1. Sharpen your focus
One of the most effective things you can do to market your product smartly and efficiently is to narrow your gaze – in other words, prioritize. Which efforts should you prioritize? Here are three tips to help you focus your marketing approaches:
A. Determine what needs your product fulfills
Who is most likely to use your product? As you answer this question, consider factors like age, buying power, geographical location, and marital status. Take, for instance, a recent college graduate who has just started her first job – she will have different needs than a mother of four teenage children. Both women require food and shelter, but at the same time, they might choose to spend their discretionary income in very different ways. Almost 50% of millennial women, for instance, shop for clothes more than twice a month, compared to only 36% of women from older generations. Millennial men, meanwhile, spend twice as much on clothing as non-millennials do.
What does this mean in a business context? If you are a clothing retailer, whether you are offering $15 t-shirts or $500 coats will lead to you very different target markets. T-shirts that retail for $15 can be bought multiple times each year, while a $500 coat might be a once-in-a-lifetime purchase. If you plan to sell $15 t-shirts, you now have a clearer idea of your target market: millennials who want variety at a lower cost.
B. Use a funnel approach
For some CEOs, it might be helpful to think of the market selection process as a multiple staged funnel. For example, your first bucket might be gender. If your product or service is gender-specific, you can immediately narrow your audience. Your second filter might be age range. If you manufacture surfboards, marketing your product to octogenarians might result in very limited success. Your third and final sieve might be income level – the family purchasing a Kia probably occupies a different income bracket than the family purchasing a Lexus .
As you move through these successive filters, you will eventually arrive at a more focused target market for your product. You can experiment with the order of the sieves and different combinations of filters to see whether you receive a different final result. These final groups you arrive at will make it easier to find the sweet spot that is the intersection of “highly interested” and “able to buy.”
C. Emphasize primary value propositions
Who is most likely to be interested in the values your product or service offers? Suppose your company makes a baby stroller that is easy to fold into a compact, portable shape. What types of parents will value it? Perhaps it is those who travel frequently. Maybe you manufacture a DSLR camera that can withstand drops onto hard rock and submersion in water. In this case, your target market might be outdoor enthusiasts who shop at stores such as Patagonia and REI. Whatever your product or service, list out the core values that your product offers, and then draw a line (or lines) to the demographic groups that prioritize these values.
2. Obtain data
Choosing the right markets also means infusing conclusions with objective data. This data might come from a variety of sources. As you work to gather it, here are some guidelines in mind:
A. Gather survey data to identify potential markets
Metrics are a great way to pinpoint promising demographic groups. This might mean conducting surveys via e-mail blasts or newsletters, or you might find it worthwhile to contact a marketing firm that can help you gather preliminary data. Either way, the key is to collect demographic data in your surveys. This can enable you to correlate positive responses to your product or service with specific demographic groups – the same groups that you should later target.
B. Draw on existing data aggressively
If your business offers a product or service similar to those already on the market, do as much homework as possible. What demographic groups are buying these products? When do they buy them? Which specific products in the entire lineup are most popular? There is a plethora of data that you can find online to gather a macro view of the type of customers who are purchasing products similar to what you will offer. You can also build your own micro view of specific types of target customers. Here is one example of basic market research:
Go spend half a day at your local coffee shop. As people place their orders at the counter, take careful notes – what drink did each person buy? How old is each person, and what is his or her gender and ethnicity? Is a particular drink especially popular? When is the store busiest? Once you compile your data, you can then apply the findings to the marketing efforts for your own coffee company.
C. Look to your own network for data
The next time you are with family or friends, look at what products they use. Would they purchase your own product or service? Asking questions as straightforward as, “Would you use this? Do you have a need for this product?” or, “Do you know anyone who would use this?” can provide you with valuable data.
You can also tap into your network of business colleagues, funders, and mentors. Ask them to carefully examine your product or service, maybe even to the extent of trying it for several days or weeks. They might surprise you and think of target markets that you would have never imagined, as well as innovative ways for those groups to use your product.
Whenever possible, draw on diverse perspectives as you build your marketing efforts. Your end goal is to make it easy for your target demographic groups to see connections between their needs and your product. The analysis of multiple streams of data, as well as a continual effort to identify your target customers, can help you achieve this end and maximize your ROI.