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Let’s consider a SaaS business that sells e-commerce platforms for online stores like Shopify. They throw a marketing campaign to sell their platform without segmenting their audience. The results leave them disappointed.
They achieved some conversions, but it wasn’t close to the target, and end up wasted tons of money.
Why did the campaign fail?
- Lack of clarity of ideal customers as they are scattered across different domains.
- Customer acquisition costs were over the top.
- High costs, low returns.
- Often sets a negative brand image.
The results could have been very different if they had identified their ideal target audience. A business needs to know the people most likely interested in its products or services. Moreover, they should be aware of their audience’s behavior, preferences, and needs to curate a perfect marketing strategy that boosts sales
However, it is easier said than done. A study by Marketing Charts found that 53% of marketing decision-makers in the U.S. find it difficult to develop a personalized advertising experience.
Identifying the ideal target audience can be challenging for startups with limited resources and a small customer base. Thus, it is essential to pinpoint the right tools and strategies that will help you know your ideal target market.
Source: marketing charts
In this article, we will discuss the importance of identifying your ideal target audience, types of market segmentation that will leverage your target market search journey, tools to determine your target audience, and a go-to-action plan to find your target market.
By following these tips and tools, you can better understand your customers and kickstart your startup journey with optimal expenses. You can also create marketing strategies that cater to their needs leading to better engagement, sales, and revenue generation.
» Importance Of Identifying Your Ideal Target Audience For Your Startup
Before we discuss the importance of the target audience, let’s first understand what it is.
A target audience is a specific group of people or organizations that a startup aims to reach with its messaging, positioning, and advertising campaigns.
Without proper messaging and market segmentation, you might be beating around the bush, spending endless amounts of cash, and getting results that only disappoint you.
Here are some of the reasons why identifying your ideal target audience is crucial:
1. Strong Communication
Once startups know their target audience, communication becomes more effective. Knowing your target market allows you to speak the language that resonates with them, making it more likely for them to listen and reciprocate.
2. Product Development
As a business owner, it’s important to understand who your target market is. By narrowing down your target market, you’ll better understand your customers and what they are looking for. This, in turn, will help you create products and services that they will love and be more likely to purchase.
Here are some factors you can consider while narrowing down your target market.
- What type of product or service do you offer?
- Would it appeal to a specific age group, gender, or location?
Once you’ve determined who your target market is, you need to figure out what they want or need. What are their pain points? What are they looking for in a product or service? By understanding their needs, you can create a product or service that meets them.
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3. Improved Sales
The ultimate goal of any business is to boost the sales of their product and services. Identifying the target audience helps in developing targeted ad campaigns, creating content that appeals to their needs, and using social media to connect with them.
This allows businesses to enforce personalized communication that meets their customer’s needs leading to increased sales and revenue.
4. Advantage Over Competition
The market is loaded with competition, and it is very necessary to have your USP established. Understanding your target audience and knowing what they want gives startups the competitive advantage of offering specifically designed products and services to their customers.
With proper and relevant differentiation, you can develop and position yourself as the go-to choice for your customers and achieve an added advantage.
5. Cost Savings
Targeting the right audience will prevent you from burning a hole in your pocket. Knowing your audience will help you direct your marketing efforts in the right direction. This way, you can increase the chances of purchasing from your customers by reducing the need for an expensive marketing campaign.
» What Are the Types of Market Segmentation?
Startups can focus on different types of audiences to direct their product toward. But where do you start that journey?
Let’s understand the types of market segmentation that will help you leverage them to define your target audience.
Demographic market segmentation is defined by demographic information. This includes everything from age, gender, income, and education level, to occupation.
For e.g., a startup that sells luxury fragrances can target high-income individuals as their demographic information.
Psychometric market segmentation is defined by personality traits, social values, attitudes, activities, interests, and opinions.
For e.g., a startup selling eco-sustainable and eco-friendly products will target consumers who are environmentally conscious.
Geographic market segmentation is segmented geographically based on a city, state, country, or continent.
For e.g., a startup that provides delivery services will target consumers based on a specific region or city.
