How to choose a TARGET MARKET

When planning a business project, you'll hear many people say - FIRST pick your target market!

But WHO should you pick as your target market?

Rule ONE: They should have money they can spend!

While a business CAN help people and improve society, to survive you gotta have sales, and to make sales you need a target market with "disposable" cash.

It's simple mathematics - they can't pay you if they don't have the money to do it with. So without a doubt, rule number ONE is choose a target market with disposable cash.

Unless you get PAID, your business project has no hope of survival. (That's the difference between a "hobby" and a "business".)

It's good to help the "down and out" if you want, but you have to be sure that you are targeting those with money to pay for it somehow.

To take an example, let's say you want to help the homeless through your business. You're not going to succeed by trying to sell the homeless expensive "biz-opps" - they can't afford it.

A better way might be to help organize those in need to provide a service (such as a gardening or lawn-mowing service), so that all of you get a cut of the profits. That way, you are still helping the needy, but it is those with disposable cash (who buy your services) who are paying for it.

It is a REAL business, one where you still help others and which could also have a real chance of success. That's just an example of how you can apply this principle to help others, THROUGH a business.

Sandy wrote a post here a few months ago about a furniture moving business that employed ex-convicts - to help them "find their feet" again in society. That's another business like this....

You have to remember that, whatever the business, your target market MUST have some disposable cash. It doesn't mean you can't still help those who are "down and out" - but just that to do so you'll have to be a little more creative....

A SECOND rule is.... It usually helps to pick a market you understand.

Either you have dealt with that the kind of people who form that market extensively before, or....

YOU are just like the kind of customers you are targeting.

What that means is, if you are a woman who loves gardening, what product or service could you offer to people just like you, who also love gardening? These kinds of products are easy to think up, since you just have to think what kind of product or service YOU would like to have yourself.

We all have thoughts like, "There should be a ___________" or "Someone ought to make a ___________".

STOP

and write it down! Those are possible business ideas!

If you really understand your market, it makes your work much easier and you are more likely to succeed, since you are more likely then to provide a product or service that people really want or need.

Why make things more difficult for yourself than things need to be?

And anyhow, dealing with people who are just like YOU are can be fun. :)

THIRD - is your market big enough to sustain you? It doesn't have to be very big, but you want to be sure it is big ENOUGH.

Now, because of the global reach of the internet, markets which were "too small" before are big enough NOW to create a successful niche business.

The internet is like "manna from heaven" if you want to create a niche business!

Well, there's a few thoughts on choosing a TARGET MARKET.... Any more?

- Dien Rice

Hi Dien!

My suggestion would be, that if you happened to do it "bass-ackward" (as Don Alm said to me) by creating your product first and THEN trying to target it to the proper niche, and that doesn't work out the way you hoped (as has happened to me with my "Makeup Tips for Teens" ebook) that you try a little "target practise" before scrapping the idea.

Gordon had me thinking "so what" about my product, and seriously considering whether I should go with it or just walk away from it. I've decided instead to hold on and try to research exactly who needs my product. I now put out a newsletter to a growing list of subscribers. I invite my subscribers to ask questions related to beauty and make-up, and guess what? It's the 40-something crowd that has all the questions!!! BINGO!!!

So in response I have widened my target audience so that the website welcomes women of all ages, with a little something special - section called "Your Changing Face" for aging baby-boomers. (That's in the works and coming soon).

Something else I'm also considering is doing "makeovers by mail". This is in response to some questions I've received re makeup colors & application that really can't be adequately described by text. If the person asking sent or emailed me a picture with a money order I could recommend what she needs, and send samples.

Anyway, I'm rambling - but I hope I've inspired others to dig a little deeper and explore all options before abandoning their product that may just be targeted in the wrong direction.

Anya :)

p.s. Happy Valentine's Day!

> When planning a business project, you'll
> hear many people say - FIRST pick your
> target market!

> But WHO should you pick as your target
> market?

> Rule ONE: They should have money they can
> spend!

> While a business CAN help people and improve
> society, to survive you gotta have sales,
> and to make sales you need a target market
> with "disposable" cash.

> It's simple mathematics - they can't pay you
> if they don't have the money to do it with.
> So without a doubt, rule number ONE is
> choose a target market with disposable cash.

> Unless you get PAID, your business project
> has no hope of survival. (That's the
> difference between a "hobby" and a
> "business".)

> It's good to help the "down and
> out" if you want, but you have to be
> sure that you are targeting those with money
> to pay for it somehow.

> To take an example, let's say you want to
> help the homeless through your business.
> You're not going to succeed by trying to
> sell the homeless expensive
> "biz-opps" - they can't afford it.

> A better way might be to help organize those
> in need to provide a service (such as a
> gardening or lawn-mowing service), so that
> all of you get a cut of the profits. That
> way, you are still helping the needy, but it
> is those with disposable cash (who buy your
> services) who are paying for it.

> It is a REAL business, one where you still
> help others and which could also have a real
> chance of success. That's just an example of
> how you can apply this principle to help
> others, THROUGH a business.

> Sandy wrote a post here a few months ago
> about a furniture moving business that
> employed ex-convicts - to help them
> "find their feet" again in
> society. That's another business like
> this....

> You have to remember that, whatever the
> business, your target market MUST have some
> disposable cash. It doesn't mean you can't
> still help those who are "down and
> out" - but just that to do so you'll
> have to be a little more creative....

> A SECOND rule is.... It usually helps to
> pick a market you understand.

> Either you have dealt with that the kind of
> people who form that market extensively
> before, or....

> YOU are just like the kind of customers you
> are targeting.

> What that means is, if you are a woman who
> loves gardening, what product or service
> could you offer to people just like you, who
> also love gardening? These kinds of products
> are easy to think up, since you just have to
> think what kind of product or service YOU
> would like to have yourself.

> We all have thoughts like, "There
> should be a ___________" or
> "Someone ought to make a
> ___________".

> STOP and write it down! Those are possible
> business ideas!

> If you really understand your market, it
> makes your work much easier and you are more
> likely to succeed, since you are more likely
> then to provide a product or service that
> people really want or need.

> Why make things more difficult for yourself
> than things need to be?

> And anyhow, dealing with people who are just
> like YOU are can be fun. :)

> THIRD - is your market big enough to sustain
> you? It doesn't have to be very big, but you
> want to be sure it is big ENOUGH.

> Now, because of the global reach of the
> internet, markets which were "too
> small" before are big enough NOW to
> create a successful niche business.

> The internet is like "manna from
> heaven" if you want to create a niche
> business!

> Well, there's a few thoughts on choosing a
> TARGET MARKET.... Any more?

> - Dien Rice




Beauty Talk

Hi Dien, and Anya,

Your postings are helpful. My experience with finding my own target market is an interactive process. That is I found out I have to constantly listen to the market and adjust my product and service. My company provides email tools for viral marketing and CRM. It is specially true to these types of cutting edge businesses, where you don't have a proven formula to follow.

I try to make it easy for people to feedback and interact with me in every communication channel to my potential customers. Thanks to Internet, the almost real-time interaction helps me refine my target market constantly. We set out to do viral marketing more than four years ago when the term "viral marketing" was not even heard of. We did lots of experiments with different types of viral marketing mechanisms, including highly sophisticated e-Card systems, thinking evrey Webmaster is our potential client. But the truth is many of them are not willing to pay for tools or services, so we end up with lots of users but many of them are not paying. Now we integrate the viral marketing components in our email CRM tool. This enhances the product that people are willing to pay for, and also gives our product one more competitive advantage.

So, I think the target market is a moving target. It is especially true to the fast changing online industry.


CAARS for viral permission marketing