Intro: 0:05

Welcome to the Small Business Marketing Huddle. Our show is all about taking action. We equip you with the marketing knowledge and confidence you need to make real progress. So let's huddle up and listen in to the latest episode with your host, Lily Richmond.

Lily Richmond: 0:31

Hey, this is Lily. Thank you for being here today. If you're already subscribed to the show, thank you so much. I do really appreciate you being here and I'm also really stoked that you are taking some proactive steps to take control of your marketing. Now, this is your first time here. Don't forget, hit the follow or subscribe button in your favourite podcast player, because today, like in every episode, I'm going to cover a marketing topic that I think you really have to learn if you want to master your marketing. And make sure you listen until the end, because I'm going to give you some practical steps and details of how to get a handy workbook to come up with your target market segments and ideal customer for your individual business.

Lily Richmond: 1:17

Today is part two of seven in my series on where to start with your marketing when you're just starting up in business. Now, in part one, I gave you some practical steps on how to make your product or service totally irresistible to your target market, and you'll be able to find that in episode six if you haven't listened to it already. But today, in part two, I'm going to give you the lowdown on how to define your target market and hone right in on who your ideal customer is Because, ultimately, your success is going to hinge on knowing exactly who your customers are and what makes them tick. Here's one I've worked with small business owners. They've got a pretty broad idea of who their target market is, but that's just it really. It's really broad and often it's too broad to be of any real value when it comes to being effective. Think of it this way your goal is to make your product or service seem like it was made just for your customer, and your marketing communications speak directly to them as an individual, and you can only achieve that with a clearly defined target market and ideal customer. So let's get into the terminology so you can understand these concepts better, and I thought it would be helpful if I used an example so you can visualize them in action.

Lily Richmond: 2:43

Let's consider an imaginary person called Joe, and they have celiac disease, which is an intolerance to gluten, and they decided to start a bakery that sells only gluten free products. So let's tackle what a target market is first, and we'll use Joe's bakery as an example. So your target market is the group of people who have a want or need for whatever it is you offer. This is the total opportunity that your business has to convert people into customers. So, in Joe's case, to keep it simple for now, their target market is broadly anyone with a gluten intolerance in their town.

Lily Richmond: 3:24

And I've started with a quite a broad definition of target market for this exercise today, because if you're just starting out in your business, it's important for you to be able to identify what your total market opportunity is. And why is that? Well, we want to know if there really is a viable market for the product or service that you're going to develop. We need to make sure that you have a market of a size that's going to enable you to make money from your new venture. So that's target market. I've kept it really broad. I would say, however, that when you are defining your target market, you do narrow it down, and when we go through the exercise later, you'll see I'm going to give you questions which are more specific and will allow you to have a much tighter defined target market. So next, we want to understand what market segments are.

Lily Richmond: 4:16

Now, these are distinct groups within your target market that either have specific needs or different uses for whatever it is you sell, and they might have a totally different motivation for buying. Now, how would this apply to Joe's Bakery, as an example? Well, they might have identified three clear segments within their target market, which is everybody with a gluten intolerance in their town. They've identified segment number one is people with celiac disease. It's a life threatening allergy to gluten, and so they definitely need gluten free products. But Joe also knows that there are going to be people in their town that do not eat gluten because they feel better when they avoid it, but they don't have celiac disease. So Joe defines this as segment number two. And then the third segment that Joe has identified is local cafes and restaurants who want to offer gluten free bread and other baked goods on their menus. Ok, so that's a business to business segment within Joe's overall target market. So can you see from that those people? They're buying the same product, but they have different motivations and different needs, so there might be some different treatment that we need to think about in terms of marketing to those three groups. Now I want to point out here with segments, your customers within your target market might not be diverse enough for you to even warrant using segments. So you've got to use your judgment on that. A lot of marketing is really super practical. So just take a look at this when you're doing the exercise and think do segments actually apply to me? Now some people might say, oh, you know, for a small business, you know it's overkill to have segments as well as a target market and an ideal customer. Well, I think it's important for you to just consider it Not necessarily use it, but consider it and I want you to understand the concept so you know what people are talking about when they say segments. So the third definition that we need to understand is an ideal customer, and this is a really crystal clear description of the person who it is that is most likely to buy from you. This is the person that you want to target with your marketing activity and who you want to have in mind whenever you are doing marketing, communications or social media, digital marketing. Here you want to be able to describe that person and you want to be able to build a really clear picture of them. Now, there are lots of names that get used for the term ideal customer. Things you might have seen are avatar, a customer persona, customer portrait or profile, buyer profiles there are lots of different terms for the same thing. So in Joe's business example it might be busy working mothers who have a child with celiac disease. Okay, I'm keeping it really simple. Right now we won't go into all of the detail of that person because I want to cover this in more detail in the exercise that we're gonna do in the next part of the episode. So that's target market, segments and ideal customer described, and have you noticed it gets more narrow as we go. So it's a little bit like an inverted triangle where you start really broad with your target market at the top, you then have segments and then you have your ideal customer in the point at the bottom of that inverted triangle. So that is targeting done and dusted. Now what are the important things that you need to know or to watch out for when doing this exercise?

