12 Ways To Measure Your Marketing Impact

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With the proliferation of tools for both measuring and automating your marketing efforts, startups aren’t exactly wanting for real-time marketing data. But while spreadsheets and dashboards are nice, actually being able to prove your marketing works is far more useful.

Interested in how other startups are measuring their marketing efforts, I asked a group of entrepreneurs from the Young Entrepreneur Council to share how they currently track their successes (and failures). Their best responses are below:

1. Tracking

“Now that high-quality content has so many benefits in the marketing world, it’s important to track all its different uses. For example, when you share specific pieces of content, use Buffer to track it. Or, when you send someone an email that includes a specific type of content, use HubSpot or Infusionsoft to track the results. It can be as simple as tracking the clicks on your recent post that’s in your signature line.”

John Hall

2. Acquisition Channels

“We track every single acquisition channel through which our users register. This includes blog posts, press, organic search, paid ads, partnerships, etc. We do weekly meetings to review the data. It shows which channels convert the highest, generate the most loyal users and more. This data signals which channels to “double down” our efforts on and which to let die.”

Danny Boice

3. Google Analytics

“We place heavy focus on margins to optimize ROI on Adwords marketing campaigns. We want to constantly optimize our spending and make sure we get the most conversions possible on targeted customer acquisition cost. We use Google Analytics to do this mostly.”

Pablo Palatnik

4. Iterative Testing And Strategizing

“We end planning sessions with different hypotheses to test and measure. Lean, agile marketing is baked into our process, and we’re always thinking about the goals of each action and variations of actions to be tested. Right now, analyzing data like open rates, click-throughs and social performance from content and formatting is shaping our email marketing strategy iteratively without slowing us down.”

Lauren Perkins

5. Inbound Leads

“The biggest thing we use data for is tracking inbound leads. We experiment all the time. We change up our welcome email, give a phone call instead, attach explainer docs and then see which ones convert. If you don’t use data, you’ll have to guess without any evidence.”

John Meyer

6. A Marketing “Stack”

“Our marketing stack includes Segment.io, Marketo and Salesforce.com. We use Geckoboard to make the data available to anyone in our company and display it on screens around the office. My philosophy is that any number important enough to report to our board of directors should be available to employees all the time, and we have biweekly meetings to discuss trends in our key marketing metrics.”

Ryan Buckley

7. Salesforce

“We’re using Salesforce.com to track the productivity of our marketing efforts, which are segmented into a variety of categories like campaigns, lead types, company types and more. Marketing really is the top of the sales funnel, and with Salesforce.com, we can create and share several dashboards and reports to use across the team. We can then follow the sales process from beginning to end and use the quantitative data to make improvements to our processes.”

Doreen Bloch

8. Cost Per Acquisition

“Marketing dashboards can bog you down with extraneous data. CPM, CTR, impressions and impression share — it’s enough to bury you in numbers. The way that we stay afloat is the discipline of only looking at the king of marketing metrics: CPA, or the cost per acquisition. Ultimately, marketing exists to move the needle on acquisition. If you don’t know how much each new customer costs, you’re just throwing your money out the window.”

Emerson Spartz

9. Customer Engagement

“Data informs almost every decision we make, and it allows us to communicate with our users in a way that is thoughtful and impactful. We recently launched engagement campaigns based on behavioral data, and we’re analyzing the successes and failures of those campaigns to create content that improves user experience while helping achieve our marketing goals!”

Erica Bell

10. Customer Lifetime Value

“Customer lifetime value (LTV) is a great way to reveal the quality of customer segments. We segment our customers by referral source (ad campaign, social network, etc.) and look at their LTV. Just because an ad is converting doesn’t mean it will bring in high-LTV customers. Word of mouth and social network referrals lead to customer LTVs that are worth several times more than the ones that come from some of our ad campaigns, which is apparent when you look at the churn rate for each customer segment. Conversion rate can easily become a vanity metric, but focusing on LTV and churn are how you build a long-term business.”

Jared Brown

11. Audience Opinion

“It’s important to track your marketing efforts so you can see what’s working and what isn’t. Our team collects information and suggestions directly from our customers. We want to go straight to the source to get quality feedback, and the customer using your product will have the best insight. Social media is also an indicator that can identify which topics seem to be sparking a conversation in your customer community.”

