Competitors

While you may have a fairly fleshed out idea of your target customer, you don’t want to call it quits now. Take a look at who your competitions focus on and you’ll learn a lot about other qualified buyers you may be able to reach.

Ask yourself a series of questions:

  • What type of customers purchase from them?
  • What are their prices and how do they compare to your business’s prices?
  • What is their social reputation? What are customers saying about them online? What do these highly-engaged customers look like (write a profile of their demographic and psychological make-up)?
  • How does your target market differ from theirs? Why would customers come to you instead of your competitors?

marketing content be unique

You may have found before that your target market is different from your competitor (which is usually a sign of an open opportunity that you are taking!) or you may find that there are a lot of similarities. If there are, see if there are gaps in your competition’s service, location or products that your business can fill.

Conduct Your Own Primary Research

If you have the means and ability to conduct your own primary research for your target market, you can confirm what you think you already know about your target market by finding out directly from your customer. It can be expensive to conduct your own research in this manner, but it allows you to hear specifically from your customer, not from a series of educated guesses.

Some affordable ways to conduct research:

  • Conduct interviews with valuable and loyal customers. These people love your business and by speaking with them you can find out what brought them to your business in the first place — and what keeps them coming back.
  • Distribute surveys to your existing email list. Email surveys are not as reliable as other primary research data, but they do allow you to contact a large amount of people easily and quickly (and cheaply).

Reassess Your Findings

Lastly, you want to combine all this information and take a look at how you originally defined your target customer and how it evolved with each step of the research process.

The process of determining your target market is never over, though. If you want to continue to succeed and grow your business, you have to reassess your evaluation every year.

At every evaluation you need to ask yourself:

  • Are there enough customers in my target market to grow my business?
  • Will my target market continue to benefit from my product or service?
  • Is there a need for my product or service? Is that need growing or depleting?

By asking these important questions, you’ll be sure you continue to provide products and services that are in-demand and not end up with the likes of Blockbuster Video, realizing your market has disappeared from beneath you because you didn’t listen to the market.

To find the perfect balance of being innovative and sustainable, you’ll need to evaluate your business over time and through research and analysis (if I could help accomplish this for you in this article, I would be selling it for $50 a download and be a millionaire).

If you ever find yourself hitting a wall with your research, try searching online for what others have done (in and out of your industry) to get your juices flowing. Check out articles, forums and industry associations for ideas, best practices and what others have learned.

Defining your target market is hard, but once you know who you’re targeting, your marketing strategy will almost fall into place for you (and so will other aspects of your business). Not only will creating a target market save you time and energy, but it will also save you money and effort by helping you reach only those consumers who are highly interested and engaged with your business.

Once you’ve identified your target market, we promise the hard work is done. Creating an online marketing strategy that resonates with your target market shouldn’t be the same intense process that you just went through. (You’ve done all the hard work already.) To create an effective online marketing strategy, all you need to do is find tools that can help you spread your message to your target market.

Vivial is a simple, effective and affordable online marketing platform local businesses use to build their target markets and engage with new qualified buyers. From local SEO and social media to coupons and reviews, Vivial can help spread your marketing message across every online channel — all at the touch of a button. Learn more about Vivial.