I was recently asked what the biggest mistake was when starting a new business. My answer isn’t specific to new businesses though. I see this mistake being made by businesses of all ages and across all industries.
They don’t target a specific market segment. In talking to business owners about why this has happened, the response if often, “Everyone can use my product. Why would I want to restrict my marketing to just one, or even a couple of, segments?”
My answer is that you can’t effectively target your messages to ‘everyone’. It just doesn’t work as ‘everyone’ has different needs. Your message will be too broad, and no one will end up listening.
A simple exercise is to think of the segment with the greatest need for your product. So, they will be businesses or consumers who need to [ insert the primary need your product or service satisfies ]. How big is this segment? What are the purchase values of this segment? What value would they put on satisfying their need and how likely are they to spend money to do this? Where do they gather? Are they accessible to your business?
And once you’ve identified this segment, be passionate about it, know this segment inside out, ensure all your products and services are needed by them, build alliances with other businesses who share your segment and ensure all your marketing efforts are placed where this segment gathers.
Your business may also have more than one segment that needs the products and services you offer. But know which products and services are most needed by each segment. And recognise that your messages and channels to market may be different for different segments.
It is often said that the best segments are ‘a meter wide and a mile deep’. What this means is that your messages can be very specific, but there are lots of people potentially listening. In my experience, you will almost always get a broader customer base than who you target. But if you don't target, you'll struggle to get the right customers for your business.