Michael Patak

12. Data Collection

“In marketing, data is crucial — it’s how we find out if our creativity is actually delivering. We use what’s called dollar productive activity (DPA) metrics, such as how many calls/emails/meetings occurred and how many of those activities converted into a closed deal. There’s a very distinct difference between being busy and being effective. From these metrics, we can see if our activity is actually effective. If we notice that calls are working better than emails, we adjust. Also, if we know that it takes three calls to get one closed deal and our goal is 10 deals per week, then we can work that math into our goals and ensure that our sales team is making 30 calls per week.”

Jason Jannati

Source: Scott Gerber

Complete Media Inc is a Sioux Falls marketing, advertising, website design and web hosting company specializing in web design, maintenance and hosting services.
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Tanner Chambers – Production Strategist

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Tanner is a Minnesota-born graphic designer with a background in television journalism, broadcast technology and marketing. He landed his first TV job while in college, working first as a part-time assistant webmaster and then as an associate producer for Valley News Live in Fargo, North Dakota. He graduated from Minnesota State University Moorhead in 2014 with a Bachelor of Science studying graphic design and mass communications.

A marketing internship brought him to Sioux Falls in the summer of 2014, where he continued to add to his experiences, working as an advertising copywriter, KELOLAND reporter, non-profit administrative assistant, business-to-business broadcast technology marketer and digital freelance artist specializing in graphic design, videography and motion graphics.

Tanner joined the Complete Media team in October 2016 and has thrown himself into his work, developing built-to-last business brands while expanding his web skill set with HTML coding, email and web builders, WordPress, Google AdWords, Facebook ads and more.

He and his wife live with their three small dogs near downtown Sioux Falls.

Reach Vs. Frequency

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Is it more effective to touch 100 potential customers once or 25 potential customers 4 times?

Reach and frequency are terms generally used when planning advertising campaigns. However, the concept of reach and frequency applies to any promotional activity you undertake: direct mail, direct selling, and even networking.

Reach is the number of people you touch with your marketing message or the number of people that are exposed to your message. Frequency is the number of times you touch each person with your message. In a world of unlimited resources, you would obviously maximize both reach and frequency. However, since most of us live in the world of limited resources we must often make decisions to sacrifice reach for frequency or vice versa.

For example, an air conditioning repair service who has decided to do a direct mail piece has to decide whether to mail the entire Dallas/Fort Worth Metroplex once or to mail a quarter of the Metroplex four times. An attorney who receives many of her clients through networking may have to decide whether to attend one weekly networking meeting or four different monthly meetings.

When faced with decisions of reach vs. frequency remember this rule of thumb:

Reach Without Frequency = Wasted Money.

Marketing is the process of building a business relationship with potential customers. Have you ever established a lifelong friendship with someone you had contact with only once? Probably not. Generally, friendships (and all relationships, for that matter) grow as a result of frequent contact over time. Even when the potential to form a great friendship is there at the first encounter, it is unlikely it will grow without nurturing.

Seth Godin in his book Permission Marketing uses an analogy of seeds and water to demonstrate the importance of assuring adequate frequency in your promotional campaigns. If you were given 100 seeds with enough water to water each seed once would you plant all 100 seeds and water each one once or would you be more successful if you planted 25 seeds and used all of the water on those 25 seeds?

While intuitively and even conceptually we understand the importance of frequency to successful promotional and sales campaigns, somehow when it comes to actually implementing the campaign, we opt to sacrifice frequency for reach. And then we complain about the ineffectiveness of our promotional efforts. Undoubtedly one of the biggest wastes of marketing dollars is promotional activities that are implemented without adequate frequency.

When faced with the decision of mailing one direct mail piece to 10,000 people or mailing to 2,500 people four times think about the fate of those 100 seeds you can water only once. Unless you have water rights and can obtain additional water, opt for less reach and more frequency.

Source: Julie Chance

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What Are Your Long-Term Marketing Strategies?

Developing a marketing plan takes time. It is a step-by-step process that includes identifying and researching your target audience, understanding your competitive position, branding, messaging, separating your business from the competition, mapping out your marketing mix and more. Establishing a marketing plan is one of the most important things you can do to ensure the success and sustainability of your business.

