How to Identify Your Target Market

The number-one reason that your advertising campaigns and ultimately your business will fail is that you don’t understand the market and you don’t understand your customers. If you are going to grow and scale this business, you have to understand your customers.

Ask yourself, “What is the difference between a company that is absolutely crushing it and a company that’s barely getting by?” It could be operations. It could be customer service. It could be the sales team. There are a ton of things that it could be, but let me tell you, every company that’s crushing it has done one thing in common — they have aligned their target market, their target customers, and themselves.

Your target customers are over here. They’re in certain geographies. They’re on certain platforms. They want certain things. They have dreams, fears, hopes, and desires. They’re on one side. Meanwhile, on the other side, you have your business. You have your product. You think you understand exactly what the problems are, and you develop everything that you do to help solve these people’s problems. However, when things are misaligned, when you don’t really understand your target customers, that is where wasted time and money kill businesses. You think your product or service is going to solve real problems.

Then you find out that people really won’t pay what you need them to pay to be able to make your business model work. Nothing’s hitting, so either you find yourself running off to launch this new thing, wasting a lot of time and money, or you’ve been running your business for years and you feel like you’re getting no traction.

Here are six strategies that you can use to know your customers better to launch that next product or turn your company around.

1. List down all potential contact points.

We are on a journey of finding out exactly who we want to speak to, what they care about, and how we will sell to them. We’re going to align all those things, but the first thing we do is list out every single potential contact point ever. Who might buy this product? Who might hire our service? Whether it’s likely or not, who are these people? How do they get in contact with you? What places do they live in? You have to list down every single person who might exist within your sales funnel, your sales channel, your advertising campaign — everyone. List them out.

2. Research, research, and then research some more.

So now that you have this list of every single person that might be in contact, sit down in front of your computer and spend 6 to 12 hours researching now. You are not necessarily looking for stats. Stats are great. You’re not really looking for studies. Studies can be awesome. What you’re looking for is what little rabbit holes can you go down and what exists within the zeitgeist.

I love going to The Atlantic, New York Times, Washington Post, Vox, Vice, or Harvard Business Review. There are tons of publications and tons of things you can do to find out what people have been saying over the last 10 or 20 years or the last two or three years. We have a list of all these people that we’re targeting. What do these people care about? What are they talking about? What worries them? What concerns them? What are the companies within this space? What are they surveying and looking into?

We work with a lot of financial institutions, so people are always thinking about retirement. When I put together a strategy to understand what people care about retirement, I’m more interested actually into what the different generations think about retirement. I compare baby boomers versus Gen Xers versus millennials versus Gen Z in terms of how they think about retirement?

Gen Z does not think about retirement at all. What does Gen Z worry about? Oh, they worry about the environment. So ask yourself, what’s happening in the environment? Who else worries about the environment? This weird little rabbit hole will help us start to understand that if Gen Z is an audience that we need to get in front of? We can’t talk to them about retirement. We’re going to talk to them about the environment. Then we’re going to say, “The environment has to be here in the future. Your future is important. Financial independence is also about the future. You need to think about your retirement even though you’re not thinking about it.”

I don’t know. The point isn’t to judge right now. The point is to do so much research that you come to understand all the worries and all of the concerns and all of the fears. There’s going to come up with tons and tons of research, like hundreds of screengrabs and polls and things because you were getting so much out of this exercise.

3. Look for common themes.

What is everyone saying? Are they pro my product or pro the solution I’m offering to a problem? And then I list out all the cons. Who are against us? What type of people seems to think our ideas are stupid? Is there a gap in research? Why aren’t people looking into this? Why aren’t people saying certain things? I want a list of all the pros, and I want a list of all the cons. Then I’m going to dig down into those underlying motivations, those worries, and those fears. I’m going to try to bucket it down to the reasons that people do anything.

If you’re selling a brand-new technology product, you can say, “Oh, my new product can make life so much easier.”

Early adopters will buy it because they get a rush from being one of the first few customers to use the product. They’re addicted to technology. It elevates their status within their community. Think about the underlying factors of why people will buy your product. It could be to gain or to avoid. They might say, “I will buy your product because I’m going to gain something [e.g., status, acceptance, exclusivity, or fun],” or “I’m going to buy this because I hate hard work. It’s so repetitive,” or “My life is too boring, so I’m going to buy this to avoid boredom,” or “I’m lonely, so I’m going to buy this to avoid loneliness.” This is where the research and having that big list of everyone helps us now. Start to boil down exactly what people care about.