Lily Richmond: 7:41

Firstly, I want to talk about niches. Where do they come into it? Everybody talks about finding your niche and I haven't even mentioned it. Well, a niche is just a very narrowly defined audience that you are going to serve, where there is generally very little competition. You could argue that in our example of Joe's bakery, that their target market is already a niche People who want gluten free baked goods within their town. That's actually quite a small segment of the overall market for baked goods in that particular town, right, so that is actually a niche.

Lily Richmond: 8:13

The idea really with targeting is that you want to be as narrow as possible but as commercially and financially viable as possible. Yes, there might not be any competition there, but there might not be enough business for you to make a viable return and keep your business afloat. Niche's do need to be lucrative and actually, if you think about your ideal customer, that's kind of a description of a niche in a lot of ways. Where Niche's work really really well is where you have an online first or digital only business, where you've got very little overhead and you can be highly targeted with the marketing tools that you've got available to you to reach those people. If you're a bakery or a plumber or a physiotherapist, a hyper focus niche could be a really challenging way for you to make a viable business. So I guess there's a wider lesson here that one size does not fit all when it comes to marketing. There is no silver bullet or one way to do things, but if you understand these principles. You can apply them and you can flex it to fit your own situation. You don't have to follow everything religiously into the letter.

Lily Richmond: 9:19

Okay, so next up, I'm gonna give you some actions that you can take away to define your target market segments if you have them and your ideal customer. But firstly, I wanna highlight as well that you want to do this exercise, and then you might go back and re-look at your target market and narrow it down further, or you might make it broader. You might realize you've been too narrow to start with, and my tip for you is to get to your ideal customer. You need to know who they are and you need to be able to describe them to a friend so they could actually picture them, because that's how you understand them in enough detail to be able to develop some great, effective marketing. So I've explained target market segments and ideal customer. How are you going to put this into practice? Well, after the break, I'm going to give you some practical steps so you can make it happen, and how to grab the workbook that gives you the space to get those ideas down on paper. Ok, first of all, I've created a workbook to go along with this episode, because I totally appreciate that you might be driving or you're unable to drop everything and follow these steps and write your outputs down, so I've added a link in the show notes or you can grab it on my website at . And that's number two.

Lily Richmond: 10:38

So let's start with your target market first. For the product or service that you've defined, we want to know who your target market is, and there are some questions that you need to ask yourself to be able to help you define it. So, number one I'd ask myself who has a need or desire for my product or service, and I'd want to describe who that person is. And how would you describe them? Firstly, the easiest way, and the one that springs to mind, is demographics. So their age, their gender, their sexual orientation, marital status, do they have children or do they only have pets? Where do they live? All of those sorts of things. It does help you build up a good picture, but you don't have to follow this to the letter.