In order to create a successful marketing plan, you will first need to define your marketing strategies. Simply focusing on your short-term successes will put your business in a bad position for future growth.

Long-Term Marketing Activities

Long-term activities establish brand awareness and continue to produce results even years down the road. Without long-term marketing strategies, short-term success may be short-lived. Where will your business be in five years? How about in 10 or even 30 years? What initiatives are you going to put in place to reach your goals further down the road? Growing your business takes time and you need to have a plan for every step or milestone along the way.

Here are a few tactics to achieve long-term marketing success:

Search Engine Optimization (SEO)

SEO is a long-term play that can take several months, but it is crucial for success because organic search engine traffic has been found to be the best source of B2B leads. Knowing your audience and optimizing your website for keywords and phrases that potential customers would use in their online search is critical to being found on the Internet. SEO is an ongoing process and to do it effectively takes time. Businesses should consider engaging experts they can trust to keep their website optimized.

Public relations (PR)

PR efforts, in general, are proactive actions that positively build a company’s brand online and offline over the long term.  PR teams often accomplish goals by strategically sharing information with relevant media outlets. A well-executed PR strategy builds over months, not days, and takes time to succeed.

Publishing and Promoting Content

Developing a stream of fresh, relevant content like newsletters, tips or blog posts will result in quality traffic to your website, but will also place you among the top thought leaders in your field. Content that is posted, updated and archived on a regular basis will provide you great ammunition for long-term nurture campaigns and encourage visitors to return.

Social Media

As a collection of communication channels, social networks can be used to achieve both short-term and long-term strategies. In a short-term context, you can use it to monitor and manage your online reputation. In a long-term context, you can use social media to promote content, support lead generation activities, and engage in online communities.

Engaging in social media is necessary and important because social networks are increasingly considered one of the top channels for generating brand awareness.

At the end of the day, it’s a finely tuned balancing act. The key is to build a marketing plan that values and achieves short-term and long-term marketing strategies simultaneously. Doing so will ensure that your business is better poised to prosper for years to come.

Source: Launch Marketing

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‘Everyone’ Is Not A Demographic: A Guide To Target Markets For Small Businesses

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What Is A Target Market?

Simply put, a target market is a specific group of people you have decided to target with your products or services. It could be a large market or a niche market.

Sounds simple enough, right? Well, the concept of target markets can become much more complicated if you offer a product or service with wide appeal, or you have a diverse customer base. If you sell to “everybody,” then how are you supposed to define your target market?

The Difference Between A Target Market And A Demographic

Although target market and demographic are closely related terms, they are not interchangeable.

Compared to demographics, target markets tend to be much broader. This is because, for many businesses, their products or services appeal to a wide range of individuals. Target markets can also be affected by considerations such as buying cycles, product shelf life and other elements that may not be driven by people who might be interested in buying what you’re selling. In addition, marketers often take the long-term profit potential of a target market into consideration when developing their models and marketing strategies, meaning that they have to focus on the bigger picture.

Demographics, on the other hand, are subsets of a target market that share particular attributes. For example, many television advertisers purposefully target the coveted (and notoriously fickle) 18-35 age demographic. That does not necessarily mean that people who are older than 35 fall outside of the advertiser’s target market – it just means they are part of a different demographic.

In other words, you can think of target markets as a collection of demographics that may be interested in your product or service.

How To Identify A Target Market

So, now we know a little more about what a target market is (and isn’t), how do you go about identifying one for your business?So, now we know a little more about what a target market is (and isn’t), how do you go about identifying one for your business?

Start With Your Existing Customer Base

One of the first steps to identifying a target market for your business should be to take a long, hard look at the people who already buy from you. Even if your current customers seem like a diverse bunch, the chances are pretty good that they will share at least one or two common characteristics. If they don’t, perhaps a shared interest is the common thread.

Once you begin to identify commonalities between your regular customers, you can begin to use this information to refine your existing customer base into a target market.

When researching target markets, it’s vital that you start broad, but become increasingly granular as you progress. For example, you might start by identifying homeowners as a potential demographic, but then drill down deeper and discover that homeowners with older children, earning a certain annual income who work in a particular sector are your best customers. This level of granularity makes it easier to tailor your messaging to appeal to these individuals, even if your customer base is actually much broader.

