Defining your target market is the best first step to take if you are looking to open a new business or if you want to build up an existing business. Yet entrepreneurs and small business owners often short circuit this key step, jumping right into a business they are passionate about. It's great to be passionate about your business, but if you want to make money you also need to know that others are passionate about what you love, too. And the best way to do that is with target market research.
Here are three mistakes I often see entrepreneurs and solo professionals make that hurts their financial success.
- Not understanding what a target market is. Here are a few definitions to help you.
- A specific group of customers that you want to capture.
- A group of people who share a common interest in a particular subject or activity.
Target markets can be defined very broadly, and this is a mistake that almost all new business owners make. If I hear someone say “women are my target market” I know that person doesn't understand the concept of defining a target market for their business. Which brings me to the second mistake.
2. Confusing the term “target market” with “niche marketing.” A niche is a subset of a target market. Let's keep using the example above. “Women” is a bad market – the only thing all women share in common is their gender. To make your business more manageable and your marketing effective, you have to create a smaller target market and then find your niche within that target market. So, if you are, for example, a wedding planner then your target market might be “women who are getting married.” I would encourage you to narrow that down, too, but that's topic for another day. Instead, let's look at the possible niches within “women who are getting married.” You might specialize in “women who are getting married and want a destination wedding.” Or, you might specialize in “women who are getting married who are looking for a diamond tiara.” Or, you might want to work with “women who are getting married in a garden setting.” In other words, your niche is a subset of the broader target market. I'm certainly not the first to say “the riches are in the niches” – the more you can specialize and niche your business, the better off you'll be financially. And that leads me to the third mistake.
3. Not knowing the special language your niche market uses. Let's say that you want to sell supplies to women who like to make scrapbooks. To market to these women in a way that they will know, like, and trust you (and thus buy from you) you will need to know the scrapbooker's language, their specialized terms. So if you don't know what LO, embellies, Cricut, or bling means you have some homework to do before you go further. Here are some ways to find out about the special language your niche of the target market uses.
- Check out on-line forums on the topic
- Read bloggers who write about it
- Immerse yourself in the topic.
Think carefully about who you want to serve, find a niche to specialize in, and learn their special language. You will avoid three costly mistakes, make more money, and show that you understand target marketing.
So impactful, Sue! I’ve struggled with this for a while … and plan to really laser-focus on this during our retreat this week. I do believe that the more narrow the target, the richer the rewards.
Thanks for the wisdom!
Sue – this is so well explained and such critical information for all entrepreneurs, beginner and experienced alike. I’m going to share this! Thank you for the great info!
Jessica
Sue,
Great explanation of target market and niche. I can understand how people can get these confused. Thanks for providing the clarity.
Dr. Robert Fenell
Sue I’m finally clear on the difference between a ‘target market’ and a ‘niche’. Wow, so simple! I’m off to learn the language of my niche! Thanks
Lynn
“niche language” is VIP, Lynn!
Sue,
Love the article, love the explanations and as always you touched all the key things we should be doing to market to our niche market.
Great distinction between the two. I am implementing this tip today!
Thanks,
I’m so glad it’s helpful for you, Linda.
Sue,
Great clarity on niche and target. Excellent example to those that need to define who and what they are focusing on. Thanks Sue!
Kiyla Fenell
http://www.ultimatestaffingsystem.com
Excellent reminder Sue. I enjoyed reading your explanation between “target market” with “niche marketing.” Very helpful. Thank you, I appreciate all you do to help me with my marketing. Sharing with my fans and peeps.
You’re very welcome, Debbie. And thanks for sharing the article around, too!
This really clarifies things for me Sue.
Thanks!
Good!!! 🙂
Another great article, Sue! I really liked how you differentiated “target market” with “niche” — it’s an important distinction! 🙂
Thanks, Carmen.
Hi Sue,
Excellent article. I truly appreciate it. Thanks.
Mujiba
Such great a post, Sue. This is a must read for new and seasoned entrepreneurs….thank you!
Sue,
Good explanation of the difference between a niche and target market. I like your point about their special language. Nice tip.
Thank you,
Linda
Hi Sue,
I have to say I never really thought about the distinction between a target market and my niche. Great job of articulating that.
Julie
I have struggled with this question for years! I think that what made the difference for me in narrowing my target market was when I asked myself the question, “Who needs what I have to offer and know they need it?” This blew open my understanding of my target market.
Now, about niches. I thought that niche was what you offer that target market. For example, my target market are yoga students. The niche, as I understood it, is my providing services and resources on the yoga of relationship. I think that this is a subset of the yoga student market in that these folks value harmonious and peaceable relationships, though they are surely not the only ones. However, I do speak their language.
Hi Melanie,
Niche is commonly used to refer to the specific slice of a target market you want to reach. What you offer is your product (or service) line.
Sue
As always, Sue, you make marketing information understandable and manageable for me. This information is very timely for me, as I am getting ready to focus on a new program I’m offering. Thanks for the reminder and great information!
Wow! So good for me to hear. I’ve always had the “passionate” thing down, but really have a hard time narrowing my market. Thanks, Sue! Whitney
I always cringe when I hear people say that “everyone” is their target market. How is that possible? Really? What could you say to “everyone” to about your business? How would you get “everyone” to want what you have? Great post. I will be referring to it often.
Thanks, Kristina.
A friend once challenged me to prove him wrong on the adage: The more narrow the focus, the broader the impact. So, I took the challenge … and proved him correct!