It is often possible to track a consumer’s behavior through actions like purchasing actions, search histories, or activities on social media platforms. Behavioral market segmentation is confined to those consumers.
For e.g., a startup that sells cosmetics will target the right people who frequently purchase products in that category.
The firmographic market segmentation lies within the common characteristics of a business or organization. It can range from the type of industry, size, revenue, and location.
For e.g., a startup that offers employee insurance may target small and medium-sized businesses in the beginning.
» 7 Golden Ways to Determine Your Target Audience
Once you are well acquainted with market segmentation, it’s time to determine your target audience. Determining your target audience pulls you one step closer to your goal of filtering your audience to a perfect fit for your product or service.
Here are seven ways to determine your target audience:
1. Conduct Market Research
The first step is to conduct thorough market research to discover your potential customers, their needs, and preferences. You can use surveys, focus groups, and online analytics to consolidate information on your target audience.
This will help you narrow down your search for the ideal customers and bring people who are interested in your product to the table. For e.g., HubSpot uses free niche-specific communities to gather people with the same interests.
2. Analyze Competitors
Analyze your competitors to see who they are targeting by keeping a close eye on them. This will make the process much faster. Analyzing your customers’ also gives you a sense of clarity on your next step, after which you are ready to determine how you can differentiate yourself from them.
3. Curate Buyer Personas
Create detailed profiles of your ideal customers, which are also known as buyer personas. These customer personas should include details such as location, employment, age, income, gender, etc., of your target audience.
For instance, if you’re targeting customer support representatives, your buyer persona would be customer support reps aged between 22-35 years living in the Philippines.
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4. Utilize Social Media Analytics
You can use social media analytics to identify the demographics, needs, and interests of your existing followers. Use this information to tailor your marketing strategy and messaging.
Brands such as Shein or Ajio leverage social media to understand their audience better.
5. Examine Website Traffic
Analyze your website traffic to understand –
- Where are your visitors coming from
- How they are finding you
- What they are interested in.
This will help you identify your target audience and produce relevant content for them.
6. Communicate With Your Customers
Talk to your existing customers and seek feedback whenever possible. This will help you redefine your target audience and take necessary actions on your messaging, helping to acquire new customers.
It is important to continuously test and refine your target audience based on the results of your marketing campaigns. Adjust your target audience accordingly to achieve an improvised and concrete audience for more accurate results.
» Which Tools To Utilize to Identify Your Target Audience?
There are many tools in the market that come in handy while identifying your target audience for your startup. Here are some examples:
1. Google Analytics: Google Analytics is a tool that helps you to track your user behavior and website traffic. It is a great tool for analyzing your website’s data and insights into your audience’s demographics, interests, location, and behavior.
› Common features of Google Analytics:
- Real-time monitoring and reporting of activity on your site or app
- Acquisition Reports
- Monetization Reports
- Customer engagement reports
- Fresh data
- Engagement reports
2. Facebook Audience Insights: Facebook Audience Insights tool provides the right information for your Facebook users. Additionally, you can use this tool to identify lookalike audiences that share similar characteristics with your existing customers.
› Common features of Facebook Audience Insights:
- Overview of demographics
- Audience segmentation based on demographics, gender, education, etc.
- Information on audience interests and lifestyles.
3. LinkedIn Sales Navigator: The LinkedIn Sales Navigator tool allows you to search for and connect with potential customers on LinkedIn. You can also identify similar audiences with resembling characteristics to your current customers.
› Common features of Linkedin Sales Navigator:
- Segmentation of audience based on job titles, large, medium, and small businesses, business owners, income level, etc.
- Enable engagement with the audience and build relationships.
4. HubSpot: HubSpot is an all-in-one sales, marketing, and customer service platform. It provides tools for customer research, lead generation, and lead nurturing. Using HubSpot, you can easily identify your target audience and track their behavior throughout the customer journey. This can help you game up your marketing messages, fetch the best customers, and improve your customer experience.
› Common features of Hubspot:
- Free customer relationship management software to nurture and grow your business.
- Live chat to connect with visitors in real-time
- Meeting scheduler for your emails and website
5. SEMrush: SEMrush is a marketing tool that generates insights into your website’s content marketing, SEO, and paid search performance. You can also use this tool to fill gaps in the market by analyzing your competitors.
