Planning, launching and marketing a small business is like a reverse funnel. Instead of starting with a large scope and narrowing it down, you start small: what’s your personal vision? What are your goals? What motivates you?
Then, that scope slowly widens. Once you’ve identified your ambition and your motivators, then it’s time to expand your focus outward. First, it’s your company: what’s your mission? What’s your business plan?
Second, you’ll broaden your focus to your market and your competition. What’s the business landscape like? Who are you competing with? And what do you offer that your competition doesn’t?
Now, it’s time to expand your focus even further: your target customers. They’re among the most critical parts of your business, because without customers, your business won’t last.
And just as you’ve so carefully and thoroughly planned your business, including operations and logistics, you’ll want to put similar effort into your small business marketing and messaging. To do that, you’ll need to understand who you’re trying to reach so that you can talk to them in a relevant, meaningful way. Sure, you want to sell them something — but you also want to build a relationship, which will keep them coming back to your business.
Let’s take a closer look at why your target audience is so important. Then, we’ll delve into ways that you can identify and learn more about your customers so that you can more effectively communicate and do business with them.
WHY YOUR TARGET AUDIENCE MATTERS
Here’s one of the most important lessons you’ll learn as a business owner: You can’t be everything to everyone.
Just think about it for a minute. If you had to create a product or service that appealed to everyone, you’d be exhausted! And you’d probably never achieve the full potential of your success.
That’s why it’s so important to identify your target audience. Who are the people who need your product or service? How can your product or service help improve their lives? What challenges will you help them overcome?
In an earlier FastTrac feature, we talked about identifying your entrepreneurial strengths with the caveat that no one is good at everything (and, honestly, they shouldn’t be!) Instead, it’s important to know your strengths, then channel them into your business.
The same goes for your target audience. You don’t need to appeal to everyone, but you do need to understand your customer base. Not only will that knowledge help you develop a more effective product or service, but you’ll also have customer-driven insight that will help guide your small business marketing strategy.
Keep this in mind: marketing, simply put, is delivering the right message to the right person in the right way and at the right time. If you know who that person is, the rest of the strategy is much easier to build.
IDENTIFYING AND LEARNING ABOUT YOUR CUSTOMERS
No matter what industry you’re in, chances are good that your product or service is helping someone solve a problem. Focusing on the pain points that your business alleviates can be an effective way to start identifying and understanding your customers.
Brian Kearns is a great example. He spent 18 months researching the problems that businesses face when hiring part-time employees. Then, when he fully understand those challenges and how he could help solve them, he launched HipHire, an online service that connects businesses with qualified part-time job candidates. As a result, businesses reduce their employee acquisition costs and turnover.
You don’t necessarily need to spend that much time on market research, but Brian’s experience underscores the importance of knowledge. Let’s take a closer look at three ways you can identify and understand your target customers so that you can build a similar knowledge base.
CREATE A PERSONA
You’ll often hear about creating customer personas as you delve more deeply into marketing strategies for small businesses.
Personas, in essence, are characters. They’re a generalized and fictional depiction of your customer. But although they’re fictional, their demographics, behaviors and needs can — and should — be rooted in reality.
Let’s say, for example, you’re starting a pet-sitting business. Your company will be located in the downtown area of a large city because you want to help area residents — most of whom are juggling busy schedules and don’t necessarily have access to a yard — take care of their pets.
Based on your business model, as well as insight you’ve gathered from your competitive analysis, you can create customer personas based on your target market. In the case of the downtown pet-sitting business, you’d have several: a young professional who has little downtime due to a hectic work and social schedule, but can’t imagine life without their beloved dog. Another persona could be an executive who frequently travels and whose pet-sitting needs may fluctuate depending on their schedule, which isn’t always consistent.
As you identify personas, don’t hesitate to indulge your creative side. Craft a short but informative back-story about each persona. Try identifying the following details about each persona:
- Type of pet
- Primary challenge
- Secondary challenge
- How can you help solve these challenges?
Don’t get too wrapped up in creating customer personas. After all, they’ll likely evolve as you better understand your customers and as you refine your business. But if you find yourself stuck on identifying specifics about a particular persona, the next tip can help.
USE PRIMARY MARKET RESEARCH
As you might have deduced from the name, primary market research means you’re getting your information straight from the source. And that’s why this type of research can be especially valuable as you focus on getting to know your target audience.
Common primary market research methods include surveys, interviews and focus groups. When you’re in the early stages of identifying and understanding your customers, focus groups and interviews can be especially helpful. One advantage to focus groups over one-on-one interviews is that you can gather information from several people at the same time, making your research more efficient.
