How to Define Your Target Market
Every business has an ideal customer. That’s why knowing how to identify your target market is the best marketing strategy for bringing in your dream client. What can you do to help them? How can you provide added value to their business? It’s impossible to answer these questions without knowing who your target market is. As an accountant, customer segmentation is the best way to develop your business. By understanding who your target audience is, you can make and save money in all areas of your business, from saving money on targeted marketing materials to being able to charge more for your goods and services.
As outlined by a 2019 Forbes article on how to reach your target audience, your business is not your target audience. Many firms fall short in assuming they appeal to their target demographic without doing basic research to confirm if this is true. Equally, your current market may be composed of a completely different customer to those you are aiming to attract. Through learning how to reach your target market, you will find that you can gather accurate data on who your customer currently is, who you want to work with, what they need from you, and how you can add value to their business.
“Understand why you are different and how you help, recognize your target market and give them something they might not even realize they are missing.”
What is a Target Market?
A target market is a specific portion of the whole market that you have segmented, intending to deliver a targeted marketing strategy to them. As an accountant, creating a target market will help you to understand what services your customers require. Are they a small business looking for initial start-up accountancy services or a larger firm requiring consultancy advice? If you create a general marketing message, there’s no way that the same message will appeal to both SMEs and larger companies. A 2019 Commerce Signals study reveals that marketers believe that almost 30% of their budget is wasted each year. A high percentage of this is through spending time on marketing that doesn’t appeal to their target audience. By personalizing your message, you can save money by targeting the customers who will respond positively to your campaign.
By segmenting your market, you can take an in-depth look at the customers in this target section, understand who they are, what problems they face, and how you can help them. You can create a ‘customer persona’ and build up a picture of your ideal customer.
Key questions to ask before setting up a customer persona will include:
- Who are they and what do they do for a living?
Is your customer persona ‘Joe the carpenter’ or ‘Dora the HR Manager?’ What is their actual job title? Do they run their own business, or are they part of a larger organisation? How many people work in their organisation?
- What is their background?
How old are they? What gender are they? How much do they earn? What did they study, and at what level? Do they have a family?
- What are their personal and company goals?
Are their company and personal goals entirely their own as the company owner? Or are you targeting an individual that fits into a broader company structure? What are their core values? What are their company’s core values?
Creating your ‘customer persona’ and understanding who your ideal customer is will enhance every part of your ideal customer’s experience. You’ll gain a vital insight into who they are, what their behaviour patterns and goals are, and how you can help them. Econsultancy and Adobe’s annual Digital Trends report highlighted that customer experience came out as the best chance for company growth. 1 in 5 B2B businesses cited it as the most exciting business opportunity, while companies that focused on the customer experience saw a doubling of their revenue within three years.
Considering your target market is a vital part of your customer experience. Think about a brand new start-up looking for an accountant to provide critical insight into the correct business model to use. Would they appreciate you trying to advertise your payroll services before they’ve even opened up their business account? Customer experience is what ultimately translates into customer lifetime value; the total projected earnings you can realistically gain from one customer over the working relationship.
Why Create a Target Market
Creating a target market will help you across all areas of your business. You’ll be able to sell the right products to the right people, save money, and make more money in return. In this section, we’ll be focusing on charging higher rates, speaking directly to your audience, and taking out the competition by creating a target market.
Others in the shortlist of benefits for creating a target market include:
- Gaining a deeper understanding of your customer’s goals and ambitions
- Appearing more informed when pitching to your customers and evaluating prospects
- Saving money on wasted marketing by avoiding general, non-targeted marketing
- Enhancing the customer experience and creating brand loyalty
- Growing the company reputation and credibility by being a useful resource for your target market
2018 statistics show that over 30% of small businesses consider their accountants their trusted advisors. 7 in 10 small business accountants also saw their roles becoming increasingly more strategic. Accountants that focus on a specific market segment (in this case, small businesses) will understand that market and naturally be able to offer them better strategic solutions to their problems. If you’re focused on providing business structure advice to small businesses, you’ll become known as the go-to for this need. This is known as a horizontal segment. A horizontal segment allows you to charge more for your particular specialism.
Another option is to choose a vertical segment, where you target a specific customer type or industry for your services. An example of this would be specialising in a specific accounting sector, like agricultural accounting. You’ll become an expert in this specialism and all the individual quirks of the industry, from hedging transactions to rules for valuing inventory. Through having an insight into the system of that particular niche, you’ll be able to help your clients save money on taxes faster than anyone else in the industry.
You don’t have to choose between a vertical and horizontal segment – choosing both will help you hone down the target customer and means you can charge more for your specialism.
