7 tips to help you determine your target audience

Even if you could afford to target everyone, it’s not a good idea. 

Why? Because the success of our digital marketing (and business) happens based on determining our target audience and creating a strategy focused on reaching that group of consumers.

And no small business can afford to target everyone.

The way small businesses can compete is by identifying and targeting a niche market that makes sense for the products and services that are offered.

Even if you’re opting to say that you target “stay-at-home moms” or “homeowners” rather than “anyone interested,” that’s still too general.

But keep in mind that specific targeting is not intended to officially exclude people who don’t fall within your target. Rather, it’s about reaching the right group (who is more likely to buy from you than other groups) with the right message for them at that moment.

About 40.5 percent of consumers say they prefer seeing online ads for products targeted to their interests rather than random ads.

Of course, the importance of a target audience goes beyond marketing and actually plays a key role in your business plan that can be used to secure financing as well, as explained by the U.S. Small Business Administration.

The following are seven tips to help you determine the target audience for your business.

Examine your customer base

It’s important to start by digging deeper into your customer database. Ask yourself:

  • Who are your current customers?
  • Why do your current customers buy from you?
  • Which customers bring in the most business (i.e. are the most loyal)?

Be sure to take note of all common characteristics and interests among your best customers. It’s very likely that similar consumers would also benefit from your products and/or services as you’re looking at getting specific with your target audience.

A customer survey can help supplement some of the more detailed information about your customers. In addition, consider examining your social media following. Most platforms have various tools to better understand your audience, including:

Conduct a competitive analysis

Understanding who your competitors are targeting and who their current customers are can help give you insight into targeting opportunities. 

This is not because you should similar target the same group. You definitely should not.

Instead, understanding who’s being targeted by your competitors can help you find a niche they might be missing (and that you can hone in on).

Dive deeper into what a competitive analysis entails, as well as 16 tools to help you conduct one as efficiently and effectively as possible.

Doing so will help you gain insights into the audiences your competitors are after.

Analyze your products and/or services

Take the time to review everything you offer as a business. You can do this in a structured way by creating a list of features for each product or service you offer.

Then, break this down further by documenting the benefits each feature offers. Once you have a detailed list of benefits, you can brainstorm the people whose needs would be fulfilled by those benefits.

While this may still be too broad of a grouping to officially identify as your target audience, it can definitely get you going in the right direction.

Use social listening for deeper insights

Social listening is an excellent way to discover online conversations about your business, industry and/or products or services.

This tactic involves monitoring relevant keywords and hashtags that show what people are saying about your and even your competitors online (whether or not you’re tagged). Of course, the flip side of social listening goes beyond monitoring where you should actually be engaging with those consumers.

In the end, not only can social listening help you generate leads, it can also deepen your social media research that can feed into determining your target audience.

Find out more about social listening, as well as the difference between social listening and crowdsourcing.

Identify specific demographics

Now is the time to get into the nitty gritty of your target audience. Based on the characteristics of your best customers and those who would most benefit from your products or services, determine the following demographics:

  • Age
  • Gender
  • Location
  • Occupation
  • Education level
  • Income level
  • Marital or family status
  • Ethnic background

Evaluate what demographics are the most crucial for the growth of your business.

Go beyond the demographics

Once you’ve solidified the demographics of your target audience, take it one step further. Consider their psychographics, which are the personal characteristics of people.

This includes:

  • Personality
  • Values
  • Attitudes
  • Lifestyles
  • Behavior
  • Interests or hobbies

Of course, psychographics go deeper than the surface demographics you’ve already determined.

Start by thinking through how your product or service fits into your ideal customer’s lifestyle. Ask such questions as:

  • How will your ideal customer use your product or service?
  • When will your ideal customer use it?
  • What features of your product or service are most appealing to your ideal customer?
  • How does your ideal customer consume media? Does he or she read the newspaper, attend particular events or search online?
  • What social media channels does your ideal customer use?

Your questions don’t have to end there, of course, the better you build and understand the persona of your ideal customer (i.e. target audience), the more specific you can target.

Confirm your target audience

Once you feel confident that you have identified your target audience, it doesn’t hurt to evaluate and confirm your decision-making result.

It’s key to consider whether your target is large enough, or has it swung from being too broad to being too niche? Will your target audience actually benefit from your products or services? Do you fully understand what drives your target audience to make purchase decisions?

Of course, simpler considerations include whether your target audience can actually afford your product or service and whether you can actually reach them with your message (or are they not easily accessible)?

In conclusion

It’s entirely possible that you’ve identified more than just one target audience. This is absolutely fine as long as you differentiate your messaging between niches. For example, you wouldn’t address stay-at-home mothers the same as about-to-graduate college students.

Just know that while defining your target audience can be difficult, it’s worth the effort. You can then be that much more successful in your digital marketing efforts, which can lead to more sales.

Check out our Digital Marketing 101 Guide for Beginners to get a better understanding about everything digital marketing can do. Plus, see our 18 low-cost marketing ideas for small businesses.

As you’re defining your target audience, consider leveling up your digital marketing with DailyStory and our 21-day free trial. Features include automating various marketing tasks, dynamic audience segmentation and more. Schedule your free demo with us today.

