Marketing for Start-ups: Define Your Target Audience in 3 Steps
There is a crucial tipping point that many startup executives and founders find themselves in — you have a handful of clients, about $1-2M in revenue, and you want to build out a marketing plan to grow your business.
At this point CEOs and founders typically think of their Target Audience in very broad terms. They are hesitant to get too narrow when it comes to thinking about potential customers. The main reason for this type of thinking is that they don’t want to miss out on selling into a certain segment or set of people.
For example, let’s say you provide real estate software and you believe your Target Audience could be real estate agents, insurance providers, and lenders. You would then need to consider three sets of pain points and three different solutions which means there are at least three different messages across multiple platforms and channels to reach them.
Can this be done? Yes. But can you accomplish delivering three messages effectively and efficiently within your budget? Most likely no.
Before your startup invests time and money into building out a marketing plan, it is imperative to define your Target Audience. In this guide you will learn what a Target Audience is, why defining it will make your startup successful, and get the three “how-to” steps your startup should take.
What is a Target Audience?
In simple terms, your target audience is the specific group of people that are most likely to buy your product or service. Why is this set of people likely to buy your product? Because they have a particular problem and your offering is the solution to that particular problem.
Beyond sharing a common problem or challenge, the buyers within your Target Audience have shared characteristics and demographics. For B2B startups, the shared characteristics of your Target Audience could be job title, industry, company size, or revenue. For B2C startups, these characteristics could be age, geographic location, gender, life milestones, or interests.
Why defining your Target Audience makes your startup successful
It’s impossible to reach everyone. Defining your Target Audience will help you get to know your customers and prospects on a deeper level by understanding their needs, challenges, and perceptions.
I like to think about a Target Audience as the destination on a map. If you don’t know where you are going you may wander around aimlessly for hours… or days! Having a clear destination will help you determine the most efficient route and the best mode of transportation you should take. In this scenario, your route and mode of transportation are your marketing plan and the channels you invest in to reach your Target Audience.
Spend your funding wisely
Let’s say you just secured some funding and you are ready to start investing in marketing. That money can go really quickly. Especially if you don’t know the right marketing channels to go after. At the center of your marketing plan, your Target Audience governs which marketing channels you should pursue and defines your messaging and positioning across your website, ads and sales decks. Defining your Target Audience will help your organization save time, energy, and money.
How to define your Target Audience in 3 Steps
Before we dive in, I like to caveat that there are many ways you can define your Target Audience. I recommend the following three steps as a starting point. Your startup has lots of priorities so start to hone in by using these three inputs.
Step 1: Go back to your original vision of who you serve and why
Spend time thinking about why you started the company, the initial problem your product was intended to solve, and who was meant to use your product and why.
Begin to identify the common threads or patterns. Do you see the specific problem that a specific type of person in a specific industry is dealing with?
At this step, you want to be clear on the following:
The problem your product solves
The type of person who has that problem
The characteristics of that person — job title, seniority, industry
One great example I like to draw upon is Uber. Originally the ride sharing app only offered their Black Car Service – a premium experience for a particular clientele. Uber initially recognized the problem that their Target Audience experienced and established how they were going to solve it. They took the time to figure out their software, mapping, payments, how to screen drivers and how to reach new customers. They nailed this initial segment of users first. Once they had a major foothold in this market they then diversified their offerings, such as ride sharing and UberX, and expanded into new markets and cities. Uber didn’t wait 10 years to grow their Target Audience but they also didn’t do it overnight.
Get narrow on the set of people you serve before thinking about expanding your audience.
Step 2: Dig into your current customers
Your current customers offer you a wealth of information you can use to define your Target Audience. I recommend you follow this three step process:
Create a list of all your current customers and bucket them into categories that make sense for your business. These categories could be industry, size, or location. Look for patterns across your current clients.
Establish your ‘Voice of Client’ by talking one-on-one with your clients. I can not stress enough how important this is. Listen to how your customers describe specific pain points that your product solves in their own words. Ask your clients why they bought your product. Learn about their motivations and what factored into their decision making process. Get a deep understanding for your customers needs, wants, and perceptions of your company. You can learn more about Voice of Client by reading this article.
Look into your CRM. See where your current revenue and forecasted pipeline is coming from so you can garner where the most interest lies. Don’t just give yourself a month’s worth of data. Look back into historical data as much as you can.
Step 3: Revisit your total addressable market
Before you pitched your business to investors, you most likely knew your total addressable market figures. When was the last time you crunched those numbers? Has there been some shift in the economy? Is there a new competitor? Evaluate what is currently happening in the marketplace.
Essentially you need to find out how many other companies are trying to go after your audience and the value of your market. Put together both qualitative and quantitative metrics to determine what is most advantageous for your startup given your market fit, resources, and budget.
Additional considerations
I challenge my clients to define a Target Audience from a lens of diversity and inclusion. It’s important that all businesses look into markets or opportunities that you could be missing out on. Be aware that you may have inherent biases in the model you’re currently working with, especially if you’re using AI and ML.
Bonus tip! When you are ready to bring on a CMO or a senior marketer, you want to hire someone who is asking questions about your Target Audience. This person should have recommendations on who your target audience is and how to reach them.
Final thoughts on your Target Audience
It can be tempting to cast a wide net. Who wouldn’t want to buy your product? Afterall, you have spent countless hours building an amazing product and company.
But, the most successful startups start small. They understand their target audience inside out. Who they are, what motivates them, what their pain points are, how to reach them, and how to turn them into loyal customers.
I like to reference this diagram:
When you go after five different audiences at once, you may gain a little traction with each. When you focus, go hard, and deep on the one audience, you become successful.
Are you ready to define your Target Audience? I would love to help you accomplish your goals. Contact me for a free 30 minute consultation.