Depending on how important this type of research is to your business planning and strategy, you may want to consider enlisting the help of a market research firm, although services will likely be costly.
If a market research firm isn’t in your budget, try starting with a more informal approach. Using your personas as a guide, gather a group of people and have a conversation about who they are, what they need and how your business can help. This sort of primary market research is beneficial no matter where you are in the audience development spectrum: it will give you the information that will help you expand your customer personas, or will help validate the work you’ve already done.
LISTEN AND LEARN WITH SOCIAL MEDIA
Social media will undoubtedly play an integral role in your marketing strategy, especially when it comes to brand building.
Much of the focus on social media is sharing and engagement, and rightfully so. But social media channels are sometimes overlooked as powerful listening tools. After all, they’re conversation platforms. And if you make a point to pay attention to what other people are saying, you’ll reap a wealth of insight that includes understanding more about your target audience and how you can best help (and connect) with them.
To get started, try setting up a few listening streams in a free social media dashboard like Hootsuite. Pick a few search terms or hashtags that are relevant to your business, industry and customers. Then, you can set up streams for each term or hashtag and simply follow along with the discussion.
Let’s revisit our hypothetical pet sitter. The entrepreneur (we’ll call her Myra) could set up a social stream with the hashtag of her city. That’s a lot of information, but it could help her spot possible customers and problems they could be facing (no nearby dog park, for example). A little research on a platform like Twitter can also help identify other hashtags or terms to watch. In our home city of Kansas City, for example, #dogsofkc is a fairly widely used hashtag and could make for an effective social listening stream.
Other tips are to watch for relevant Twitter chats, which are typically focused on a particular industry or topic. Here’s a helpful overview of current chats.
You might also consider joining a few groups on sites like Facebook or LinkedIn. And channels like Instagram make it easy to track hashtags so that you can follow posts and also identify people to follow.
And if you do decide to jump in the conversation? Effective social media marketing is a whole separate post, but just remember: despite the fact that you’re behind a screen, all social media use is simply talking with other people. Converse with someone online as you would in person — and that means you don’t want to jump straight into a sales pitch. Build a rapport; the time to sell will come later.
HOW TO REACH YOUR CUSTOMERS
Once you understand who your customers are and how you can help them, it’s an ideal time to think about how you can reach your customers.
We already mentioned social media playing a key role in your marketing strategy. And if you set up a few social listening streams, you’ll be ahead of the curve in terms of knowing where your customers spend their time.
For example, you might find that many of your target customers use Facebook, Instagram and Twitter, but they’re not particularly active on LinkedIn or Snapchat. Using that insight, you’ll be able to focus your customer-focused communication — and brand-building — on the channels your customers prefer.
This is also a prime time to revisit your personas. Based on the information you’ve created and compiled, how else can you reach your customers? Would direct mail be a worthwhile experiment? What about a booth or table at an upcoming conference or festival? Would your customers be interested in a blog? An email newsletter? Traditional advertising in print or broadcast?
As you launch and grow your business, you’ll definitely discover some of these answers through trial and error. Just know that you don’t need to try reaching all of your customers at once. Focus on a few channels and grow that audience. Then, you can broaden your marketing focus to encompass a different type of content or delivery.
The most important point is to understand the value of using data and insights to inform decisions. You’ll be experimenting and testing as you go, but you also don’t want to build your customer base (and your business) by taking wild guesses and seeing how they pay off. They say knowledge is power, and that’s especially true for entrepreneurs.
Remember the funnel analogy from the beginning of the post? If you feel yourself getting overwhelmed as you continue to expand the scope and focus of your entrepreneurial journey, take a deep breath. Then, consider registering for Kauffman FastTrac.
These free, online courses are specifically designed for entrepreneurs, both aspiring and established. They’ll walk you through key tasks like finding your target marketing, discovering your competitive advantage and defining both your brand and marketing.
If you find you’re stuck on a particular part of your small business planning or launch, Kauffman FastTrac can help you move forward. Or, if you’ve already done research and have tools like customer personas in place, FastTrac can help you validate the work you’ve done so far and affirm you’re on the right path. That’s the beauty of FastTrac — wherever you are with your business and whatever help you need, you’ll have access to the resources you need anytime you need them.
After all, we said earlier that marketing is delivering the right message to the right person at the right time and in the right way. In the case of FastTrac, you’re our target customer. And we want to work with you to solve your problems and bring your small business idea to fruition. How can we help?