Michael Kors, one of Fast Company’s 50 Most Innovative Companies, creates fashion that earns approval from influencers like Anna Wintour. Kors posted revenue gains of 39 percent last year, adding to its $15.5 billion fashion empire. Today, Michael Kors has the second-largest market share of any clothing company in the world. Twenty years ago, however, Kors was reeling after the company filed for Chapter 11 bankruptcy.
Kors had launched with a Collection line that aimed for the luxury consumer. After restructuring, the company launched its MICHAEL line, priced between $200 and $400, in pursuit of “affordable luxury.” The MICHAEL line grew exponentially and generated stable sales throughout the economic recession. Like many businesses, Michael Kors stopped stumbling when it found its target audience.
Step 1: Understand Your Selling Points
Every invention fulfills a need, and your product is no different. Unfortunately, many inexperienced businesses fail to grasp the purposes behind their products. They struggle to articulate which problems their products solve and why people would want to buy them.
- Describe what your product does and what problem it solves. Try to sum it up in two or three short sentences.
- List each feature of your product. Brainstorm different benefits that each feature could provide. Then, list how those benefits could solve problems in people’s lives.
- Ask yourself which people experience those problems. Identifying these people gives you the first peek into your target audience.
Step 2: Analyze Your Existing Audience
The customers who currently buy products from you are your existing audience. Understanding their characteristics and their buying patterns can reveal a lot about your business. Analyze what elements of your product and your marketing strategy have connected with your existing audience. Then, decide whether you want to milk more sales from existing customers or whether you want to reach a new target audience.
- Invest in customer relationship management (CRM) software. Businesses of all sizes can afford CRM software. Programs like Zoho or Insightly provide good features for small business. Larger companies can choose Salesforce.com or other major CRM platforms.
- Identify customer demographics and buying patterns. Analytical tools from CRM software help you to see your existing customers’ geographic distributions, age ranges, purchasing habits and other insights.
- Recall past successes. List promotions or campaigns that have worked for your company in the past. Specifically, focus on the audiences that responded to the campaigns and how the campaigns influenced buying behavior.
Step 3: Dig a Little Deeper
Every demographic, when you dig deeper, reveals multiple layers of variety. For example, if your product is targeted toward mothers with young children, these mothers will have a wide range of characteristics. Some may be young mothers while others have waited until they were older to have children. A target audience of “mothers with young children” may not be specific enough. You need to think more critically about which members of a group would use your product.
- Find out all that you can about people who use products like yours. Look at magazines, websites or bloggers that report on your industry. Also, look for specialty sources that report on certain business types, such as retail or manufacturing.
- Set aside resources for primary research. You can partner with a marketing firm, or, if you have the resources, conduct in-house research. Social networks can provide great opportunities for interacting with customers at very little cost to your company.
Step 4: Challenge Your Assumptions
Greg Hasbritt, the founder of SimpleWealth.com, says that one of the worst things businesses do is to assume that they understand their customers. In an interview with Entrepreneur, Hasbritt cites the example of a fitness buff who starts a business dedicated to personal health. Because people define “health” in many different ways, the fitness buff, operating on her assumed definition of health, may fail to connect with customers.
- Compare your selling point evaluation and your consumer research. Ask yourself what differences you see between your responses to Step 1 and the research you conducted in Step 2.
- Identify differences between what your primary research indicated and your initial assumptions about your target audience. You may have assumed that your customers would use your product for a specific reason. However, your surveys or interview may have uncovered a different consumer motivation.
- Listen to your customers. If your customers say they want something, and it conflicts with your original ideas, go with what your customers are saying instead of sticking to a faulty assumption.
Step 5: Scope Out the Competition
If you’re lucky, you’ve invented a product that the world has never seen. However, if you’re like most people, you’ve created a better version of an existing idea. It’s important to check out the companies that sell products similar to yours. Their strategies can provide added insights into the audience you’re trying to reach.
- Identify your competitors. Look not only at established companies but also at up-and-comers.
- Discover their audience. Most likely, you’ll want to target an audience that their company has missed. Alternatively, if you want to lure away their current customers, start thinking of how you’d persuade those customers to switch to your product.
- Observe their successes. You can’t always duplicate others’ successes, but you can observe what’s worked for them as they’ve connected to their audiences.
- Note their failures. Let your competitors make mistakes so you don’t have to. Avoid repeating the failures that your competitors have made.
- Articulate what makes your company different. Investigate ways that your competitors aren’t meeting their customers’ needs, and write down how your company can do things differently.
Step 6: Create an Audience Profile
Good customer profiles contain both demographic and psychographic information. Demographic information describes characteristics like income, gender, age, marital status, job status, ethnic background and education levels. Psychographic information identifies potential motivators for your customers. These motivators may include hobbies, behaviors, lifestyle choices, values, interests and spending patterns.
- Create a clear, concise profile of your target audience. You may identify multiple target audiences, and you can create profiles for each, but it’s a good idea to market to only one target audience at a time.
- Give equal weight to both demographic and psychographic data. Demographic information tells you the type of person that might buy your product. Psychographic information provides insight into why they buy your product.
Step 7: Go Find Your People
To connect with your target audience, you need to know where to find them. You also need to know how they prefer to communicate. At the same time, remember Steve Jobs, who famously said, “A lot of times, people don’t know what they want until you show it to them.” In addition to uncovering their existing preferences, you may need to show them new ways to connect.
- Analyze how your customers are already finding you. If you’ve had success with email campaigns, then leverage those connections. Also, capitalize on existing social media successes.
- Choose the right social media outlets for your products. If you sell a visually enticing product, like Michael Kors does, you might have great success with Instagram, Pinterest or Tumblr. Even if your target audience isn’t using those platforms yet, your innovative campaigns might persuade them to start.
Step 8: Run Small Test Campaigns and Evaluate Them
Your first attempt to connect with your target audience may fail, but an initial failure doesn’t mean that you’ve identified the wrong audience. Customer relationships are not that different from real-life relationships, so try multiple strategies to get your point across.
- Test, test and test again. You can test everything from email campaigns to social network campaigns to landing page designs to see which works best. Try multiple small campaigns at once within one target audience niche, taking note of which campaigns work and which ones fizzle.
- Be sociable on social media. So many businesses blast automated social posts, but they miss the interaction piece that could truly distinguish them from their competitors. Consider setting up dedicated accounts, like a dedicated Twitter customer service account. Then, respond quickly to customer tweets when you receive them.
Step 9: Evolve With Your Eye on the Future
Business changes more quickly than ever thanks to the rapid availability of new technology. As a result, your campaigns may have shorter lifespans than they did a few years ago. Avoid delivering erratic and scattered messages because you’re in a hurry, but also avoid staying too long with an idea just because it worked in the past.
- Revisit your customer profiles periodically. Conduct at least an annual review of your target audience profile, making updates to your demographic and psychographic data.
- Envision your product and your company five years in the future. Both your business and your customers need to travel in the same direction. Stay abreast of technology related not only to your product but also to ways you communicate with your target audience.
As your business evolves with technology, expect your customer base to evolve and shift, too. Fortunately, when you’ve found your target audience, your company can make the changes right along with them.
Need help finding your target audience?
If you’re still unsure how to narrow down your target audience, Digital Current can help! With over a decade of experience developing integrated online marketing campaigns, we know a thing or two about reaching the right audiences with the right message.