One of the foundational principles of communication is to know your audience, and we all know it is impossible to know everybody. This makes the implementation of target marketing a necessity for every business. Narrowly targeting a specific group of people is beneficial in two main ways.
First, it is much easier to make your message relevant to a group of people the smaller that group of people is. There isn’t much in common between an 18 year old male and a 54 year old female. Creating an advertisement that would appeal to them both would be a futile effort. Even choosing which product/service benefit to highlight would be difficult, let alone finding a way to communicate that benefit in a way that would be relevant to both. Using car buying as an example, most young consumers are drawn to the benefits of style and monthly payment price while the majority of mature consumers are interested in benefits related to the buying experience/customer service, safety, and overall cost of owning the car (fuel mileage, maintenance costs, etc). The Big Lot at Reliable Chevrolet and Thompson Sales Co. are two local car dealerships who have varied their brand position and advertising message based on the target audience they are trying to reach. This affects everything from the age and training of their staff to inventory decisions and the type of music played in their radio ads.
Second, targeting eliminates wasteful spending. It is more efficient and inexpensive to identify potential customers and communicate directly with them rather than attempt to reach everybody and convert only a small percentage into buyers. While, this sounds much easier said than done, there are a few things you can begin doing right now that will help you target a more narrow audience. Doing so will increase your effectiveness while decreasing wasteful advertising spending.
When it comes to knowing your target audience, research is what removes the blindfold. Through research, it is possible to understand potential consumers in a way that allows you to offer the products/services they find valuable and communicate that value in a way they will pay attention to. Target audience research is divided into four main categories: demographics, geodemographics, psychographics, and behaviorgraphics.
Demographics are consumer characteristics such as age, gender, income, and ethnicity. Generally this type of information is relatively inexpensive and easy to obtain, but is also rather useless in understanding what motivates buying behavior. However, when coupled with the other consumer characteristics listed below its value increases.
Geodemographics is demographic data clustered based on geography. This can be done from a national level all the way down to subdivision or street. This research type is great for local businesses who know the radius around their location from which they pull customers. Walgreen’s is a good example of a company who uses geodemographics to help determine new retail locations. They want to be on the corner of an intersection on the right hand side of the road on the way home from work. This requires that they know where their customers both live and work. Pairing that information with age and income information allows them to choose locations that optimize store traffic among the demographic segments most likely to utilize their offerings.
Psychographics are the underlying attitudes, values, and motivations of people regarding your particular product or service category. It is easy to see why this type of data is significantly harder to obtain. Even when given the opportunity to ask people what they value or what motivates them to buy certain things, it is often difficult to get meaningful answers. However, the outcome is worth the effort as this type of data gives insight into consumers’ decision making that sometimes they aren’t even fully aware of.
Behaviorgraphics describe how people behave in particular product categories. We assume that the best predictor of future behavior is past behavior. Therefore, creating and maintaining a detailed data base of consumers and their purchases is vital.
Doing market research doesn’t have to be expensive; it just needs to be done thoroughly and creatively. Begin by compiling your own records into a database organized around the categories mentioned above. Acquire and record as much information about your consumers as possible and keep it current. This will allow you to look for patterns to help identify which demographic segments are your most valuable. Furthermore, be sure to use Google Analytics on your company website to glean information about online behavior. This information can help you determine the most important words to pay for in search engine results and which pages visitors spend the most time browsing.
Additionally, use social media to learn about your consumers’ psychographics and behaviorgraphics outside of their interaction with your business. Don’t just have consumers like your Facebook page or follow you on Twitter, but friend some of them and follow them on Twitter to find out more about them as a person, not just a consumer. This information will help you better determine their values, lifestyle, and motivations. Lastly, utilize the vast amount of information made available by the government. Public records, census data, and other research is widely disseminated through a number of websites, and can be especially useful when combined with the other information sources discussed here.
This article appeared in the November 15, 2014 issue of the Springfield News-Leader. It is available online here.
Amy Stokes, Ph.D., is an assistant professor of marketing at Missouri State University and has experience as a media coordinator in private industry. Stokes has a specialty in advertising and media issues and writes about those areas as well as general consumer behavior. Email: email@example.com.