A Note On Demographic ‘Gray’ Areas

One of the most common mistakes made by businesses of all sizes is a failure to recognize that not everyone fits into neat little demographic boxes.

For example, you can use gender as a starting point when conducting research into your existing customer base. However, gender isn’t always binary and some people, such as transgender individuals, may not be easily categorized into narrow demographics. It’s important to be as inclusionary as possible when looking at potentially sensitive demographics, especially in the imagery and language used in your messaging, otherwise you risk alienating members of your community and prospective customers.

Refining Market Segmentation

So, if a target market doesn’t encompass all of your prospective customers, what can you do? Segment and refine your target market.

Market segmentation can help you understand how your products or services appeal to individuals across several demographics within your target market.

Market segmentation typically falls into four distinct categories:

• Geographic
• Demographic
• Psychographic
• Behavioral

Let’s take a look at each of these categories in more depth.

Geographic

As its name implies, geographic segments can be used to target people living in a specific area. This could be as large as an entire continent, or as regionalized as a specific bus stop.

Geographic segmentation typically includes at least one or two of the following criteria:

• Continent
• Country
• Country Region
• City
• Cities/Towns Of A Specific Population Density
• Climate
• Areas With Specific Population Thresholds
• Localized Areas (Neighborhoods, Specific Retail Outlets)

Demographic

Yes, we’ve been talking about demographics throughout this post, but demographic targeting is an important part of market segmentation. Since we already know what a demographic is, let’s look at the most commonly used demographics:

• Age
• Gender
• Family Size
• Household Income
• Occupation
• Level Of Education
• Religion
• Race
• Nationality

Psychographic

Psychographic segmentation categorizes people by their personality, interests and other factors. This can be a powerful way of marketing the same product to people from seemingly radically different demographics, and plays a crucial role in businesses’ target marketing.

Psychographic segmentation can focus on:

• Personality
• Attitude
• Personal Values
• Lifestyle
• Social Class
• AIOs (Activities, Interests, Opinions)

Behavioral

Behavioral segmentation refers to – yep, you guessed it – how people behave. However, this type of segmentation refers specifically to what potential customers expect from a product or service, and how their actual experiences influence their behavior.

Behavioral segmentation includes factors such as:

• Benefits Sought
• Buyer Readiness
• Degree Of Loyalty To A Brand/Product
• User Status
• Occasions

Hitting The Target (Market)

Just because your product or service appeals to a broad range of people doesn’t mean you can’t learn more about them and market your business more effectively as a result.

Source: Dan Shewan

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How Does the Target Market Media Consumption Affect the Strategy?

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Knowing the media-consumption habits of a target audience can help a business owner create an effective marketing campaign. For example, if target consumers favor a particular media channel – such as a television station, radio station, magazine or newspaper – you can use that information to deliver your marketing messages directly to them.

Consumption

Your target customers may enjoy a particular aspect or offering of the media channel. For example, they might watch a specific television program, listen to a particular radio show or flip directly to the sports section of the newspaper. Understanding media consumption habits in this respect helps you place your advertisement effectively within the media channel.

Context

It also helps to know what consumers are doing while they are using a media channel. Suppose a car dealership decides to reach its audience by advertising on a radio station in the morning. Knowing that most people are driving to work at this time of the day, the dealership might design an advertisement that speaks directly to commuters by explaining how a comfortable car can ease the pain of sitting in traffic jams. Similarly, if the dealership knows target consumers tune in to the radio station while they are busy working or making dinner, its advertisement might use loud jingles and sound effects to catch the listener’s attention.

Market Research

Business owners can hire a market research firm to help determine strategies for reaching a particular segment of the population. Market researchers draw on a large variety of techniques to study consumer behavior to create behavioral profiles and help advertisers tailor marketing campaigns to the consumption habits of their target audience. Researchers might use surveys, focus groups and questionnaires to generate a database of media consumption habits. They then use statistical methods to identify consumption patterns, providing valuable insights that help advertisers identify the most cost-effective strategies for reaching an audience.

