Why Your Target Market Is Not, That's Right, Not Important Instead, zero in on "the profitable niche."
Opinions expressed by Entrepreneur contributors are their own.
Every business growth program on the market begins the same way: In Chapter One, Module One or Video One, you're told to "figure out your target market." You're given examples. Then your business manual moves on to the next step -- leaving you with a gaping hole in your business.
Related: 6 Not-So-Obvious Places to Find Your Target Market
The reason: A "target market" is not necessarily that important. If you're gasping at that sentence, keeping reading:
The reason a target market is not that important is that when you have clarity (I mean real clarity), you are positioned to help your ideal clients achieve their goals and overcome their problems. Clarity creates impact for your clients and more value. And it starts with knowing the answers to these two questions:
- Whom you serve -- Knowing that you are here to serve a specific segment gives you the clarity to reach that segment's customers and make compelling offers.
- What problems you solve – There is no business unless you generate results for your clients. But first, you have to understand the specific problem your clients have in order to create the solution.
In general, the world of business is an endless struggle due to three kinds of pressure:
- Competitiveness. There are so many providers and little-to-no distinction made about the product from the perspective of the buyer.
- Information overload. So much content (written, audio and video) is being developed, and aims to get your attention, that we (as consumers) train ourselves to ignore what does not appeal directly to us.
- Doing what everyone else does. When businesses struggle to get leads and new business (apart from referrals), their problem is likely due to their being a "jack of all trades" or in the business of being "all things to all people." Yet those characteristics make for a trap that only leads to more struggle and stress.
Established businesses see the signs when they have a stressed cash flow, when they're not closing more profitable work, when they're not attracting the right customers. These problems are all connected, if you think about it. And there is a way to shift this in your favor.
Related: The Best Way to Connect With the Affluent Customers You Want
In fact, the first step in developing your marketing (and your brand) is to define your specific audience. This word "specific" is the key word. It's the slice of the market that is ready for your offer. Its members understand the benefits of what you sell. They are ready to make a decision.
And this gets us back to "target market," because your specific audience is a segment inside your target market, or as many call it, your "niche." Most people stop at the "target market," however, and just hope to find the right prospects there.
This is why your target market is not as important as your niche. Think of the latter as the most important 20 percent of your entire target market.
Think, too, about the difference between the two -- though many people use the terms interchangeably. Once you know what customers are in your niche, you can create a strong business to support their specific problems. You can create more depth than width in your impact.
To grasp the importance of "depth," check out this video by Gary Vaynerchuk. Says Vaynerchuk: "The world is about depth, not width." He refers to social interaction, but social interaction also works when you focus on the customers who gain the most from your work.
The more clarity you have for your "specific" audience, the more likely you are to have a profitable and impactful business. I think it can go even further. I refer to the segment of your target market gaining the highest value from your work as the "profitable niche," those all-important 20 percent.
The benefits of clearly understanding your profitable niche are abundant:
- Clear direction for your business
- Marketing that attracts the right clients (not just any client)
- Stacks and stacks of references in one area that position you as the authority
- Exceptional pricing based on the value you create for your clients
- Attraction of more quality clients
- Greater impact with every client
Putting the effort into finding your own profitable niche is an important decision that should not be taken lightly. If you want to build a business, you must be certain how to solve the problems of the people you work with.
But if your understanding of your clients' problems is weak or unclear, you will continue to struggle regardless of your strategy.
Related: Starting a Business? 4 Ways to Research Your Potential Customer.