If you fail to properly identify your target market, then none of your marketing will work, period. Not your ads, not your content, not your website, not your social media, nothing. It’ll all just fail miserably. And I don’t want that for you. This is why in this episode, I’m going to be breaking down exactly how to identify your target market and give you some real-life examples so you can use them as references in your business so you never make this mistake again.
All right, let’s talk about the ideal target market and specifically how to identify your ideal target market. Because if you get this piece wrong, then like I alluded to before, well, pretty much nothing else is going to work because this is the core, foundational, and key element that all of the rest of your marketing is built on. So it’s that important, which is why I’m glad you’re here. Now, watching this here. So allow me to break down the exact steps so you make sure that you always clearly identify and isolate and then attract and find them where they are, online and offline, so you can put your message directly in front of them in the clearest and concise and compelling way possible to get more leads and sales.
All right, so it all starts with step number one, which is having an ideal customer avatar. Now, if you’ve never heard of this before, what an ideal customer avatar is, is a kind of composite or a fictional representation or it could even be built off a real customer that you’ve had in the past. But essentially this person or this sort of fictional representation makes up your perfect and ideal customer. The kind of customers that you love doing business with. And the ones that love you back, the ones that pay you for the value you provide, they are not whiners, they don’t complain, and they don’t make your life miserable.
Essentially, you want more of these people. Well, to get more of these people, you first need to clearly articulate what all these people have in common. And I’m going to give you a few frameworks in just a minute, so stick with me. But essentially what we want to do is we want to build out three main core principles of your ideal customer avatar, including their demographic details like what is their age, gender, income, occupation, job title, and things like that. Their geographic details like what city or state or province or country or basically where they live and then their psychographic details like their attitudes, their interests, their beliefs, their organizations or affiliations, and maybe even their political or religious views.
All of these things sort of make up the head stuff of your ideal customers. You also really want to dive deep into what I call their miracles and their miseries. Their miracles are all of their wants and their dreams and their aspirations and their goals, and then their miseries are all their pains and their frustrations and their fears and their nightmares. All the things that keep them up laying awake at night when they can’t fall back asleep. The better that you understand them and can articulate their demographic, geographic, and psychographic details, the better that you really understand their miracles and their miseries and how all these play together.
Well, the better that you’re going to be able to form this ideal customer avatar, which is going to make all of the rest of the steps that much easier. Now, as I said before, there are some frameworks here that I want to share with you. So let’s dive into the first one now. Now the first way to identify an ideal target market that you want to go after is to look at a framework called the PvP Framework, which stands for Personal Fulfillment, Value to Market, and Profitability. So let me break down each one of those for you.
Now the first P is Personal Fulfillment and this is essentially just how much you enjoy working with this type of market. Do they share similar values? Do you enjoy helping them? Do they get value from you helping out? Do you have a good relationship?
Do you enjoy talking with them? Do you have shared interests? That type of thing? See, it’s probably no surprise that you’re going to be able to do a lot better and you’re going to be able to attract a lot higher quality customers and someone that you enjoy working with. If you enjoy working with them and you’ve got similar characteristics or commonalities or you’re able to empathize with them and really kind of get on the same page.
The next letter is V and this is all about the value to market or value to the marketplace is the product or the service or the offer that you’re putting out there of a high perceived value to the customer that you’re trying to serve. If you’ve got something that’s going to be valuable to a certain segment of people, you’re going to probably want to serve them rather than a different segment of people who may have no interest at all in what you’re trying to sell. A good example here and based just because I’ve got one on the wall would be say guitar strings. Now if you’re trying to sell guitar strings to me, I’m going to be interested and it’s going to provide a lot of value to me because I’m going to need them for my guitar. But if you try to sell them to some of my friends who don’t play guitar, there’s going to be pretty much no value at all.
Unless, of course, they’re nice and just want to buy me some strings. All right, moving right along to the third letter, which is P, and this is all about profitability. This one is kind of obvious and goes without saying, but hey, let’s say it anyways. Profitability is how profitable are these customers to your business. When you take a look at all the different available markets that you could pursue, some of which are going to be in a better position to spend a whole lot more money than other people, meaning you can probably provide a much higher quality service or product to them.
