January 24, 2005

In this issue:

IDEA: Know Your Target Market

Dear Ann, We are a web development firm specializing in helping companies leverage the power of the internet to increase sales and market share. I would like to meet with you at your convenience to discuss our services and how we might be able to help your company use the web more effectively. Love, Sales Guy

Dear Sales Guy,

Thank you for your email. My company is also a web development firm that specializes in helping companies leverage the power of the internet to increase sales and market share. I would be happy to meet with you, but first, please explain how you intend to help me.

Thanks for clarifying,
Ann

This well-written, but misguided, exchange gave me an IDEA about knowing your target market.

My Target What?

What's a target market? It's a group of potential customers that share one or more characteristics that make them more likely to have a particular need for your product or service.

Right on cue, you say, "But Ann, we can sell our rocket boosters/insurance policies/pizza kits to everyone! Everyone is our target market! After all, everyone needs our rocket boosters/insurance policies/pizza kits. And anyway, we have the best prices. And the best service. And we're family owned. Blah, blah, blah…"

Then I say...

Guess Again

Everyone is not your target market. I know, that's crazy-talk. Let me repeat: everyone is not your target market. Was I in Sales Guy's target market? Clearly not. Do you think he could have figured that out if he had taken 10 seconds to look at my website before he wasted my time and his (and ended up inspiring this IdeaBook)?

More to the point, wouldn't you like to stop wasting your time and energy on prospects who probably don't want or need what you have to sell? [pause for reflection]

Okay, then. What are your target markets?

Remember, a target market is a group of potential customers that share one or more characteristics that make them more likely to have a particular need for your product or service. Business-to-business target markets can be organized by industry, geography, company size, revenue, or circumstance. Here are some specific examples:

Your Turn

How can you organize the universe of potential prospects (i.e. everyone) into markets that will help you distinguish between companies that are likely to need your product or service and companies that are going to send you a flippant email implying that you should spend the rest of the day hiding in a cardboard box?

EXERCISE: Think about what your customers have in common. Write down the names of 25 recent customers and describe them. Where are they located? What do they do? How many employees do they have? What special circumstances do they share? How did you find each other? Commonalities will start to appear. Those commonalities are your target markets.

Next Steps

Once you have defined your target markets, you have the information you need to go get more customers like that. Specifically, you can begin to work on how to identify prospects that are in your target market, how to get their attention, and how to get them to buy. [Topics for a future IdeaBook.]

If you have any comments about this article or questions about target markets, please drop me a line. I'd love to hear form you!

My best,

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