› Common features of SEMrush:
- Analyze your audience’s behavior and discover keywords, pain points, and topics that cater to their interests.
- On-page SEO
- Rank tracking
- Content marketing
6. SurveyMonkey: SurveyMonkey is an online survey platform. It allows you to make and distribute surveys to curate your target audience. By gathering information about your ideal consumers’ needs, preferences, and behaviors, you can identify the specific audience and tailor your marketing messages accordingly. You can also use this tool to gather feedback on your products or services to improvise.
› Common features of SurveyMonkey:
- Survey templates
- Enterprise-grade features
- Consolidated account management
- Statistical package for social sciences (SPSS) integration
- Custom reporting
7. BuzzSumo: BuzzSumo is one of the best content marketing and email marketing tools that allow you to analyze popular content according to your niche market. By analyzing the most popular topics and keywords, you can identify the right target audience and use it to share valuable information with them. This can help you create the perfect content marketing plan that attracts and engages your target customer.
› Common features of BuzzSumo:
- Account-Based Marketing
- Digital Analytics
- Conversion Rate Optimization.
- Customer Data Platform (CDP)
- Demand Generation
- Event Management
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» Test and Refine Your Target Audience
As discussed above, testing and refining your target audience is a crucial process for startups. This helps you ensure that your marketing efforts are effective and efficient. There are some easy steps you can take to test and refine your target audience:
Defining Your Ideal Customer Persona
First and foremost, start defining your ideal customer profile based on your product or service by identifying the demographic, geographic, psychographic, and behavioral characteristics. This will help you create a dataset around which people to target in your campaigns.
Creating A Hypothesis
Create a hypothesis for your target audience based on your ideal customer profile. For e.g., your hypothetical target audience might be a set of people in the age range of 35 to 60 years old based in the U.S.A, employed in the senior-most levels, and confined to decision-maker roles in the organization.
Conducting Market Research
Conduct thorough market research to confirm your hypothesis. You can arrange customer interviews to gather feedback, release surveys, and create focus groups with your target audience.
Analyzing The Data
Post-data collection, it’s time to analyze it. Start by finding out if the hypothesis was correct or not. You can further look for patterns and trends that can help you refine your customer persona. Soon, you will be able to add or eliminate unwanted groups of people from your list.
For e.g., you might find out that the decision-makers might also be belonging to age below 35 years and are not only catered to uppermost management.
Refining Your Target Audience
Use the data to refine your target audience. Ensure that it aligns with your business goals and marketing strategies. For example, after discovering decision-makers to be present below 35 years old through your research and can be present below senior-level management, you can enhance the list accordingly.
Testing Your Refined Target Audience
Once the target audience is refined, it’s time to test its performance. You can perform A/B testing by creating two versions of marketing messages. Target these versions to two different groups of customers.
Create two groups:
- The list with the initial hypothesis
- A new list with refined results
Likewise, you will be able to determine the version that was more effective.
Monitor And Re-Align
Once the plan is in motion, monitor your target audience’s behavior and adjust your marketing efforts accordingly. Use the analytics tools like Google Analytics or SEMrush to track your audience’s behavior. If and when required, adapt your marketing strategies accordingly.
As a startup, positioning yourself in the market and determining your ideal customer persona is extremely important. It lays the foundation for your product or service’s development and the further journey forward.
Here are some key points to take away in a nutshell –
- Identifying your ideal target audience is important to set clear goals for sales and marketing strategies.
- Use tools like google analytics or HubSpot to perform an analysis and market research on where your customers fit.
- Carrying out A/B testing helps you find suitable marketing messaging.
- Identifying your target audience helps you align your products, services, and goals accordingly.
- Lastly, testing and refining these data helps you achieve optimal results leading to customer satisfaction and increased revenue.
Author’s Bio: Shweta Gupta
Shweta is a growth marketing specialist who is working with 2xSaS. She creates content that converts website visitors into paying customers for SaaS companies. In her free time, she likes driving around the city & hanging out with her friends.