How to identify your target audience in 5 steps
Clearly identifying your target audience enables you to make efficient use of your marketing budget, build customer relationships, and assess demand.
12 min read
Attracting customers is critical to success, especially in the early stages of starting a business. Sadly, even for owners with a solid business plan, truly understanding whom they serve often takes a back seat to developing their product or service.
Ironically, the two go hand in hand: having something truly exceptional to sell and knowing exactly to whom it should be sold.
Clearly identifying your target audience—sometimes called customer persona modeling or customer journey mapping—enables you to assess demand and modify to better meet customer needs. You can then design a marketing campaign that “speaks to” the right people, using the tone and language most likely to appeal to them. In this article, we’ll discuss why it’s so important to identify your target audience and how to do it in five simple steps. But first…
What is a target audience?
A target audience is a specific group of consumers that is most likely to be receptive to your marketing campaigns. A business might have different target audiences for different products or services. Each target audience has specific needs, and business owners usually devise a specific marketing plan to attract them.
Why you need to identify a target audience
If you are a business owner looking to build an effective marketing plan, identifying and understanding your target audience is the first step.
But why is it important to know your target audience?
In general, targeting the right audience ensures your marketing efforts perform better and lead to higher sales or conversions. Let’s take a look at a few additional benefits.
Target market versus target audience
You’re probably familiar with the term “target market.” A target market and target audience are similar but not interchangeable. A target market refers to a group of people with common characteristics and behaviours that business owners target in their marketing strategy.
A target audience, on the other hand, is a subset of the larger target market and consists of a specific group of consumers within the larger group. The first step in finding the right audience to market your business is to identify your target market. This lays the groundwork for where to focus your efforts.
Finding the right target market can be challenging for a new business.
Here are some quick tips to help you find your target market:
Review your competitors to see who they’re targeting
Look for common behaviours among your customers
Use audience data to see demographic information about your customers
More information about your target market will be revealed as you pinpoint your target audiences.
Segmenting your target market
After pinpointing your target market, it’s time to refine your strategy. This is where target market segmentation comes into play. The purpose of market segmentation is to deliver more specific marketing content to specific groups within your target market.
The four common types of segmentation are:
Demographic: This means segmenting your audience based on demographic information, including age, gender, income level, relationship status, and more. Take a look at your customer data and see if you notice any patterns. For example, your customers might be mostly women with disposable income.
Psychographic: This segments your audience based on psychological factors like lifestyle, social status, activities, opinions, and interests. For example, if you know your customers tend to be big sports fans, you can target your advertising around game day.
Geographic: This segment focuses on targeting people based on where they live. Common geographic segments are local, county, region, and country. For example, if the majority of your customers live in Scotland, marketing inflatable pools might not be the right call.
Behavioural: This type of segmentation creates audiences based on a user’s interactions with your brand. For example, if you run an e-commerce business, you can create a segment of users who haven’t made a purchase in 60 days and target them with an email campaign to try to win them back.
Segmenting your target market allows for effective marketing with efficient spending and improved customer retention. With segmentation, you are exclusively sending relevant information to audiences that are specifically interested in it. If you send all of your content to the entirety of your contact list, your subscribers will tire of receiving material that isn’t useful to them.
Efficient budget use
Not defining your target audience can cost you money, literally.
This is because digital marketing in the form of ads requires some amount of capital. And this money is wasted if the marketing content reaches an audience that isn’t interested in what you’re selling. Targeted marketing helps you make better returns on your investment by being smarter about your advertising. It’s important to identify your target audience to refine your marketing strategy in a way that saves you money and helps generate new leads.
Build stronger customer relationships
With targeted marketing, you can reach the right target audience that’s responsive to your marketing strategies. Researching your target audience allows you to offer solutions to their problems. This increases the chances of them engaging with your business.
Reaching out to your customers with personalised content makes you stand out from your competitors. For example, if a customer buys a certain product from your online store, you can create an email campaign to target that customer when similar products are added or go on sale. This type of personalisation helps your target audience relate to your business on a personal level, helping your brand establish stronger customer relationships.
How to identify target audiences
Now that you understand the benefits of defining your target audience and how to segment your target market, it’s time to get to work.
Here are five steps to help you identify your target customers.
1. Create an ideal customer profile
The people who are most likely to buy your products or services share certain characteristics. The first step toward identifying these prospects is putting together an ideal customer profile, sometimes called a buyer persona.
This is essentially a detailed description of your target demographic that includes the following characteristics.
Age: Do your potential customers mostly fit in a millennial age bracket, or are they more often middle-aged? This is important to understand because customers in different age groups will respond differently to how your product is designed and marketed.
Gender: Depending on the types of products you sell, gender can play a role in how your audience reacts to your messaging. Generally speaking, the needs and goals of specific genders are often strikingly different. If you promote your business in a way that fails to address these differences, you could end up reducing the effectiveness of your campaigns.
Income level: Knowing how much disposable income your customers possess should directly influence your marketing strategies. Low-income families may be drawn to products or services that help save them money. Customers in higher-income brackets, on the other hand, may respond more favourably to marketing that emphasises luxury and exclusivity.
Location: Broadly speaking, the buying habits of urban residents often differ from those of people living in rural areas. Where people reside and the types of communities they live in influence their purchasing preferences.
Other key characteristics include marital status, occupation or industry, families with (or without) children, ethnic groups, hobbies, and interests. Use your own financial and business data to determine who your ideal customers might be. Then use market research to see how your actual customers measure up.
