Optimizing a target market can help maximize your marketing ROI; however, only 7 percent of midsize businesses list focus as their primary competitive strategy.1 Take advantage of this opportunity by asking yourself the following questions to stay focused on your market niche:
1. Who will value my product or service?
Identify the needs your product or service fulfills by carefully considering the buying power, spending habits, lifestyle trends and demographic background of your customer base. Conduct email and newsletter surveys to gauge the priorities of promising market segments.
2. What problems does my product or service solve? What convenience is provided?
Examine psychographics such as consumer interests, values and purchasing behaviors to determine how your product or service is fitting into your target market’s lifestyle. If your company sells compostable products, for example, narrow your marketing efforts and focus only on those with environmental conservation interests.
3. Are my customers always my consumers?
Many businesses overlook the important fact that the person purchasing the product or service may not be the end user. For instance, if a business owner, parent or grandparent purchases your product, is an employee, child or grandchild the one using it? Understanding how your product or service is being used will help you optimize your target niche.
4. What existing data can I use to better reach my target market?
Use objective data to gather helpful insights. If you have a current customer database, leverage that information to find characteristics and qualities your best customers have in common. You can then use that information to target similar customers. Also, if you sell a product or service comparable to others already on the market, do your research on the types of customers purchasing products similar to yours.
5. What are my competitors doing?
Evaluate your competition’s public-facing marketing efforts to isolate a niche audience they may be overlooking. If you can’t identify your existing competition, it’s not necessarily a positive sign. While it may mean other businesses haven’t yet identified your niche, it can also mean businesses tried to target this group and were unsuccessful. That’s why it’s important to conduct a thorough competitive analysis and test the market’s receptiveness to your product before refining a niche market.