Sooner or later, if your business is successful, you’ll begin to look at diversifying and expanding your target market.
The first, and most crucial, step in targeting a new market is to research it. Find out things like the median age and average income, as well as geographic dispersion, how much the demographic earns and whether they’re likely to spend money on your product. For example, an older market might have more disposable income on average, but be less inclined to part with it.
“Invest time in things like focus groups, doing polls on LinkedIn, and talking to everyone who has any kind of experience in that industry,” suggests Yesim Nicholson, owner of My Marketing Mentor. “That’s not going to cost you very much. If you do have the budget, though, I would suggest getting a research company in, and they’ll do all of that for you.”
It’s very important to establish how large the market is.
“It has to be large enough to be profitable, but small enough to create really specific and targeted messaging and promotion, so that you can become known as an expert in that particular market,” advises Nicholson.
It’s also vital to establish if what you’re offering is likely to be desired by the demographic further down the track, as well as whether that’s important for your projected business model.
“When identifiying a new customer base, small businesses must determine if it’s profitable for them,” advises Katie O’Rourke, managing director of Cake Marketing. “Is it sustainable long term, or is it a short term trend?”
If you’ve established that the new market is viable for your business to target, find out more about what they perceive as important or valuable with respect to goods and services.
“Understand this market’s needs and wants, and then look at how your business can diversify their product or service, or expand their current offering to meet these,” advises O’Rourke.
Tailoring or modifying your current offering to the needs of the new market is a much less costly and more time efficient approach than developing an entirely new product or service, which can impose much greater risk on a business with respect to financial commitment and lead times.
“For example, if your small business sells shoes, also look into selling handbags, or align with a non-competitive store that does, and swap merchandise or arrange a referral system,” says O’Rourke.
Once you’ve identified a profitable customer base, and have formulated a product or service with a point of difference that addresses their needs, you need to communicate the value of your business to your new audience.
One effective way of doing this is to being to establish your business as an expert in your particular market offering.
“Go to things like tradeshows that might be relevant to that target market. Read publications that might be relevant. Put yourself in the shoes of your customers, and start thinking where do they spend their time, what are they influenced by, who are they influenced by, is money an issue? Talk to that market and look into things that they would spend their time on,” says My Marketing Mentor’s Nicholson.
“If you’re targeting accountants, for example, then you might contact the chartered institute of accounting, and explain t them who you are and why you’re an expert in the area, and ask if you could present at their next event for example,” she advises. “You would start blogging about relevant subjects to show you have knowledge and expertise in that area. Social media is a great way to establish yourself as an expert, because as soon as you start talking about that particular topic, it shows that you know something about that market.”
With respect to active methods, search engine marketing is crucial for gaining online traffic from a new market. Tailor messages about your new offering to appeal to the market’s interests. There are a number of ways to go about this, depending on the demographic. An older market would be more open to a dedicated email marketing campaign. A younger market, on the other hand, would be more susceptible to advertising on social media. Establish a fan page for your business that focuses on your new offering, and investigate paid advertising on services like Facebook.
Regardless of which marketing avenue you choose to use, it’s essential to match the tone to the interests and calibre of the associated demographic.
“Communicating about a small business’s professional golfing services to mena ged 45+ who live in a metro area, have families and work full time will be very different to the tone, message and channel used when engaging with 20-30 year old women who have degrees, high disposable incomes, who do not have families and are interested in travel and fashion,” notes O’Rourke.
Finally, My Marketing Mentor’s Nicholson advises that it’s best not to spread your marketing efforts too thinly.
“There’s many ways you can market yourself effectively, especially nowadays when there are all those low cost tools available to us,” she says. “My advice is always to pick three or four that you can d really well, otherwise it’s really overwhelming; you try to do everything, and you don’t end up doing anything really well. So pick three or four that you feel really comfortable with, that you feel are going to be effective, and focus on those. Set yourself a time for three to six months, and track what the return is on those.”
Especially early on, it’s vital to monitor and review how effective marketing efforts have been among the new market. If you’re using search marketing, have all links directed to a page with a unique 1800 number on it, and measure the ratio of clicks to qualified leads every two weeks. Tailor particular pages of your existing website to the new products or services offered, and ensure you have an analytics package operating effectively so you can tell how much traffic each page is generating, and where that traffic is coming from.
“A simple online survey, phone interview or focus group can provide small businesses with invaluable insights as to if their new strategy worked, to what extent, and why,” says O’Rourke. “This data will provide an informed foundation for future decision making in that particular market."
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