Know Your Target Market

One of the first lessons in any introductory marketing class or book is “identify your target market.”  While this may sound elementary, it is critical to the success of any business.  By understanding exactly who you are trying to target, your marketing efforts will become exponentially more effective.     

When I ask advisors to define their target clients, I usually get an answer like, “I work with anyone in San Diego County who has at least $250,000 in investable assets.”  That’s an ambitious target, which may be achievable if you have a large marketing budget, but it is unrealistic for many firms.  Most advisors don’t have the time, money or desire to embark on such a lofty marketing mission.

There is a way for all advisors to market effectively without spending a lot of time and money and that’s by focusing on a specific target market.  I am currently working with an advisor who only markets to people over 50 years old in a specific affluent neighborhood.  This is a brilliant strategy! There are approximately 3,000 people in his target market.  For very little money, he can send direct mail to the same group of people each month.  In addition, he can reach his targets using other mediums such as advertising in the community newspaper and writing articles for that same periodical.  There is a general rule that says you have to “touch” a prospect at least 7 times before he or she responds to marketing.  By focusing on one specific market, this advisor will reach the “7 touches” goal much quicker than by thinly spreading his marketing efforts among several markets.  This same strategy can work for you too.  

Define Your Market 

If you are thinking about implementing new marketing campaigns, you should start by defining your target market.  Your definition should be very specific in order to achieve the most impact from your marketing efforts.  I would choose two or three characteristics to define your market.   For example, you could define your market as small business owners in North County who are at least 50 years old. Think about how a definition as simple as that could help direct your marketing strategy.  Below are some other areas to consider when defining your target market.

Market Segment	Examples
Geographic Location	North County; La Jolla; Downtown
Milestone Events or Money in Transition	Divorce; Death of a spouse; Inheritance; Retirement; Sale of a business
Profession	Doctors; Military; Teachers; Contractors; Small business owners; Self-employed professionals
Employer	Qualcomm; SAIC; San Diego State employees
Age	30s and 40s; 50 – 65; 65+
Hobbies/Associations	Rotary Club Members; Golfers
Net Worth or Income	$1 million – $5 million net worth; $100,000+ income
Family Profile	Traditional families; Blended families; Homosexual couples; Single parents

This is just a partial list of characteristics to consider.  If you are having a difficult time defining your market, start by listing out the characteristics of the existing clients with whom you like to work.  This will give you a good idea of who you should be targeting. 

Benefits of a Narrowly Defined Target Market

You will find that there are many benefits of defining your target demographic for yourself, your employees, your clients and the community including:

·    Reduced marketing costs
·    More qualified prospects
·    Increased credibility as an expert in your field
·    Better results from campaigns
·    Increased referrals
·    Clearer value proposition to prospects

By taking a few minutes to identify key characteristics of the clients you want to serve, you will save yourself from wasting time and money on ineffective marketing campaigns.  Remember, if you are marketing to just anybody, just anybody is who you will get.  Be smarter than your competition.  Only market to those people who you really want as clients.   

Check back here next Monday for a new marketing tip or visit www.kristenluke.com for more information.