It’s easy for startup founders to believe the whole world will love their products. After all, We all eat, sleep and breathe our products. But the harsh reality is we just cannot begin anything without a concrete understanding of who exactly our target customers are. If we try to market to everyone, we waste time, money and other resources. Therefore we need to focus efforts on the audience that has the highest probability of purchasing. It also allows to build early momentum more easily and word of mouth builds faster across like-minded groups, and success stories resonate well across a segment of similar prospects.
Here is our take on how to find targeted market for startup
Identify the demographics
It’s very important to ask yourself whom should you market and how do you most efficiently reach them? This will include identifying the age, gender, geographic location, occupation, socioeconomic status and other demographic and psychographic traits of the consumers who would be most interested in purchasing your product or service. The key is to identify a niche target market and go after market share aggressively.
Well, How do you choose a market?There are six main factors to consider
What differentiate you?
There are loads of other alternative for prospects. What makes your offering uniquely different? What can you do that no other competitor can do? If the market is over-saturated with competitors, it will be both difficult for you to stand out and also difficult to get funding. More importantly, if you reach for a broad market, you will need more financing than if you pick a more targeted, niche market. Understanding your product as well as competitions is critical to success.
Take a hard look at the value those differentiators can bring to prospects: Even if there are no direct competitors for your service, there is always competition of some kind. Something besides your product is competing for the potential client’s money. What is it and why should the potential customer spend his or her money with you instead? You should be able to evaluate whether the value proposition you provide is robust enough to cut through the noise and be attractive to your potential customers.
Identify prospects that care about your key differentiators the most: If you look across the broader market, who cares about your value more than the average prospect? Some prospects will says “yeah, your stuff is cool”, but others will jump out of their chair and yell “That’s AMAZING – I need that right now!“. You are going for the second group. Put a different way – this is the group of folks that are the easiest to sell to right now.
Recognize people that have a high affinity for your offering?: Maybe they tend to be a certain size of company, in a certain vertical market, in a certain geography. Maybe they are consumers that already own certain products and also have certain hobbies. This is where you need to get super specific. Your segmentation will depend you being able to identify the characteristics of an ideal, easy to close prospect.
Is the segment big enough to meet my sales goals yet not so massive I can’t really target it?: Keeping in mind that you aren’t going to close everyone in your target segment, can you realistically meet your sales goals with just this segment? On the other hand, is the target so massive I can’t expect to get noticed? In my experiences the smaller and tighter you can get on your segmentation, the easier it is to get early traction. You can always go broader later.
Can the target prospects buy from me? If not, do I have a way to get to the real purchaser?: This last one is important. Can your target prospects afford what you are charging? Do they have budget authority and if not, who do they have to go to for approval? Can they champion your solution inside their business and make a deal happen? Do they generally buy through a channel (retail, resellers, VAR’s, etc.) and if so, can you sell through that channel? Selling is after all, the purpose of this exercise.
If you understand what makes you amazing and can find people that will pay for that amazing stuff, then Congratulations you have found yourself a nice target market.