How to Define Your Target Audience?

Knowing your target audience well is the booster of your startup`s success. If you`re aware of who your customers are, what they need, and how you can satisfy them, you create a great ground for the company`s development. However, how to get to know your target audience? Let us tell you.

What is a target audience?

This is a group of people who are potentially interested in your products or services. To build a successful startup, it`s essential to define your target audience as accurately as possible. Otherwise, you may end up with a great product that has little demand.

For example, before developing a fintech app, you should analyze its potential users to build smooth communication, launch effective ad campaigns, and provide the functions they`re likely to need. By conducting such research in advance, it will be much easier to select the appropriate tone of communication, sales channels, and marketing tools. As a result, you`ll be able to minimize risks and allocate the budget reasonably.

The target audience is those people who are willing to become buyers, because your goods or services cover their needs. Such potential customers are willing to pay, and it is on them that the brand's marketing efforts should be focused — advertising in social networks, email newsletters, content, etc.

Target audience VS Target market

Before determining your target audience, it`s necessary to distinguish it from the target market. These are similar notions that are frequently used interchangeably. However, there are still some differences you should be aware of.

The target market is a broader term which means any person/company that is likely to be interested in your product/service. An important part of your target market is your target audience. This is a group of people who you target a marketing campaign or advertisement.

How to define your target audience?

To identify your target customers, you need an audience analysis. It is important not to rush into setting up a target, but to conduct a basic marketing study to define the target audience of advertising.

After all, audience research is the foundation for attracting the target audience. Without it, the startup will resemble a lottery where you`ll have to constantly look for new ideas to attract customers`attention.

Benefits of the audience research

Helps to define the functionality set

According to the theoretical data about your target customers, you can provide them with the product they really need. You`ll be able to identify the product`s functions that are likely to be in demand and unnecessary ones. This way you minimize risks and avoid wastes costs.

Helps to evaluate the idea

Having a detailed portrait of your customers, it`s easier to see whether they need this idea. By getting to know your buyers better, you can forecast their attitude to the product and adjust it to their needs and wants.

Helps to build marketing strategy

Not only does the target audience analysis enable you to assess the product`s feasibility, but also select the best channel for its promotion. If you know your customers well, you can draft an efficient marketing strategy including the suitable sales channels and tools.

Simplifies the development process

Being aware of who your customers are, you can streamline the development cycle at every stage. The detailed portrait of your target audience serves as guide when creating a product and define its key features based on customers`expectations.

Audience analysis types

The target audience analysis encompasses the following types:

Behavioural analysis

This is a systematic marketing research on obtaining and processing results related to customer preferences, their expectations, and unmet needs. It includes identifying satisfied and unsatisfied needs, studying the buyers`expectations, controlling the customer's reaction to the product`s quality, and forecasting demand.

Some of the behavioural approach tools are RFM-analysis, ABC-analysis, and XYZ-analysis. They allow manufacturers to predict fluctuations in consumer preferences, adjust goods/services, optimize advertising strategy, improve promotion channels, and enter new markets. In total, the behavioural analysis helps businesses successfully compete in the market.

Situational analysis

This type reviews a particular situation for which you gather your customers. What purpose do you assemble your target audience for? Under what conditions have customers been gathered? Have they been socially or systematically coerced into hearing you? Answer these questions to better understand your target audience. This way, you`ll be able to select the appropriate tone and agenda.

Demographic analysis

Here you need to view your customers from a demographical point of view. Whenever addressing a target audience, it`s essential to be aware of its age, gender, major, social class, race, ethnicity, religious affiliation, etc. To do an accurate demographic analysis, you should take two steps: gathering of demographic data and its interpretation. Take advantage of questionnaires and available databases to get to know your target customers.

Social analysis

This type is based on various online data sources such as social media. This helps companies identify what social networks their users prefer and craft the content they`re likely to engage with. By analyzing the customers`profiles on the Internet, you gain crucial data about their behaviour, needs, and wants. It also helps you build efficient promotion and sales channels through which you`re going to offer your products/services.

Stages of the audience analysis

As soon as you`ve picked one of the types you like, it`s time to get familiar with basic stages of the audience analysis.

1. Make up a persona of your target audience

Conduct theoretical research to identify the following points:

• demographics (gender, age, family status, education);
• geography (place of residence, climate, features of the region);
• economy (income level, solvency);
• psychography (character traits, lifestyle, core values).

Although it might seem this analysis is too detailed, it is not. People of the same age and wealth living in different cities may have diametrically opposite interests, which will affect their choice when buying.

Ask yourself:

• Why does the customer need your product?
• How will it make their life better?
• Do they actually need it?

Determine the needs of your audience — afterwards, it will be much easier for you to pick up the rest of the characteristics of a potential buyer.

2. Put it into segments

After you have drafted the overall picture of your audience, you need to segment it. The characteristics remain about the same but now you should deepen the analysis and divide the audience into at least 3 segments.

To make things more illustrative, let's consider the case of a streaming platform.

Segment 1: boys at the age of 13-18 years old. They like watching game and sport streams but don`t want to make content themselves. Their solvency is low — they`re likely to use only free or freemium options.

Segment 2: freelancers at the age of 20-30. They have already acquired some knowledge in a particular field (games, politics, economics, psychology) and now are ready to share it by streaming. This segment is likely to use paid functionality viewing the platform as their workplace.

Segment 3: office managers at the age of 30+. They prefer to watch some streams on economics/politics from experts and are solvent enough to pay for additional options.

As you can see, these are very different people, but everyone has the same request — a variety of streamers, high-quality content, and reliable support service.

3. Use the 5W Method

This is a popular technique that was proposed by Mark Sherrington. To divide the audience, you need to answer 5 questions:

• What? — a description of the product/service you offer;
• Who? — the portrait of the customer who will potentially buy your products/services;
• Why? — the customers`motivation to make a purchase;
• When? — the conditions for purchase.
• Where? — the place of purchase.

By answering the questions as precisely as possible, you will be able to see not only who to offer the product to, but also how to do it in the most effective way.

Now you have all the tools to describe your target audience, launch targeted advertising and develop your business.

Do not forget to get back to the target audience analysis occasionally, so that you have time to adapt to the changes and stay on the same wavelength with your customers.