As a rough example, let’s just look at demographic details like the age range. Well, it’s probably not surprising that someone who’s, say, still in college or maybe who’s retired and trying to watch what they’ve trying to spend and trying to save and basically on two opposite ends of the spectrum, they might have less discretionary or disposable income than, say, someone right in the middle of the spectrum who’s in their prime working years and making income and acts out in the workforce. That doesn’t mean that you don’t go after students or retirees. It just means that of those subsets, if we’re looking at things strictly demographically, it’s pretty obvious to see which subset is going to have in general, more money to spend. All right, so that’s the PvP framework, and it’s very important to keep in mind.
And when you start to stack that on top of your ideal customer avatar framework, looking at demographic, geographic, and psychographic details, your target market starts to become crystallized and starts to become a whole lot easier to identify. So you can go out there and locate them later. But before we do that, there’s another framework that I want to share with you that can help add even more bang to your marketing buck, and that’s the Rfm framework. The Rfm framework basically looks at recency, frequency, and monetary, and it’s kind of similar, but it’s also kind of different. So let’s dive into it.
Now, basically what this framework helps you do is determine which subset or which cohort or which area of your market is going to be the most valuable to you moving forward. The R stands for Recency. Now, essentially, the more recently that someone has bought or done business with you or a competitor or any kind of similar product, well, the more valuable they’re going to be. After all, if they’ve just bought something, the odds of them buying something similar or in a similar market or whatever is a lot higher than someone who’s never bought it before or hasn’t bought it in months or even years. The next letter is F and it’s all about frequency.
If someone buys stuff a lot, it’s probably no surprise that they’re going to be a better customer who’s going to be more likely to buy a whole lot more. I don’t think there’s too much to say on that one. And then the M of course is monetary and this is very similar to the profitability that we talked about in the PvP framework. But the money is well, how much did they spend? And you can see if you’ve got a customer that’s recently bought, they buy frequently and they spend a large amount.
These are the kind of people you want to go after. All right, so now that I’ve broken down the frameworks for you, the next step is to go out there and try to find these people. How do you do that? How do you identify that ideal target market? Who’s going to love you and love what you do and pay you for the value you provide?
Well, if you’ve already got a business and you’ve got some sales under your belt, you’re in a great position here because the very first thing you’re going to want to do is to analyze your current customers. Essentially, we’re going to want to take a look at the 80-20 distribution or the predo principle and basically, we want to look for the top 20% of your customers which probably statistically speaking, are going to be responsible for around 80% of your revenue depending on your business. Well, when you analyze this top 20% of customers, you’re going to want to look for all of the frameworks that I just talked about. You’re going to want to look for similarities and commonalities in the demographic details and geographic and psychographic details. You’re going to want to look at personal fulfillment and value to the market and the profitability and of course, Rfm being the recency frequency and monetary.
And when you lay all these out and you look at that top 20% of customers, you should start to see some trends and some commonalities between your best customers. Once you do that, well, you pretty much have an ideal target market that you’ve identified and some relative sort of similar characteristics between them. So you can use this to go out and find more of them. Now, if you don’t have a business, or if you’re just launching a new product or a new service or a new offer, and you don’t have a proven track record of sales basically behind you, that you can mine for data. Well, you’re going to be in a bit of a different position, but still, all of the concepts I shared with you still apply.
The alternative, however, to mining the data that you already have is going out there and getting as much new data as possible. And this means talking to people. That’s it. You want to have a conversation, you want to learn about them, and you want to present your product or your service. You want to ask them questions.
You want to see what their pains are. You want to see what solutions they’re looking for. And you want to make sure that you’re designing your product and service more to fit the needs of an ideal customer avatar than the other way around. Let me elaborate on that in just a second. You see, one of the biggest mistakes you can make in business is to come up with a business or a product or a service first and then try to fit it into some area of the market and jam it in there.