Media Planners and Buyers

Media planners and buyers help businesses implement marketing campaigns. These experts can orchestrate complex strategies, such as airing television commercials in short bursts during periods when the target customers are likely to be watching. The alternative approach – airing commercials during every available period – would drain an advertising budget unnecessarily. While hiring all these marketing experts might seem expensive, the investment pays off if you can avoid wasting money on ineffective strategies.

Source: Stan Mack

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Six Ways to Help Your Employees Execute Your Vision and Strategy

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1. Keep explaining the “why” until they get it.

Remember that people are far more likely to execute a strategy wholeheartedly — even if they disagree with it —if they understand the “why.” To paraphrase Nietzsche: “People can handle almost any What, if they understand the Why.”

If you weren’t involved in the decision, i.e. mid-level manager, do your homework so you thoroughly understand the rationale. Get feedback on whether your explanation makes sense. Explain the reason for the initiative to someone not in your company and see if they understand it and can see its validity. Tweak your message until it makes sense to someone without your background knowledge of the situation.

Also, don’t assume explaining it one time will suffice. Often when people are shocked by news, their brains lose their ability to process information.

2. Anticipate objections and generate valid answers.

If you are part of the senior team that made the decision, this should be straightforward. If you weren’t and don’t have enough information to answer some of the potential objections and questions that might be raised, seek out the answers.

Here’s an example of how you can frame your request: “I want to make sure I present a compelling message to the team, so part of what I’ve been doing is making a list of potential questions and objections. There were four that I couldn’t answer because I don’t have the information. Can I get your take on them?”

3. Present a compelling “future story.”

Describe what this new approach will do for them, their customers, and the company. Describe what you envision things being like 6-12 months in the future.

Think in terms of telling “future stories” such as: “So for instance…with this new approach…when an existing client does X, instead of Y happening, we’ll now respond by doing Z…which will enable you to new, desired response and the customers to get whatever increased value the new employee response will deliver.” Notice how asking this makes you look like the nothing-short-of-excellence person you are.

4. Make sure you address the WII-FM for all parties.

As you describe the future story, make sure you describe how this will benefit them (the WII-FM, or the “what’s in it for me?”), their customers, and the company (and therefore their job security).

5. Don’t BS.

While you want to explicitly state the good that this change will produce, you don’t want to be dishonest. As you know from being on the receiving end of “company spin,” all it takes is one dishonest message from a leader to irrevocably damage trust.

You also don’t want to be that kind of leader, right?

So, don’t try to pretend certain outcomes or changes are a great thing when they actually are a net loss for your team. Also, don’t try to hide from the downside realities. Honestly acknowledge them.

6. Relate human-to-human, not role-to-role.

Often, I see leaders putting on their “game face” and relating as “The Leader,” rather than being a genuine human being.

This alienates employees. Don’t be afraid to be real, to be authentic. Judiciously share the concerns you have about its effect on your people and how you took that into consideration. Interviews with employees at client companies going through downsizings have repeatedly shown me how powerfully it affects employees when they can see — and hear — how much their leader cares about them and the impact their decisions will have on them.

The more real you are, the more “bondable” you become, and therefore…the more your people will want to do their best for you.

Source: David Lee

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How to Create a Target Market Profile

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Creating a target market profile and positioning statement is a process that helps business owners to identify and communicate with the prospects that offer the greatest chance of sales success. A target market profile is a concise description of the type of prospect you want to sell to. A positioning statement is a brief summary of the way you want prospects to perceive your product or service.

Define the target market for your products or services as precisely as possible. A target market profile identifies the characteristics of the prospects most likely to purchase from you. Use characteristics such as age, gender, location, income level or education to build the profile. Age or gender are important characteristics if you sell products such as clothing or children’s games. Focus on location if your products are only available in certain areas or if they are location-specific, such as hiking or skiing equipment. Income is important if your products carry a premium price.

Profile business customers by a different set of characteristics, including size of business, industry sector and location. Identify the decision-makers in target companies. The decision to purchase your product may involve business, financial or technical personnel as well as senior executives if the purchase represents a significant capital investment. An example of a business target market profile is medium-size companies in the manufacturing sector, based in the Midwest, with a turnover of more than $2 million.