Lily Richmond: 11:22

Another question I'd be asking myself is well, what geographical territory am I going to serve? Where is this target market physically located? I'd also, then, want to pick up some key points about their lifestyle. Maybe they're massively into fitness, maybe they love classic cars. What is it about that person? Maybe they love travel. What are some of the key aspects of their lifestyle? And then I think about the motivations of that target market. What are the reasons why they're buying that product? What's that deeper reason as to why they're buying? Now, a last question that I'd be asking myself is if I was selling business to business rather than business to consumer. What type of business are they? What size is their business? Why are they using this product and service and how are they using it?

Lily Richmond: 12:09

Now, as another side note, if you are selling to other businesses, you will absolutely love episode four of the podcast, which talks all about buyer roles. So buyer roles are really valuable to understand if you are selling business to business. So have a listen to that one too. I'll drop the details of that in the show notes as well. So that's how you define your target market.

Lily Richmond: 12:32

Second is do you have segments? So take a look at your target market that you've described. That's the next thing I want you to do. Are there groups of people here that have distinctly different needs or problems that they're trying to solve with your product or service? Are they buying it for completely different reasons. If the answer to that is no, then don't worry, skip past segments. You don't need it. But if you think that there are some real clear distinctions and types of groups of people that are gonna buy from you, then I would recommend that you do just jot them down for now and you can decide to use them or narrow down within those segments and only target certain ones, but just get it down on paper for now. So now you've done two things You've pulled together a really good description of your target market and now you've identified, if you have segments and you've given a bit of description around those two.

Lily Richmond: 13:23

The third thing I want you to describe is your ideal customer, and this is where you get to be really creative. What do they look like? What sort of job do they do? What do they do on their weekends? Do they have a family? What sort of car would they drive? What media do they consume? What TV shows do they watch? What kind of social media do they use? You get the idea. I want you to describe a real person in a way that you can actually make this even more realistic is to grab a magazine or do a Google search and find a picture of someone who looks how you imagine your ideal customer to. You want to bring them to life as if they were a real person, and that can be a really handy little tip for you to be able to do that once you've pulled together that description.

Lily Richmond: 14:09

Okay, so you are done. You've defined your ideal customer, as well as your target market and your segments. So now you know exactly who you're going to target with your product, which you've already designed, which is totally irresistible to that audience. Now you might remember, in the last episode, episode six, I said you might need to go back to your product or service and refine it once you've identified your ideal customer. So I do highly recommend that you dust off your outputs from last week's workbook and just sense check it. Has anything come out of today's episode where you've defined your target market and ideal customer that changes what you came up with as your product? Are there some tweaks you need to make? So this ensures that what you plan to sell resonates with your ideal customer and that your ideal customer resonates with what you're planning to sell. And another reminder if you haven't listened to part one, head over to episode six, I'll put a link in the show notes as well, and there's a workbook for that episode as well, if you haven't managed to do that yet. So that's it. You now have an irresistible product and a really defined target market. You are well on your way to getting your marketing sorted when you're just starting out.

Lily Richmond: 15:26

Hey, thank you for being part of the huddle today. I really hope you enjoyed the episode and got some value out of it. I appreciate, yet again, it was another meaty topic. Now don't forget to hit the subscribe button, because next time, in part three of the series on where to start with your marketing when just starting out, we're going to come up with how you make your customers life better, and we're going to do that in one sentence. So we're going to put everything together that you've done in part one and part two. So make sure you download those workbooks and complete the tasks that I've shared.

Lily Richmond: 16:04

This is going to be a great episode to give you a really single minded focus and the clarity you need to market your business effectively. And, as a quick reminder, visit the episode description to get access to today's workbook to help you define your target market segments and your ideal customer profile. Or you can head over to my website and grab the download there. https://marketingondemand. co/startup2 and that's number two. Thanks for listening and I will catch you at the next episode of the Small Business Marketing Huddle. Now for the legal jargon. This podcast is for information and education purposes only. We make no business performance claims or guarantees in the information shared. The podcast content is general in nature and does not constitute advice for your unique business situation.