Why Target Markets Are Essential

When working with new businesses, I often ask them who their target customer is. If they answer that
they are targeting everyone—that anyone could buy their product, I think they are likely to experience
very difficult times if not business failure in the next year or two.

You may be thinking you would do the same thing. New business need as many customers as possible so
they can survive so why would you limit who you can sell to. If you choose a target market or a target
customer won’t you be just limiting who could buy your product which would lead to less sales? Most
new business owners seem to feel the same way.

Let me show you why the “keeping your options open” by not choosing a target market approach will
likely lead to drastically less sales.

Choosy Customers

In our society today, any given person has so many options for anything they could possible want to buy
that they can afford to be very choosy. They can find the faster, coolest, cheapest, products every. They,
are very good at getting what they want most. Each person decides what product will meet their specific
needs best, and they buy it. They don’t have to settle for mediocre products. Of course, they do have to
worry about cost, but for the price they are willing to pay, they are very good at finding they very best
product.

So where does that leave the products that are third or fourth best in some category at some price?
They are left unbought—on the shelf. The best get bought the mediocre ones don’t sell.

Making Your Product Best

So how do you make sure that your product is best for someone? Well that is were targeting comes in.
Companies who try to please everyone typically cannot be the best for anyone. Think about it. Do you
have the same taste in clothing as your parent? Your grandparents? Does everyone you age have the
same dream car? Do some prefer speed? Others off-road capabilities? Others number of car seat that if
will fit?

Promoting Your Product

This is where the counter intuitive concept comes in. You have to focus on the wants of some group of
people to be able to be best at something they value. When you do that effectively, they will buy your
product—that is--they will buy your product if they know it exists. They will only know it exist if they pay
attention to the messages you send to them. They will only pay attention to the messages (ads, coupons,
etc.) if the message interests them.

Sending them a message about your product typically cost money and/or time. Usually you have to
create an ad, a Facebook post, a flyer or something like that to tell people about your product.
Companies that create ads that don’t appeal to people, find that they are spending more money on the
ads then they are making from the ads. People ignore the ad or they don’t feel that the product will
would be best for them. How long can a company stay in business when it is spending more money on
its ads then it making from them? Not long. A kind of death spirals begins. Now do you see why so many
new businesses fail?
Convinced yet?

Some of you might be saying our product will be so good that we won’t have to pay for ads. We can will
rely on “word of mouth.” Somewhere your heard the sage marketing advice that says “if you build it
they will come.” That does work sometimes, but very rarely. In fact, when I hear companies say this, it
comes across to me like this: “we are so lame at marketing that we are going to just hope our business
will do well rather than proactively working to ensure it success.” The most successful companies work
hard to ensure that they products are most appealing to some group of people and that these people
find out about those products. They do this by choosing a target market that they can focus on.

In conclusion, choosing a target market helps a company focus their product development on the needs
of a group of people, and it helps them be more cost effective at promoting their product to them. Both
of these are vital for the company to achieve enough sales to stay in business.