Research the interests and preferences of your target market to find out what they feel is most important about a product like yours. Approach customers for feedback, asking them about important features and benefits. Consumers might consider factors such as “the product improves my lifestyle,” “it saves me money” or “it makes me feel healthier.” For business customers, identify the opportunities and problems that face different types of businesses by monitoring customer feedback or reviewing industry surveys. Challenges such as reducing costs, improving quality, speeding up time to market, or improving competitiveness are issues facing many types of business.

Build a more detailed profile of your target audience by capturing information on their interests and requirements on your website. Offer website visitors publications or special offers that they can download after completing a registration form. Provide a page where visitors can create and update their own profiles and request certain types of information from you. Analyze their preferences and record the information they request to build personalized profiles.

Identify the product benefits that represent the greatest value for your customers. Compare the important factors with the performance, features and benefits of your products. If your product aligns with the main customer factors, use those factors as the basis for your positioning statement. Compare your product with competitors’ offerings to assess how you can differentiate your product. Relate your differentiation to the most important customer values.

Create a positioning statement for each distinct customer sector. Use a consistent format such as “for this target audience, our product provides these important benefits that our competitors cannot match.” Use the positioning statement to create compelling messages to motivate the prospect to buy. Incorporate the key elements of the positioning statement in all your marketing communications so that prospects receive consistent messages at each point of contact with your company. Share with employees target market profiles and positioning statements so that they not only have awareness, but also going forward they are constantly reassessing the criteria used to define the target audience and how elements may influence that audience and what adjustments might need to be considered. It is crucial to the culture of any company that employees are keenly aware of who it is they serve: the customer. Who they work for is the boss.

Source: Ian Linton

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How to Define Your Target Marketing in 5 Steps

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What’s my target market? What should it be? How would I know? Here’s a list of five things that will help you figure it out.

1. Don’t try to please everybody.

Strategy is focus. Say you’re running a restaurant; which of these three options is easier?

  • Pleasing customers 40 to 75 years old, wealthy, much more concerned with healthy eating than cheap eating, appreciating seafood and poultry, liking a quiet atmosphere.
  • Pleasing customers 15 to 30 years old, with limited budgets, who like a loud place with low prices and fast food.
  • Pleasing everybody.

I really hope you chose one of the first two, and not the third. Because this is the essence of target marketing—divide and conquer.

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U.S. census data divides into demographic segments.

2. Learn market segmentation.

It’s about segments, like pie segments or orange segments, except that in this case it’s segments of a total market. In my “divide and conquer” thought above in the first point, those are segments. In the illustration above, U.S. census data divides into demographic segments. Demographics are the old standards like age, gender, and so on.

3. Use segmentation creatively.

Don’t just settle for age, gender, and economic level. When I was consulting for Apple Computer, we divided the market into user groups:

  • Home
  • School
  • Small business
  • Large business
  • Government

I also liked a shopping center segmentation that divided its market into so-called psychographic segmentation:

  • Kids and cul-de-sacs were affluent upscale suburban families, “a noisy medley of bikes, dogs, carpools, rock music and sports.”
  • Winner’s circle were wealthy suburban executives, “well-educated, mobile executives and professionals with teen-aged families. Big producers, prolific spenders, and global travelers.”
  • Gen X and babies were upper-middle income young white-collar suburbanites.
  • County squires were wealthy elite ex-urbanites, “where the wealthy have escaped urban stress to live in rustic luxury. Affluence, big bucks in the boondocks.”

I knew a business that segmented its business customers into decision-process types as well:

  • Decision by committee
  • Decision by functional manager
  • Decision by owner

Any of these creative segmentations can help you set a target market.

4. Consider your own unique identity too.

Your business probably reflects who you are and what you like to do, as well as what you do best. Marketing to people you like is an advantage. If you like the feel of small business better than the big corporate giants, then you’re probably better off setting the small business as a target market.

As this business—Palo Alto Software, the host of Bplans—grew up, with business plan software, its founder (that would be me) was more comfortable with the do-it-yourself entrepreneur and business owner than the high end consultants, so we ended up targeting the do-it-yourselfers in business.

So, somebody who loves fine food, tastefully prepared and served, is probably more comfortable with an upscale target market than with price-sensitive young families.

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5. Use strategic segment intersections.

