Key Strategies for Effectively Defining Your Target Market

Defining your target market

Why this matters:

Customer purchase decisions are often made based on rational reasons as well as emotional ones. The more you understand your customer, the better you can target your marketing messages to what is important to them. You may also discover that your customers are totally different from whom you thought they were. How many customers do you really need? We live in a global village with a population of over 9 billion people. That’s why we often assume we need millions of customers to be successful. Nope! To make the New York Times Best Seller list, a book only needs to sell 5000 copies. So I use 5000 as my simple rule of thumb for the number of customers to set as your initial goal. If you can find 5000 customers and give them a compelling proposition to spend $20 a month on your product or service, you will have a business with annual revenues of $1,200,000. Assuming you have a 10% operating margin, you will have earnings before interest, taxes and amortization (EBITDA) of $120,000. A pretty decent business!

Growth is a choice not a commandment If you can build your business to consistently make these 5000 customers happy, you will have;

• A successful business

• A solid foundation to grow if you choose to

Growth is not imposed. How fast and how far you grow your customer base is a deliberate choice. It must always be driven by your decision to commit the time and resources needed to serve more people within your target market. Be aware that if your business did not exist, the world would not end. Let that sobering thought guide you in setting your growth ambitions. Move at your own pace. Hyper-growth = abnormal growth which means some things will break in the process. If you choose hypergrowth, take stock of what could break along the way such as processes, team morale, standards, personal relationships, etc. If you accept the tradeoffs and have your mitigation plans in place then GO FOR IT! If not, adjust your growth ambition to your level of readiness.

Have questions, comments or want to suggest a topic for the series? Send Juliet Anammah a short email at info@cgandrstrategy.com Disclaimer The content in this blog is intended to provide helpful and informative material on the subjects addressed. The content is offered “as is,” with no guarantees of completeness, accuracy, timeliness, or the results obtained from the use of this information. The author and publisher of this blog disclaim all liability and responsibility for any actions or results arising from the use of the information contained in this article, to the fullest extent permissible by law.