One of the mistakes many entrepreneurs, business owners, and marketers make when trying to find customers is not truly understanding who their customers are. While many may have heard of the phrase “target market”, many do not understand what that means or how to do that more precisely.
Your target market is the people who are the most likely to buy your product or service. A market can be broken down into many market segments such as behavioral, geographical, and even psychographic segmentation. In this article, we’ll cover a basic type of target segmentation called target demographics.
What are Target Demographics?
Without knowing who your intended customer is, your business could make several errors. Your marketing could be done incorrectly, you could make mistakes with packaging your product, and your pricing might be flawed.
To avoid these mistakes, it’s important to consider your target demographics. But first, it’s important to understand what demographics are. Target demographics are a type of target segment of the population that shares a common characteristic. These characteristics are things that can be observed or measured. For example, one common demographic is age. It has been well known for years that one of the most popular demographics to market to is adults aged 18-34 due to their tendency to purchase more.
In other words, how can you figure out these aspects of your customers to figure out who they are? While you may want “every customer” to be a patron of your business, the truth is, this is a strategy for failure. Not everyone will want – or need – what you’re selling. There are several ways to get to know who your target customer is. You can break this down by identifying different aspects of his or her identity.
Many people often use target demographic and target market interchangeably. However, there is a distinction between the two. The target market is a broader customer group while demographics are more refined characteristics of those groups.
Target Demographics Examples
Here are a few examples of target demographics.
There are multiple ways that age can influence your target demographic. For example, knowing age can influence which social media platform you choose to spend your advertising dollars on.
Age can help you identify effective campaigns for advertising to the right group of people. It can also help you better discern who is truly making the purchase and who holds the purse strings. For example, while products are designed for kids, they’re made for the child, but the parent holds the financial power.
Knowing which sex your product is intended to reach will dramatically influence how it’s packaged. This is easily seen in products used by both sexes. Items such as soap, razors, and shampoo are made and marketed differently based on the sex they’re meant to appeal to.
Does your company target itself towards parents with children? Or is your customer base composed of singles? Creating ads that accurately reflect your customer base is one way to use marital status in your target demographics.
Income inevitably impacts product pricing and consumer spending. College students with barely enough money for ramen noodles will have a different level of purchasing power than people with higher income streams.
Knowing the occupations of your customers can also help in marketing to them. This is not only important if you’re selling to other businesses and their employees, but also to consumers. For example, a company selling shoe insoles may want to target nurses or other professions where individuals are on their feet for long periods.
How to Find Target Demographics
Know Your Product
Knowing your product well is foundational to identifying and effectively targeting your demographic. First, a deep understanding of your product’s features, benefits, and unique selling propositions allows you to precisely identify the problems it addresses.
This enables you to profile potential customers who face these problems. Secondly, by understanding your product, you can anticipate questions or concerns potential customers might have. This not only ensures that marketing dollars are not wasted on the wrong demographic but also opens up the opportunity to communicate with your potential customers.
Knowing your product is like having a compass. It points you towards those who will find the most value in what you offer. Once you know that, you can make the effort to move towards them to give them a product they will love.
Define Who is NOT Your Demographic
Understanding who your target demographic isn’t instead of who is may be a good place to start. By actively eliminating the groups that are not aligned with your product or service, you systematically narrow down the field of potential customers. By discerning who you’re not speaking to, you gain a more vivid and refined understanding of who you are speaking to. This will save you a ton of time and money when marketing.
Let’s look at an example. Let’s say you’re launching a high-end luxury handbag line. One group you may want to eliminate is budget-conscious college students. By actively identifying and eliminating the characteristics of budget-conscious college students, you can now hone in on the true audience. Affluent women with a liking for luxury goods, for example.
This process of elimination ensures that your marketing resources aren’t squandered on the wrong audience. You wouldn’t spend ad dollars on a website that features articles and videos about college football games. A luxury brand probably wouldn’t benefit from using slang or trends popular among college students either.
Instead, its messaging might be more sophisticated and refined. So, by knowing who you’re not targeting, you amplify your understanding of who you are targeting. This will help align your strategies and communications more effectively with your core demographic.
Investigate Your Competition
Investigating the competition is a critical step in understanding a company’s target demographic because it gives insights into existing market dynamics. When you take a look at what your competition is doing, you get insights into who is currently engaging with similar products or services and why. The good thing about this is that competitors have already done a portion of the market research.
As a result, their customer bases can provide clues about the larger market’s interests and preferences. By analyzing their marketing strategies, messaging, and channels of communication, you can guess the characteristics of their ideal customer.
One way to investigate is by studying competitors’ social media engagement. This can shed light on the type of content that resonates with the target audience and the platforms they are most active on. In essence, a deep dive into the competition not only helps in identifying the potential target demographic but also in refining strategies to cater to their needs more effectively.
Understanding target demographics may seem challenging, but it doesn’t have to be. Knowing your customer is one of the basic – yet most vital – aspects of running a successful business.