Small business owners know how important it is to be familiar with customer needs and preferences. But having a general idea of what customers want from your business is not enough to create truly effective advertising and marketing campaigns. Entrepreneurs must take that knowledge to the next level and define target audiences to connect with the customers they want to reach.

Target audiences are distinct groups or segments of customers, and clearly defining your business’ target audiences will help you promote the aspects of your business that are most relevant to each group.

Most businesses cater to a variety of clients and customers. Some marketing strategies will be relevant to all those segments, but knowing each target audience well will help you deliver your marketing messages in a way customers will respond to best.

Segment your existing customers

To start defining your target audiences for marketing purposes, take a look at the customers you have now.

• Who are your best or most profitable clients?
• Which group of customers makes up the bulk of your business?
• What do all these customers have in common?

Defining what your customers have in common can help you craft a marketing strategy to draw in more of the same people.

For example, a small diner may find that while customers come in a steady stream throughout the day, the biggest rush comes at breakfast, when profit margins are highest. Who are these customers? If the bulk of the morning rush is made up of commuters, the diner may consider offering a special for anyone carrying a train pass. Or if most of the customers are employees of a nearby company, the diner can offer a discount to anyone with an ID badge from that company.

On a wider scale, you can segment your customers using demographics and psychographics. Demographic information categorizes people in categories like age, location, occupation, sex and income.

Psychographic factors, on the other hand, define people based on their interests, like people who collect comic books or people who breed cats. Questions to ask yourself about your customers can include:

• What is the age range and median age?
• Is the group primarily male or female?
• Are they urban dwellers or suburbanites?
• Are they highly educated?
• What are their special interests or hobbies?
• What is their income range?

Knowing your customers can help you combine these factors to define your target audiences – again, your business likely will have more than one – as specifically as possible:

• Upper-income women with school-age children
• Teen-agers living within one mile of store
• Men over 55 who are interested in digital photography

Learn more about your target audiences

Regardless of how you segment your customers, your primary target audiences should be those customers who make up the bulk of your business or are most profitable. Once you define your target audiences, you must learn about their preferences and habits both as they relate to your business and in context of their own lives.

For example, if your target audience is teen-agers living within one mile of your store, where else are they hanging out and spending their money? Why do they come to your store and not another one down the street?

The only way to develop effective consumer communications is to become knowledgeable about your core target. Some ways to get to know your target markets include:

• Asking people in your target audience more about themselves. Chat with your customers about what they like, or design a short a survey or questionnaire and give it to current customers and people who might be interested in your product or service. Be sure to explain why you want the information and what you plan to use it for. Offering discounts or a prize drawing for those that complete the survey can help you boost your response rate.
   
• Listen to what people are saying. When customers come to visit your store, or when you are paying a visit to a client, pay attention to what customers say to others. Take note if some themes tend to come up frequently. Perhaps many of the mothers who visit your store have children on the same Little League team, or perhaps the teens coming in are all communicating with their friends through their cell phones. Simply paying attention to your customers is a great way to get insights on what they are thinking.
   
• Visit the places your target audience does. Stop by some of the places your target customers might visit to get even more insight on their outside lives. If your target customer is the 55-year-old male interested in digital photography, where else is he spending his time? Are there digital photography seminars being held in your neighborhood? Go to them and find out what people are saying.

Tailor your marketing objectives to your target audiences

As you learn more about your target audiences, write descriptions of them, making them as specific as possible. Then decide what your primary objectives are with each.

• Do you want your most profitable customers to refer you to other similar customers?
• Do you want your most frequent customers to spend more on each visit?
• Be sure to link your marketing objectives to specific business objectives.

Using the information you’ve gathered about your target audiences, you then can decide whether you can best achieve your objectives by creating one marketing program to accommodate various audiences, including everyone in a single program or running separate programs for each audience.

For example, it may be that most of your customers, regardless of demographics or psychographics, come to your store simply because it provides the lowest price on a certain set of items. In this case, one marketing program for all customers would be the best use of your marketing dollars.

It may be that the bulk of your customers in the morning are business commuters, while your highest-spending customers during the day are mothers with school-age children. In this case, you may advertise a “morning special” good during commuting hours to drive more traffic, while also developing a separate loyalty program offering special benefits mothers may find attractive.

The more clearly you define your target audiences, the better you can reach them and encourage them to support your business. As you track the effectiveness of programs targeting different audiences, be sure to periodically refresh and refocus your research on your target markets.

Customer preferences and business climates are always shifting, and the most successful business owners are those who adapt their businesses to those constant changes.

© 2007 Eric Stephen Swartz. All rights reserved.