How to successfully define your target market
Watching the Super Bowl is as much about the game as it is about the commercials. If you stop and think about it, all the commercials are geared to a target audience.
Simply put, target marketing is aiming your product or service toward a specific group of potential consumers. It involves concentrating your marketing efforts on a group of consumers who are most likely to buy and use your product. It can be the key to success for a business because marketing to the right group has the potential to attract new business and increase sales.
Most successful business owners would agree that target marketing is one of the first steps in a good business plan and the most effective way to optimize your resources.
As simple as the concept of target marketing may be, there are a number of challenges that coincide with the notion. A great deal of brainstorming and planning are essential to determining who should be included in this target group and what products or services would be most beneficial.
You wouldn’t dive into a body of water without having some idea of what you’re jumping into — the depth, threats or elements that could possibly get in the way of a successful dive. Target marketing is no different. If you are going to dive into a very specific market, there are several factors to consider.
How does this apply to financial institutions? In a perfect world, we could offer a one-size-fits-all financial product and be perfectly successful but, unfortunately, it’s not that easy. A range of factors should be considered to ensure you are effectively and efficiently reaching a targeted group of individuals who will benefit from the products or services being offered resulting in the increase of sales and business. Before you can clearly define your target audience, you should at a minimum, consider the following factors.
Identify and analyze
What type of product or service are you planning to market? Determine the features or characteristics you plan to incorporate into your financial product and then outline the benefits that product may provide.
Identify your potential customer base. Analyze your current customers and the products and services they are utilizing and think about whether other potential customers may also utilize these financial products or services.
Often there is a correlation between certain products and the individuals using them. Therefore, evaluating the common interests and characteristics of your existing customer base may be beneficial to broadening that customer base.
Identify the features and benefits of the products or services you are planning to offer. Determine how your product or service, based on its highlights, can improve consumers’ lives, whether that be free ATM costs or low interest lines of equity.
Demographics & psychographics
Determine who may have a need for the financial product or service you are considering. Take into consideration who will actually buy or utilize those products and services. This means first looking at your geographical location to establish the size of your potential marketing area. Build onto that concept by considering factors such as age, sex, income level, occupations, marital status or the backgrounds of the targeted area.
Psychographics include more personal characteristics. When analyzing your demographics, consider influ ences like lifestyle, behavior, interests or hobbies of the individuals your marketing group would include. For example, if you are planning to market a financial product in a college town, it would be advantageous to consider factors such as age, income level and interests of your targeted area.
These factors alone give you a clearer idea of what delivery methods may be the most effective for reaching your base target group. Which leads us into the next area of consideration.
Marketing resources and methods
Often, we get caught up in using methods of delivery that we know are successful based on past data. Unfortunately, in the ever-evolving world of technology and social media, we may be selling ourselves short if we rely on the past when it comes to marketing.
The targeted audience must be the focal point when choosing the best approach for advertising a specific set of financial products and services. If your audience is unlikely to use social media, perhaps a paper brochure would be an excellent form of marketing. However, if your audience is technologically driven, social media may be a better form of communication. The goal is to determine the best way to ensure your target audience receives your message..
What’s better about the financial product you are offering than your competitors? An analyzation should be conducted of the products and services offered by your competitors as well as the customer base they are targeting.
If your financial institution is offering the same product or a product with similar features, you want to either target a different area or uncover a niche in the market that they may be overlooking. If it seems like everyone in your area is focused on loan products, offering a deposit product with better features and customer service may be just the right idea to beat out your competition and expand your customer base. And, who knows, you may be able to offer that loan product after all if your marketing can get that potential customer into your financial institution.
Regulatory compliance and limitations
Compliance and constraints are always crucial factors that must be considered in marketing. Regulatory limitations can put a real damper on an entire marketing plan if not carefully researched and resolved.
Now more than ever, regulators are taking a closer look at the marketing and advertising efforts of financial institutions.
Words such as unfair, deceptive or abusive are scary areas of compliance that we are all trying to avoid. While there are plenty of regulations that govern the marketing of financial products and services, if you are clear, concise and fair, that is half of the battle for success from a regulatory standpoint.
The considerations noted above serve as a compass for the direction in which to market, but keep in mind that the final goal is to achieve a successful plan for target marketing while also serving your market fairly.
Although you may focus on a target audience, keep in mind that this does not limit your customer base to that target group. After all, the utilization and benefits of your products or services should be offered fairly and equally to anyone meeting the requirements or standards of the offered product.
In the dynamic world of marketing, targeting your audience is the key to success.
Focusing on the considerations discussed throughout can be the difference in defining your target audience and meeting those sales goals or leaving gaps and failing to meet those objectives. Once you’ve met the challenge of targeting your market, assess your decisions and be willing to change your audience as the market evolves. Remember, the key to success is getting your message out.