Identifying and understanding your target audience

Every new or changing organization has faced this situation: after investing a significant amount of time and money, you have an amazing service or product in front of you. However, people now need to find out about it, and you may not be sure what to do in order to be most efficient with your marketing dollars.

While your instinct may be to reach for mass advertising in order to connect with the largest swath of people, the best way to maximize your marketing ROI is actually to devote more time, thought and resources to identifying and understanding your true target audience. By avoiding mass marketing efforts and choosing a more discerning approach, you will see higher rates of return. Avoid the common pitfall of assuming you know everything about your customers — do your research, collect data, and properly analyze it.

A. Be increasingly specific

In order to be laser-focused on your target audience, you first need to understand what to prioritize. You will want to do the following:

Gather the basic demographic information

Who is most likely to use your service or product? Answer this question with the basics — gender, ethnicity, geographic location, business sector, age, job title, salary range, marital status, and buying power.

Filter the information

After you have the basic information associated with your target audience, harness the data in a way that allows you to immediately narrow who you are targeting. Think of this as applying multiple filters, one after another, to create a crystal-clear picture of your target audience. As an example, your first filter might be business owners. Your next filter might be business size, and your third might be annual revenue. If you are a consulting firm that specializes in back-office functions, a Fortune 100 client is very different from the entrepreneur who has just received venture capital.

Using filters one by one eventually creates a detailed description of your target audience — the people or organizations who present the best opportunity to be interested in and willing to buy your product or service.

Other filters you might want to consider are customer interests, or how customers choose to spend their free time and disposable income.

Match your value propositions to your target audience

What values are supported by your service or product? Say your company specializes in holistic healing retreats in exotic locations. Who would value these retreats? Perhaps frequent travelers. Or say you're a locally owned business that creates and distributes high-end spirits such as whiskey, bourbon and vodka. Your target audience might be local spirits connoisseurs, and restaurants and bars that specialize in high-end cocktails.

When it comes to identifying and understanding your target audience, dig deep to understand their issues, concerns and values. Then assign different values to your target audience. Some questions to ask yourself:

What is the key value my customers have in mind when they're looking to buy my service or product? Are they looking for ease, reliability, revenue generation?
What benefit am I offering customers?
How does my target audience consume information — mobile, digital, television, radio, music, film, print? What are their top sources of information?

B. Gather data and find commonalities

Identifying your target audience also involves decisions you make with data gathered from various sources. As you gather data, make sure to do the following:

Identify potential markets

It's important to identify target demographic groups. Whether you do this yourself or hire a marketing firm, collect demographic data through various means — surveys, email, newsletters and so on — and correlate responses to your service or product with specific demographic groups.

Dive into existing data as deeply as possible

It's likely that your service or product has competition, so study your competition as much as possible. Who is buying from your competitors? What demographics do these buyers fit? When are they buying? Which benefits seem most popular? You can find a large amount of this data online.

Ask your colleagues, friends and family

Observe what services and products your colleagues, friends and family members use and buy. Don't hesitate to ask them directly whether they'd need or use your service or product. Their answers can contain important insights.

Be as diverse as possible when soliciting comments and insights for your marketing efforts. Diversity in perspective makes it easier to connect with your customers — and to maximize your ROI.