One of the biggest marketing and strategy mistakes most business owners and entrepreneurs make is going after the “everyone” market with their products and services (or at least, everyone who might be able to buy what they’re selling). As you’ve hopefully discovered by now, going after everyone is a recipe for failure.
However, not going after everyone, still leaves a lot of discretionary room for who to go after (just short of “everyone”).
If you don’t believe me, gather your team together and have them write down what they believe your target market is. Having done this numerous times with clients, my guess is that the answer you’ll receive back will be rather broad and all-encompassing. Combining everyone’s ideas together, it might look something like,
- We target men and women
- Between the ages of 25-65
- Who are either married or single
- Work in a small, medium or large-sized business
- They’re involved in an executive, managerial or operational role
- They live somewhere in the US or overseas
- And they breathe oxygen
Moreover, when you’re trying to sell to everyone, cost becomes an issue and you get stuck in the commodity trap (where margins are driven down toward zero or below). Selling to everyone isn’t just a bad strategic idea, nor is it just a difficult task to execute, it’s a terrible idea for your margins.
So, out of all the people you could market to, who should you market to?
I think the best question to use to frame that question is, “Who do you want to be a hero to?” Yes, questions like, “Who provides us with the largest transactional value?” or, “Who provides us with the greatest number of sales?” or, “Who provides us with the most revenue?” are all valid (and we’ll review some of them below), but I don’t think they form the best question because there’s something beyond getting a sale that matters (which is why I like the hero question). Heroes have fans. And those fans love to tell their friends about their heroes.
So, who could you be a hero to? And then, who do you want to be a hero to?
To help you answer that question, here are a five questions to ponder.
Q1. Who Has an Urgent Pain, Need or Want That You Can Solve?
Every hero story has one thing in common. Someone (or a group of someones) has a problem that they can’t solve on their own (An extraterrestrial is attacking the city. The police can’t hold them back. Everything looks bad. Enter Superman (or Batman or The Flash or Iron Man, etc.) and the hero saves the day.
In other words, you can’t be a hero to someone if they don’t have a compelling problem that they desperately want solved.
There are plenty of problems out there. Finding a problem to solve isn’t the issue. Finding an urgent problem that someone wants solved (that you can solve) is the problem you have to solve. Why? Because when someone is in pain (or has a problem they can’t solve and it’s frustrating them) and you relieve that pain (or solve that problem), they become emotionally committed to you. You become the hero.
So, who has an urgent pain, need or want that you can solve?
Q2. Are They Large Enough To Build A Solid Business Around?
Don’t pass by this question too fast because I’ve worked with a number of companies that when they started to niche down they went too granular and the market they were trying to reach was too small. Even if they reached a significant number of people in that niche, they still couldn’t build a great business around them.
For example, if you were in the data automation business and you decided to target rural standalone medical emergency units in Charleston County, SC, that’s probably not a great target market to be a hero to because it won’t sustain you for long. However, expanding either the territory (for example, all of South Carolina or the South East) or by expanding the category (for example, by dropping rural and targeting all standalone medical emergency clinics), or by doing both, you could build a big enough target market to build a bigger business around.
So, is the who you’re thinking of big enough for you to build a solid business around?
Q3. Do They Have the Capital Resources To Pay the Prices You Want to Charge?
In the search for more customers/clients, the vast majority of businesses go after low hanging fruit—which usually involves a lot of conflicts and negotiations over price. Why? Because the sales force for that business usually isn’t going after the right group of people who have the financial resources to pay the price the company would like to charge—they’re going after the easy to reach group of people.
It should never cease to amaze you and me that there are people out there who actually buy $50 burgers, $300,000 Bentleys and $5,000 Ralph Lauren Purple Label Suits. Not everyone is shopping at Walmart looking for everyday low prices.
If you want to get out of the commodity trap and lots of discussions about price, move to a different market. Move upscale. You get to choose who you’re a hero to. Choose higher.
So, do the who’s in the target market you’re thinking of have the financial resources to easily pay what you want to charge?
Q4. Are They Small Enough That You Can Target and Reach Them?
One of the reasons why the “everyman” markets are so bad is that, unless you have deep pockets, you can’t reach them. Even if you’re trying to target a small city, it’s hard to reach everyone in that city. Moreover, not everyone needs what you’re offering.
Targeting a group of people you can never reach is a massive waste of time, energy and capital. Instead, if you want to be a hero to someone, make sure you can reach them with your story of how you can help them find the relief they want from their pain or problem or find the pleasure they want by using your product or service to meet their wants or needs.
For example, if you were in the fitness business, choosing a target market of “Everyone who has a pulse,” would be an unwise choice. On the other hand, targeting a small enough market that you could reach (let’s say, male executives between 40-55 who play basketball on the weekends and want to beat the younger guys they face on the court) would be small enough that you could target them—and be a hero to them.
So, is the target market you’re seeking to reach small enough for you to target them?
Q5. Can You Easily and Affordably Reach Them
This last and final question is here to help you remember that when you choose a target market, the goal is to be able to market to them—not just select them. In other words, what good is a target market that you can’t reach or is too expensive for you to reach given your price points and margins?
Note: Price points and margins are relative. If your price points and margins are high, you can clearly afford to spend more to reach them. If it costs $5,000 to acquire a customer for a $100,000 sale and your margins are high (let’s say 70%), you can do that all day long. On the other hand, if it costs you $5 to acquire a customer for a $7 ebook, that’s not worth doing, unless you have a huge backend that makes that $5 irrelevant.
Realizing that price and affordability are rather elastic, here are a couple of ideas for evaluating if you can easily and affordably reach people in your target market. For example,
- Is there a list or database you can purchase?
- Do they have an association?
- Are there regular meetings or conferences for members of that target market?
- Are there forums or online groups you can join?
- Are there any magazines of newsletters on online media properties in that industry?
- Are there affordable sponsorships opportunities with highly read blogs or highly listened to podcasts? Etc.
In other words, is the group you want to be a hero to easy enough and affordable enough for you to reach?
If you want to turn your small business into a bigger business, you have to become a hero to someone. So, who is that someone?
- Do they have an urgent pain, need or want that you can solve?
- Are they large enough to build a solid business around?
- Do they have the capital resources to pay the prices you want to charge?
- Are they small enough that you can target and reach them?
- Can you easily and affordably reach them?
If you can answer affirmatively to all five of those questions, chances are you’ve got a great niche of people who you can be a hero to. Now, go reach them!
To your accelerated success!
P.S. If you have any additional questions that you think would help other business owners or entrepreneurs narrow down their niche, make sure you add them to the comments section below (or click here >> if you’re reading this by email or RSS)