4. Pick your actual targets.

We can actually just cut the list down to the people that we’re likely to sell to. Yes, we can sell to everyone. Yes, we can try to attract everyone. But we’re not going to. Maybe young people simply won’t buy this because they have pains, interests, fears — all of those things. Maybe we should be going after 45-year-old Gen X women who are in a position where they feel like they haven’t saved for retirement yet. They’re starting to get worried they’re sandwich generation and their parents are aging, whatever it is.

We’re actually going to pick the specific targets, and these targets are going to be based not on demos. I just said “45-year-old women,” but then I listed all the different things that they’re worried about. We’re going to bucket our targets together based on buying motivations. What will motivate someone to buy? So if a 58-year-old man will buy something because he wants to get healthy, what’s the difference between that and a 35-year-old man who wants to buy something to get healthy? They all want to get healthy, so we might have to tweak our language later to cater to the group of people who want to get healthy. Why do they want to get healthy? We’re going to pick our targets. This is for people who want to get healthy. This is for people who want status. This is for people who want to save time. You’re going to start thinking in these terms.

5. Start looking at the market and the competition.

Here is where the magic really happens. Now that we know exactly who we’re speaking to, we can go out and look at the market, the competition. We can actually ask ourselves, “Are they even competition?” If I’m going after people who want to get healthy and my competition is trying to help athletes become better athletes, it may look like we’re in the same space or have the same product, but we’re literally not competing at all. I help people who have been out of shape get into shape, while other companies help people who are already in shape get even better.

These are totally different audiences, totally different markets, and totally different places. We’re not even competing. There’s a lot of freedom in realizing, “Hey, I thought I had 30 different competitors, but it turns out, I only have three.” Now you can focus on what those three people are doing, how they’re doing it, and how they’re going about getting customers. You can focus on beating them, not copying them.

6. Align your brand and your offer.

I said earlier how your customers are over here and you’re over here in this messy middle place. You think you know them. You think you understand them. You think you know what to say. That’s where most businesses screw up. Well, now, you’re in a position where you actually understand these people you’re speaking to. Now you can work to align who you need to be and what you need to say to tap into their motivations.

Most businesses talk and talk and talk and talk and talk. It’s not what it’s about. You need to do a little bit of talking, and the few things that you say need to be the things that your target audience wants to hear. Now is your time to sit down and rewrite, rethink, or reposition exactly what it is you need to say to these people so you get their attention. Test your targets. We are living in an amazing time. A week from now, you can literally have an understanding as to whether your hypothesis, messaging, or target audience breakdown makes sense or not. You can do that by just going to Facebook or Google and remarketing and dropping in a simple ad. You can drive traffic to anyone you want. You don’t even have to drive it to your own site.

What you’re going to do is you’re going to select your audiences based on this whole breakdown of interest or whatever it is. You’re going to just run a simple campaign. You can test different messages or offers. All you’re looking to do is see if you are getting traction with the people that you think the messages or offers will work with. Before you launch that huge advertising campaign or before you launch your business, you need to be able to test if your targets are correct.

As entrepreneurs, as marketers, as salespeople, we are optimizing. We are a hopeful bunch, and we think that we know and understand people. We think that just because something kind of work, it is going to blow up and work really, really big. That is a huge mistake. It is a waste of time and dollars, and it’s really just because you’re taking for granted the customers. You are not doing the work that you need to do to understand them and connect all those dots.

If you’re struggling, you have to do this exercise. If you’re launching anything new, you have to do it before you launch, and then once you’re in the market, every two or three years, this should be something that you must do. You should be stopping and reassessing what’s taking place in the market. Who am I speaking to? What do they care about? Are my communication channels still the same? Are the platforms a little the same? What is changing? I mean even two or three years is kind of crazy. It’s a long time, but you need to do this now, and then you need to do it in the future. You have to stay on top of it.

The biggest businesses and the greatest companies fall because they take their eye off this. They take the customer for granted. Understand your customers and make it happen.