Use audience segmentation to generate leads

A segment is a grouping of your audience who share common attributes. Segmentation helps you get the right message to the right people.

Examples of segments include people in a 30-day trial who have not completed a purchase or customers whose membership expires next month.

Once you identify a segment, you can target the segment with specific messages using the channels most appropriate for that segment. And, using personalization, content is uniquely targeted at each individual.

The end result is each person receives content targeted and personalized to them, through the channel (email, text messaging, push notification, etc.) most appropriate to them.

Sounds great. But where do you start? With data.

Collecting customer data

You have more data than you realize and countless untapped opportunities to collect it. One of the biggest challenges we see with our customers is how to aggregate customer and prospect data together.

Aggregating data from multiple systems and applications is not easy, but when done, doing so creates a rich trove of data for segmentation.

Customer segmentation data sources may include:

  • Basic demographic data: age, gender, title and more
  • Website activity: What pages did the customer visit?
  • Past purchase history: What purchases has the customer made previously?
  • Submitted form data: What data has the customer submitted through forms?
  • Sales profiles: Information obtained from systems, such as Salesforce (for example)
  • Mobile app engagement: Data from mobile app usage
  • Customer location: What time zone is the customer in?
  • Customer communities or other applications: Pulling data from sources such as a Telligent community or other customer management systems.

And those are just some examples! In addition to the data you have, you can also augment data from external sources.

Augment customer data

In addition to the data you already have about your customers, this data can be augmented.

Examples include:

  • Converting addresses to geographic latitude and longitude for proximity-based groupings, such as people within so many miles or kilometers of a location
  • Average income and home value groupings (by using public and private sources this data can be derived from geographic information)

Building customer profiles

Now that you have some customer data, what do you do with it? How do you consolidate all the data into a unified customer profile?

DailyStory solves this by enabling you to extend DailyStory’s built-in customer profile.

For example, adding custom fields to your contacts, such as Membership Level, Expiration Date, Customer Groups and any other data type you can think of:

Next, you can update DailyStory contacts simply by uploading a spreadsheet. Including your own customer profile data.

While these two concepts aren’t unique to DailyStory, the ability for any customer profile data to be used for segment creation is unique. And, for those segments to automatically update themselves as data changes using Dynamic Segments.

Once you have your customer data aggregated together, you can start building your segments.

Building Segments

We recommend starting with large, “macro,” segments of your audience. Then, build smaller “hyper” segments.

What’s the difference?

Macro segments

Just as it sounds, a macro segment is a large segment, such as millennials, previous customers, current customers, customers in the U.S., people who use your mobile app, customers in Washington state and so on.

Macro segments describe a large group of your audience.

A macro segment typically represents about 10 percent to 30 percent of your total audience base.

For example, if there were 10,000 contacts in our list, we would expect 1,000 to 3,000 to be customers or previous customers.

Once you have established your macro segments, you’ll want to build smaller hyper segments.

Hyper segments

A hyper segment is a much smaller group and typically combines multiple macro segments along with other criteria.

An example of a hyper segment is millennials living within 5 miles of New York City that are previous customers.

Whereas a macro segment represents 10 percent to 30 percent of your total audience base, a hyper segment should represent about 5 percent or less.

For example, if there were 10,000 contacts in our list, we would expect 300 to 500 people to fit into a hyper segment.

Why are hyper segments so narrow?

Hyper segments are purposefully narrowly targeted.

Because the target audience is so specific, using personalization along with the most appropriate channel and message yields a higher engagement rate.

You can measure your overall engagement rate through opens, click and conversions.

Fit the channel to the audience

In marketing-speak, we say “channel” in reference to how we’re delivering our message: email, text messaging and push notifications are several examples.

  • Push Notifications:  Messages sent to people who installed your app. The message size is limited but represents an engaged audience.
  • Text Messages: Messages sent to people for whom you have both a mobile number and have opted-in to receiving text messages from you. Similar to push notifications, the message size is limited, but text messages see a much higher engagement rate than email.
  • Emails: Messages sent to people who have opted-in to receive emails.

When it comes to channel selection, use push notifications first (when/if available). When targeting younger audiences, use text messages. And email is the constant fallback if no other channel is available.

Once you select the appropriate channel, personalize the content to better target the recipient.

Personalization and content targeting

Personalization is your ability to use the data you have about your audience to understand how your content best fits their needs or interest. This ensures visitors and customers get messaging tailored to them.

In DailyStory, any profile field (including custom fields) are available for personalization. This includes basic personalization, such as addressing the recipient by his or her first name, or more complex personalization that selectively includes content.

The primary purpose of personalization is to make the message as targeted and as relevant to the recipient as possible. It goes hand-in-hand with the power of segmentation.

The more personalized your content, the higher the engagement rate you will see.

In conclusion

Properly segmenting your audience, choosing the most appropriate channels and personalizing your content will yield higher engagement rates. As an example, one of our customers achieved a more than 40 percent open rate on a campaign that used these techniques.

As you’re exploring audience segmentation strategies, consider leveling up your digital marketing with DailyStory. Features include automating various marketing tasks, dynamic audience segmentation and more. Schedule your free demo with us today.