Speak Directly To Your Audience
The internet has been both a blessing and a curse for marketers. It has never been easier to market through your website, your social media, and search engines, making marketing accessible to even the newest business rather than those solely with the big budgets. Conversely, you’re now trying to reach a customer in what is an increasingly saturated market. Every business is shouting louder than the next in a very crowded room, and it’s increasingly hard to make your voice heard.
Identifying your target market helps you cut through the noise and better reach your target audience. Think of it from an Accountant’s perspective – would you be attracted to a generic digital marketing agency or one with examples of marketing for accountancy firms? For your clients, creating targeted marketing that appeals directly to their needs will reach them far better than the ‘one size fits all’ campaign that gets lost in the mass of similar messages.
Eliminate The Competition
By truly understanding your target market, you can continuously provide increasingly tailored goods and services that will become very difficult for your competitors to replicate. Become a big fish in a small competitor pool by successfully offering clients services that help them resolve their business obstacles. Hubspot offers excellent advice on how to conduct a customer need analysis and review a product launch checklist to truly align your goods and services with your target market. As accounting is already a saturated market, really delving into what will differentiate you from your competitors will ultimately help you eliminate the competition.
How to Create a Target Market
Once you know your ideal customer, it’s time to create a target market of your own. From Google Analytics to Facebook Insights, there are many resources to allow you to examine your existing client base, your ideal customer, and identify potential gaps in the market.
Examine Your Existing Client Base
Asking your existing client base about themselves (if you have one) is the perfect way to develop a target market. It also has the bonus of helping you foster good relationships with your customers by showing an interest in them. Focusing on asking what your customers need, and why, will eventually help you provide better customer experience and leverage key information about what problems they face daily. Creating customer satisfaction surveys are an essential way to find out how your customers are interacting with your products and services.
Using Google Analytics and Facebook Insights also helps you evaluate your current clients and find out how they’re interacting with your site. See how customers engage with your social media, what they like, and what they visit on your website. Social listening is also useful as it allows you to follow specific conversations and threads to gain an insight into what your customers find valuable. Use a tool like SproutSocial or SocialBakers to make the most of social listening.
Look For Gaps In The Market
Being the first to identify a target market naturally means you will be the one who understands it best. If you’re a new firm trying to differentiate yourself from the competition, or simply looking for an opportunity to rebrand, looking for new business avenues is the perfect way to stand out. One good source of information is by looking at yours and competitor’s reviews and seeing what the most frequent complaints are. Who are these people, and what do they appear to need? What is missing? One example of finding a niche is the accountancy software company Karbon, who discovered a lack of professional education opportunities in accounting. They set up their own Academy, opening up to a target market of young professionals looking to develop their knowledge further.
Choose Who You Want To Work With
When you’re evaluating your existing clients or looking for gaps in the market, make sure you want to work with them. The biggest bonus of identifying ideal clients is that you are choosing someone who would be your dream people to work with. Look at the customers you like the most and approach them for your targeted surveys if they represent your ideal customer. By approaching customers who align with your business values you’ll have a perfect target market and it will also be easier to target your marketing campaigns. Identifying a target market that already interacts with your products will save you time, money, and help you manage risk as you’re not branching into something entirely new.
Evaluating Your Target Market
There are several ways to evaluate a target market to ensure that your customers will benefit from your products now and into the future. This comprehensive target market study guide provides a detailed overview of how to evaluate your target market. To assess your potential target market quickly, you can ask yourself these critical questions before you consider having them as clients.
- Is this target market large enough to grow my business? The benefits of niche businesses are that they need a specific set of accounting skills, so you will be able to target your goods and services efficiently. However, it’s essential to consider whether the target market is large enough or growing quickly enough for you to make a profit. If the market is likely to remain small, it may not be the right target market (or the only target market) for you.
- How saturated is the target market, and are there large competitors? On the other side, if you’re looking at a broader target market, you may find it challenging to rise above your competitors if you’re looking at a long list of clients that offer the same generic accountancy services. This is why horizontal and vertical segmentation allows you to diversify without making your services too niche.
Does my business match this target market and is this prospect realistic? If you’re a new start-up looking to meet multinational corporations’ accounting needs, you need to evaluate your resources to ensure that you can provide the level of service and staff required. Equally, you need to make sure your goals align with your current market. If your values are to champion the start-up and SME owner, you may find your branding and goals won’t appeal to a large company owner.
“There is only one winning strategy. It is to carefully define the target market and direct a superior offering to that target market.”
Your search for the ideal customer will always return to asking what you, as a business, can offer that customer. Without knowing who your target market is, you risk wasting money on generic marketing that doesn’t convert your spending into customers. Equally, assuming that you naturally appeal to customers without researching them will affect both your existing customer base and your future one. Undertaking market segmentation will ultimately boost your profits, customer base, and business credibility overall.