10 Questions to Ask Before Determining Your Target Market
The better you understand your customer, the faster your business will grow. But new ventures often struggle to define their target market and set their sights too broadly.
"We often overestimate the market size, and in many cases there may not be one at all," says Robert Hisrich, director of the Walker Center for Global Entrepreneurship at the Thunderbird School of Global Management in Glendale, Ariz.
Who would pay for my product or service?
First, try to understand the problem that your product or service can solve, says Greg Habstritt, founder of SimpleWealth.com, an Alberta, Canada-based advice website for small-business owners. Then, use that information to help determine who would be willing to pay for a solution. "Not only do [your potential customers] need to have the problem, but they need to be aware they have the problem," Habstritt says. He recommends using Google's keyword tool to see how many people are searching for words related to your business idea.
First, try to understand the problem that your product or service can solve, says Greg Habstritt, founder of SimpleWealth.com, an Alberta, Canada-based advice website for small-business owners. Then, use that information to help determine who would be willing to pay for a solution. "Not only do [your potential customers] need to have the problem, but they need to be aware they have the problem," Habstritt says. He recommends using Google's keyword tool to see how many people are searching for words related to your business idea.
Who has already bought from me?
To refine both your target marketing and your pricing strategy, see who has already bought your product or service, says Amos Adler, president of Memotext, a medication compliance app maker in Bethesda, Md. You can gain valuable insights by releasing the product in a test phase and letting potential consumers speak with their wallets.
To refine both your target marketing and your pricing strategy, see who has already bought your product or service, says Amos Adler, president of Memotext, a medication compliance app maker in Bethesda, Md. You can gain valuable insights by releasing the product in a test phase and letting potential consumers speak with their wallets.
Am I overestimating my reach?
It's easy to assume that most people will need your service or product. But rather than make assumptions, reach out to groups of potential customers to get a more realistic picture of your audience and narrow your marketing efforts. You can conduct surveys, do man-on-the-street type interviews in stores, or organize small focus groups. "We get so passionate about the idea and how good it is that we overestimate the market size," Hisrich says.
It's easy to assume that most people will need your service or product. But rather than make assumptions, reach out to groups of potential customers to get a more realistic picture of your audience and narrow your marketing efforts. You can conduct surveys, do man-on-the-street type interviews in stores, or organize small focus groups. "We get so passionate about the idea and how good it is that we overestimate the market size," Hisrich says.
What does my network think?
As you try to understand your target market, it may be challenging -- and expensive -- to seek feedback from potential consumers through surveys, focus groups and other means. But you can tap into your social networks to get free feedback. Many people in your extended network will likely be willing to take the time to give you opinions and advice, says Bryan Darr, founder of Mosaik Solutions, a data analytics company in Memphis, Tenn.
As you try to understand your target market, it may be challenging -- and expensive -- to seek feedback from potential consumers through surveys, focus groups and other means. But you can tap into your social networks to get free feedback. Many people in your extended network will likely be willing to take the time to give you opinions and advice, says Bryan Darr, founder of Mosaik Solutions, a data analytics company in Memphis, Tenn.
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