For example, in the diagram here, the social media services that Have Presence offers are targeted to small business owners who:

  • Want outside help with their social media; and
  • Value business social media; and
  • Have budget to pay for the service.

Defining target markets makes your life easier. Do it well as soon as you can, and keep reviewing and refreshing as you go along.

The right target market increases your chances of success because you can communicate better with a well-defined group, and that holds expenses down and makes results better.

Source: Tim Berry

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How To Define Your Target Market

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To build a solid foundation for your business, you must first identify your typical customer and tailor your marketing pitch accordingly.

Given the current state of the economy, having a well-defined target market is more important than ever. No one can afford to target everyone. Small businesses can effectively compete with large companies by targeting a niche market.

Many businesses say they target “anyone interested in my services.” Some say they target small-business owners, homeowners, or stay-at-home moms. All of these targets are too general.

Targeting a specific market does not mean that you are excluding people who do not fit your criteria. Rather, target marketing allows you to focus your marketing dollars and brand message on a specific market that is more likely to buy from you than other markets. This is a much more affordable, efficient, and effective way to reach potential clients and generate business.

For example, an interior design company could choose to market to homeowners between the ages of 35 and 65 with incomes of $150,000-plus in Baton Rouge, Louisiana. To define the market even further, the company could choose to target only those interested in kitchen and bath remodeling and traditional styles. This market could be broken down into two niches: parents on the go and retiring baby boomers.

With a clearly defined target audience, it is much easier to determine where and how to market your company. Here are some tips to help you define your target market.

Look at your current customer base.

Who are your current customers, and why do they buy from you? Look for common characteristics and interests. Which ones bring in the most business? It is very likely that other people like them could also benefit from your product/service.

Check out your competition.

Who are your competitors targeting? Who are their current customers? Don’t go after the same market. You may find a niche market that they are overlooking.

Analyze your product/service.

Write out a list of each feature of your product or service. Next to each feature, list the benefits it provides (and the benefits of those benefits). For example, a graphic designer offers high-quality design services. The benefit is a professional company image. A professional image will attract more customers because they see the company as professional and trustworthy. So ultimately, the benefit of high-quality design is gaining more customers and making more money.

Once you have your benefits listed, make a list of people who have a need that your benefit fulfills. For example, a graphic designer could choose to target businesses interested in increasing their client base. While this is still too general, you now have a base to start from.

Choose specific demographics to target.

Figure out not only who has a need for your product or service, but also who is most likely to buy it. Think about the following factors:

•   Age
•   Location
•   Gender
•   Income level
•   Education level
•   Marital or family status
•   Occupation
•   Ethnic background

Consider the psychographics of your target.

Psychographics are the more personal characteristics of a person, including:

•   Personality
•   Attitudes
•   Values
•   Interests/Hobbies
•   Lifestyles
•   Behavior

Determine how your product or service will fit into your target’s lifestyle. How and when will your target use the product? What features are most appealing to your target? What media does your target turn to for information? Does your target read the newspaper, search online, or attend particular events?

Evaluate your decision.

Once you’ve decided on a target market, be sure to consider these questions:

•   Are there enough people who fit my criteria?
•   Will my target really benefit from my product/service? Will they see a need for it?
•   Do I understand what drives my target to make decisions?
•   Can they afford my product/service?
•   Can I reach them with my message? Are they easily accessible?

Don’t break down your target too far! Remember, you can have more than one niche market. Consider if your marketing message should be different for each niche. If you can reach both niches effectively with the same message, then maybe you have broken down your market too far. Also, if you find there are only 50 people that fit all of your criteria, maybe you should reevaluate your target. The trick is to find that perfect balance.

You may be asking, “How do I find all this information?” Try searching online for research others have done on your target. Search for magazine articles and blogs that talk about or to your target market. Search for blogs and forums where people in your target market communicate their opinions. Look for survey results, or consider conducting a survey of your own. Ask your current customers for feedback.

Defining your target market is the hard part. Once you know who you are targeting, it is much easier to figure out which media you can use to reach them and what marketing messages will resonate with them. Instead of sending direct mail to everyone in your ZIP code, you can send it only to those who fit your criteria. Save money and get a better return on investment by defining your target audience.

Source: Mandy Porta

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