How To Identify The Target Market For What I Have To Offer?

Is it all about making assumptions or simply guessing…?

It has been my long-held belief that the first step toward building a sustainable brand is to define the target. However, it naturally follows, how does one actually do so? This is a particularly interesting question for startups where benchmarks are difficult to identify. In such cases, should we just make assumptions and guesses?

Why do we even need to identify a target market?

Let’s start with the end in mind. As a business, we want to engage with the right prospects and the right customers?—?because these are the people who are most likely going to be happy with what we have to offer. Spending efforts or money in trying to reach and engage everyone, or the wrong group of people, is not effective and wastes precious resources. The idea is to delight our target customers, giving them an exceptional experience before and after the sales. The ultimate goal is to have these people be so pleased with what we do and what we have to offer that they become our brand advocates. As brand advocates, they will help us by promoting our business, fueling our business growth. However, since we can never please everyone, it is important for us to identify our target market.

Many businesses have found that it’s helpful to develop buyer personas in order to crystallize the definition of the target market. Personas tell the full narrative of our target market. It defines our entire target market as if it was one person. Sometimes, we may even give our personas names to make them really come to live! A persona weaves all the shared qualities and characteristics within a target segment and distills it all into a single narrative.

Personas are used to align the entire organizations around the target customer. Personas help us keep in our minds the voice of the customer in everything we do.

How to build useful buyer personas?

Buyer personas must be based on real insights based on actual research, not assumptions. One way to start is to ask questions. Consider asking questions that may touch upon their demographic, goals, and challenges.

Here are a few sample persona research questions:

  • Role: What is your job? Your title? What is your role in the purchasing process?
  • Company / Organization: What industry or industries does your company work / is your role in?
  • Goals: What are you working to accomplish?
  • Challenges / Pain Points: What are your biggest challenges?
  • Daily Life: What are your daily routines? When and how would you like to interact with vendors or products?
  • Watering Holes: How do you learn about new information for your role?
  • Sources of Information: Where do you conduct research on vendors or products?

These are just examples and need to be adjusted to be industry-specific. These questions are just the starting point. We have to dive deeper and ask more probing questions in order to truly understand what motivates and drives our target customers. We need to understand the why behind the what and how.
Of course, we can conduct persona research by asking our existing customers.

What to do if we don’t have any existing customers?

But if we’re at the beginning of our adventure, we may not have any customers yet. So, how do we get started? If we don’t have any customers yet, we may ask people whom we think may be the right fit for the products or services we have to offer.

Who are our competitors? Our potential customers are likely currently buying from our competitors.

Sometimes, our competition is not so obvious, particularly in a case where we may be trying to innovate and disrupt an industry. One way to think about competition is to follow the money! Consider this question: What would our ideal customers be spending the money on if we didn’t exist?

As a business, we exist to provide solutions for our customers. We want to provide a better solution than what they had before. Every innovation should be solving a problem and providing a solution for someone.

Let’s look at a historic example. Henry Ford changed the world by inventing cars. He provided a better solution for transportation than what horses and buggies were able to provide.

Sometimes, our solution is so innovative that we may need to think more broadly. Our ideal customers may not be spending any money on the problem currently, because there haven’t been any suitable solutions. In such case, research is even more important to validate that they would be willing to pay for what we have to offer.

To identify our target customer is to ask who has this problem that we are helping to solve and to whom we are truly providing value. Having our hypothesis is only the beginning. We need to develop real insights with our research in order to develop our buyer personas.

Beyond just asking questions, another way to uncover insights and to learn is through experimentation. Many startups validate important assumptions with a minimum viable product. Unlike a prototype that may be used to answer technical questions about the product, a minimum viable product is designed to answer business questions.

Dropbox famously launched with a minimum viable product by launching a video showcasing their vision for a solution to the file synchronization problem. The Dropbox team had a leap-of-faith assumption that people would actually want a solution to this problem that they did not know they had. To test their assumption, they launched the video?—?which was not the technology they were developing at all. But it was a minimum viable product that the Dropbox team can “sell”. They found the answer to the question “is there a market?” in their beta waiting list.

What is the lesson here?

Let’s get back to answering the question of how to define the target market. We start by analyzing what is it that we are really offering. We may need to make some assumptions in the beginning.

However, for us to develop a buyer persona that is truly helpful in unlocking business opportunities, we must validate our assumptions through thorough research and testing.

Such research can be inexpensive. Find some people to ask some questions. Any insight is better than no insight at all. At the same time, carefully consider the price to be paid if we try to build a business without having the right insight to serve as the foundation.

We start by analyzing to whom we are providing value.

Then, we validate that assumption with research and testing, so we can develop a useful buyer persona.


 

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Persona photo credit: Gary Barber / Creative Commons License

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