Be ready for growth
With so many things for small businesses to keep up with, find out how QuickBooks can help you run your finances.Discover QuickBooks today
2. Conduct market research
You can learn about your target audience through primary and secondary market research.
Primary research involves learning about customers’ buying habits through direct contact, such as:
Surveys: Distribute surveys to potential customers via paper, email, or web-based services. Surveys help you gather useful data directly from your customers. You can ask them questions outright about what previous services and strategies they liked, then take that feedback into account for your next marketing campaign.
Interviews: Talk to people you trust and whose purchasing habits dovetail with your small business. This approach is a bit more traditional and direct than a survey and provides you with candid responses for your marketing campaigns.
Focus groups: Get feedback from small groups who fit your customer profile through Q&A sessions and discussions.
Of course, you should never overlook current customers as a source of insight. When applied to clients, the same three methods not only help you better understand your target audience but can also guide you into better service skills.
Do you ever ask customers to fill out forms or leave reviews when they purchase your product or service? If so, they may be open to answering questions about their age, where they live, and their purchasing preferences. Invite them to share information voluntarily.
3. Reassess your offerings
With a comprehensive customer profile in place, the next step is to look at your products or services in a fresh light.
Given what you know about the target audience, ask yourself:
Which features and benefits are most likely to attract new business?
Which may be of less interest or even discourage new customers?
Which should I place front and center in my marketing and paid advertising?
Which current customers, images, and copywriting should shape my messaging?
This analysis can lead to valuable modifications to your offering and yield new leads.
You’ll also want to reassess your target audience periodically. Every six months or once a year, do some additional primary research and refine your customer profile accordingly. As the marketplace shifts and evolves, your ideal clientele may change with it. Get ahead of the curve, and you’ll also be one step ahead of your competition.
4. Research your competitors
As a marketer, one effective way to learn about what areas to focus on and which strategies to employ is by observing your competitors. This way, you can find out what strategies are already effective in your niche and how you can incorporate those into your marketing plan.
Here are a few things to consider:
Which social networks are they using?
Social media marketing has been a game-changer for e-commerce brands and business-to-business companies. Researching your competitor’s social media will allow you to look for the content that receives the most engagement. The common channels to review include Facebook, Instagram, Twitter, LinkedIn, TikTok, and Snapchat.
Research how often they post, what they post, the influencers they tend to work with, and so on. Such research will also identify the most suitable social media platforms with an already existing target audience base. You can target the same audience with your content, knowing they are already interested in that niche.
For example, if your target audience regularly interacts with your competitors’ posts on TikTok, it might be time to jump on the bandwagon.
What are their customers’ pain points?
Pain points are the problems your target customers are already facing and looking to solve. Identifying your audience’s pain points lets you present your products as viable solutions in a targeted way. You and your competitors probably try to solve the same pain points for your customers. While researching your competitors, identify where their approach is lacking and try to better address solutions in those areas with your marketing plan.
5. Leverage existing customer data
While devising your marketing plan, make use of the insights you have already gathered from existing customer records. Identifying patterns in this data and properly using them in your plan will help you build a more effective marketing strategy.
Use Google Analytics data.
Google Analytics is a great resource to identify patterns among your target audience. Google’s demographic information gives you insight into the age and gender of your audience. This data is broken down into affinity markets and in-market segments and gives valuable audience insights. These analytics allow you to know your audience better and create more relevant content for them, which will be more effective in generating sales for your business.
Review customer relationship management data.
A customer relationship management (CRM) system is software that allows companies to manage their interactions with potential customers. Customer data like name, age, contact information, certain behaviour (like items viewed and previously purchased), and other engagement data is stored neatly in this software. CRM analytics show you more about your customers and your target audience at a glance.
This software can also give valuable insights you can use to identify patterns for different purchases, helping you segment your audience. Common patterns to look for include:
How did they find your site for the first time?
How many interactions did it take to complete a purchase?
Did they use coupons?
Are they typically on mobile or desktop devices?
Which social media platforms do they use?
Social media has proven its mettle when it comes to audience analytics and related tools. Knowing which social media platforms your audience uses can help you decide what analytic tools to invest in.
Facebook allows you access to the demographics of your audience and their interests through Facebook analytics. Similarly, Twitter provides ad accounts with a follower dashboard that tells you more about the interests of your followers. These analytics can help you identify your target audience and also help you create proper strategies for maximum content engagement.
Start building your target audience
Finding the right audience is crucial for the effectiveness of your marketing campaign. Not everyone is interested in what you’re selling or what you have to say, so you need to identify whom to focus your efforts on.
Target audience analysis allows you to make personalised content for your customers that complies with their user persona. This allows you to solve and address their pain points and build long-term relationships with your customer base. Finding your target audience helps you build a more cost-efficient marketing strategy and saves valuable time and resources. It also encourages a great return on investment and helps your business grow sustainably.
Take the time to identify your target audience and the problems they face. Then, build your marketing strategy in a way that addresses their pain points and provides your audience with useful solutions.
Starting your own business in UK
We hope you’ve found this article about how to identify your target audience helpful. If you need help in any other areas, use our comprehensive checklist for starting your own business in the UK – it covers everything from developing your initial business idea to finding your first customers. Fill out the short questionnaire to get a personalised to do list sent straight to your inbox.