5 Steps to Identify and Define Your Target Market: 2022 Guide

 When you identify your target market, you improve your brand's chance of success. Follow these five steps to define your audience and appeal to them directly.

Marketing a brand-new business can be overwhelming if you're not sure exactly who should get the message. The process of identifying and defining your target market provides enlightening information to guide more effective awareness and conversion campaigns. 

We've prepared this simple 5-step guide to help you zero in on exactly the right group of people for your products and services.

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What Is a Target Market?

The customers you envision using your products or services make up your target market. The more you know about your intended audience, the better you'll be able to anticipate and address their needs. When defining your target market, you'll consider characteristics like age, lifestyle, education level, income, and even personal values.

Depending on your offerings, your brand may target multiple markets. For the purposes of this guide, however, we'll assume you're focused on a single group of potential buyers.

Typically, your target market receives the greatest possible benefit and has the highest level of need for your products or services. They should also be able to afford items at your brand's price point. You may also want to focus on residents of your geographic area, although you can expand your horizons beyond your local audience with an ecommerce operation.

Why Is It Important to Define Your Target Market?

Marketing costs money. If you're trying to cater to everyone, you'll end up with an expensive outreach program that doesn't really speak to your audience. It's easier, more affordable, and more effective to market your business specifically to a small segment of the population.

When you know your target market well, you'll be able to convert them to customers with content that serves their interests and offers solutions for their pain points. You can even fine-tune your products and services and branch into new areas based on market research about audience wants and needs. 

5 Steps to Identify Your Target Market

Follow this simple path to narrow down your target market, whether you're a new business owner or just ready to refresh your approach.

1. Assess Features and Benefits

Carefully review the features and benefits of your offerings to identify the target market. To conduct this type of analysis, list each feature, then add a second column detailing each benefit of those features. 

In the third column, brainstorm about who those benefits actually benefit. Let's look at an example. You're thinking of starting a child care center in your area, with flexible hours as the key feature setting you apart from other local providers. 

This flexibility creates the benefit of earlier drop-offs and later pick-ups, as well as partial-day schedules. In this example, your target market probably consists of parents with work hours outside the 9-to-5 standard. 

2. Learn More About Your Market

Now that you have a general group in mind, it's time to drill down and get more specific. You'll need to find out as much as possible about your target market to effectively attract an audience and convert them to customers.

Once you've successfully found a few buyers, you should survey them to learn more about their perceived relationship with your brand. Their answers can tell you a lot about how to approach other members of your target market. Some questions you can ask include:

  • How did you hear about our business?
  • What are your favorite products and services we offer?
  • What do you like most about our company?
  • What do you think our brand could do better?

You can also use third-party data to find out more about your audience. For example, you can download info about website visitors from programs like Google Analytics. Social media sites also provide this type of demographic information for business accounts.

3. Pay Attention to Competitors

Defining your target market involves a comprehensive look at the customer bases of your closest competitors. You can find out more about who similar businesses market to - and the tactics they use - by examining their social media pages, websites, print publications, marketing campaigns, and other sales tools. 

This analysis provides more information about your audience's behaviors, preferences, challenges, and needs. You'll also learn how the competition successfully attracts members of your target market and see where their efforts fall short. 

4. Start the Segmentation Process

For this step, you'll take the broad group you defined back in step one and "segment" them to create a smaller, more specific target market. You can divide your audience by demographics such as:

  • Ethnicity
  • Gender identity 
  • Age
  • Income level
  • Sexual orientation
  • Geographic location
  • Household size
  • Education level

Next, you may want to pursue psychographic segmentation. This category addresses consumers' psychological characteristics such as:

  • Personal attitudes and values
  • Opinions
  • Religious beliefs
  • Future plans and goals
  • Lifestyle choices
  • Political views

You might also consider factors that fall within behavioral segmentation. Consider what benefits your audience wants from their favorite brands, how loyal they tend to be as customers, when they tend to purchase and how often they buy.

5. Write Your Brand Positioning Statement

Finally, it's time to distill your findings into a single solid statement that defines your target market. You'll want to include at least a few of the characteristics mentioned above to sufficiently narrow the scope of your marketing efforts.

Let's return to our example above – the child care center with flexible hours. Your brand positioning statement could look something like this:

"Timewise Flexible Child Care targets working parents ages 30 to 50. They're employed in areas that don't necessarily have a 9-to-5 schedule, like health care and retail. They live OR work within a 5-mile radius of our location and earn at least $150,000."

In this statement, we cover lifestyle (parents who work odd hours), employment status and possible industries, age, geography and income. These characteristics add specificity to the broad group of working parents we defined back in step one. 

How to Offer the Right Payment Options for Your Target Market 

Different demographics have different payment preferences. While some customers rely on credit cards like Visa and Mastercard, others want modern methods like digital wallets (Google Pay, for example). Considering these checkout preferences can create a higher conversion rate.

Pay.com connects you with your audience's go-to payment methods in no time. When you set up your account, simply select the payment methods you want to offer when customers check out. 

The straightforward Pay.com onboarding process only takes a few minutes, with an intuitive system that's easy to learn for ecommerce beginners and experts alike. Click here to get started now!

The Bottom Line 

When starting or expanding your business, defining a narrow target market informs smarter strategies for advertising your products and services. You'll likely spend less and see greater results from your marketing campaigns when you know exactly who might want to buy your products and why they should care about your brand. 

Once you know your target market inside and out, you're ready to start selling products and services online. All you need is a way to accept credit cards and other payment methods, which is why it's time to connect with Pay.com

We'll give you the flexibility to accept your customers' go-to payment methods. Signup is easy, and we offer a transparent, affordable flat-fee structure that works for new business owners.

FAQs

What is the easiest way for a new business to accept credit card payments?

When you sign up with Pay.com, you can start accepting credit cards quickly and easily. Our intuitive Pay Dashboard provides everything you need to personalize payment for your brand and appeal to your target audience. We strive to offer a flexible approach so you'll have the payment services you need at a price that makes sense.

What's an example of a target market?

A target market uses specific characteristics and demographics to define your desired audience. For example, a brand positioning statement identifying your target market could read: "Our target market includes females ages 18 to 25 who enjoy wearing makeup and have at least $250 in monthly disposable income."

Should I target the same market as my competitors?

While your target market may have some overlap with competitors' customer bases, it also makes sense to look for areas with unmet needs. Your business can potentially fill these gaps and create a new, profitable niche where your brand can stand out. You should regularly review marketing materials from other businesses in your sector to see what works and what doesn't.

Should my business accept alternative payment methods?

In today’s world, it’s a good idea to accept multiple payment methods so you can cater to a wide customer base.

Pay.com provides many different payment methods so you can cater to your customers' needs. In addition to traditional choices like credit and debit cards, you can select options like digital wallet payments with Apple Pay and Google Pay when you set up your online checkout page. You'll be able to personalize based on your market preferences.

Meet the author
Andrea Miller
Andrea Miller has been a writer and editor for more than two decades. Specializing in business and finance, she has written for some of the major websites in the financial sector. Outside of work, she spends most of her time with her family and enjoys hiking, yoga, and reading.
The Best Way to Accept Multiple Payment Methods

With Pay.com, you can accept the payment methods your target audience prefers, whether that’s credit cards, PayPal, mobile wallets, or local payment methods. Setup is easy, even if you don’t have any tech experience.

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