What is a Target Market?

I mentioned in my last post that it’s crucial to choose a target market. In this post, I’m going to talk about what a target market is. Let’s start with the foundations. A market is a group of people

• who have specific want or need for your product or service
• have the ability to buy your product or service
• are willing to buy your product or service

At this stage, however, we have no idea how to identify and market to those types of people in your market. That’s where segmentation comes in. A market segment is a subgroup of people within your market that share common characteristics that make them identifiable.

If you don’t know anything about the people that buy your services, where would you find them? You’d spend lots of time, effort and money marketing to everyone when only a tiny percentage would even see your message, and of those, only a smaller portion might buy from you. You’d spend much more money trying to acquire a client than you’d make providing your services for them.

But I Don’t Want To Turn People Away
Often when I mention that real estate agents must narrow their focus and choose a target audience, I hear comments like “I need to cast as broad a net as possible” or “I don’t want to turn anyone away.” From their perspective, it just doesn’t make sense to focus on a select group of people at the expense of everyone else.

This wasn’t always the case. In the 1960s, for instance, it was much easier to reach virtually everyone. The average home received 5.7 tv channels. There were only 8400 magazine titles, and 4400 radio stations. As a marketer, you knew that if you were to advertise on tv during prime time, there was a good chance you’d reach people likely to buy your product.

In today’s marketplace, consumers have far more choices than ever before - and are overloaded with information. In 2004, the average home received 82.4 tv channels. There are 17,300 magazine titles, 13,500 radio stations, 25,000+ internet broadcast stations, and Google has indexed over 8 billion web pages.

It’s much more difficult to reach everyone that you’d like to reach through tv, radio and print. And consumers today are exposed to so many messages that they’ve become pretty good at filtering out the irrelevant content from what they want to know. If an offer isn’t directly relevant to them, they won’t even notice it.

Marketers have learned they need better tactics for reaching consumers, so they’ve turned to segmenting markets to better understand how their clients and customers behave. Unless you’re a Fortune 100 company, you’ll never have the marketing budget to reach everyone you’d like to reach - and even they choose segments to market to because if what they say isn’t relevant, consumers just turn the channel, turn the page, or click away from their website.

The real question is how can you reach prospects on an affordable budget? The answer lies in

• picking a narrow target audience
• focusing solely on them to understand their needs, concerns, motivations, and behaviors
• presenting yourself as a specialist in that area

In this age of choice, people don’t want generalists. They want people who have worked with people just like them, who understand their specific problems and concerns, and can tailor a solution to fit their needs.

When you narrow your focus, you can think like your prospect might. You can assess what their concerns might be and offer a tip sheet, free guide, or seminar to further address their concern. You also will do better at predicting what media channels - advertising, website, postcards, sales letters, mailers, email, etc - you should use to reach them.

If you don’t have a clear picture of who you’d like to target, your marketing efforts are more “hope and pray” than strategic. Instead of speaking directly to a highly specific group of people, you speak to no one. And speaking to no one usually means you’ll get no responses. People have better things to do than read your ad. If it’s not relevant to their life at that moment, they won’t take notice. And if they don’t notice, they won’t remember you and you’ve just wasted your money.