How to choose the right target market for your service-based business

Want to know how to choose the right target market for your service-based business? Whilst there are thousands of target markets to serve, making the right decision will make the difference between building a successful or unsuccessful business. It will also save you a lot of pain by not having to being frustrated at your results and having to change your target market further down the line.

Keep on reading to find out how you choose the right target market by considering these three key things.

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Before I show you how to choose the right target market I thought it would be useful to explain why it is important to choose the right target market.

 

WHY IS IT IMPORTANT TO CHOOSE THE RIGHT TARGET MARKET FOR YOUR BUSINESS?

 

As a service-based business owner technically you could work with lots of different types of people and / or businesses. However, just because you can work with anyone doesn’t mean you should.

You might have heard people talk about the fact you should find a niche for your business and that “there are riches in the niches”. (This phrase only works for some people depending on how they pronounce niche). The fact is when you find your niche or define your target market your life will become easier and your business will grow faster.

When you know exactly who you are targeting for your business marketing your business because so much easier. If you look at the 4 P’s of the marketing mix can see why having a clear target market will make your life easier:

• Product – When you know exactly who you are selling to, you can ensure that your product or services are designed with them in mind and address their specific issues
• Price – You can set informed prices based on your target markets income and spending patterns.
• Place – You will know where you should be selling
• Promotion – You will know what marketing channels work best for your target market and be able to concentrate on just those channels

 

Hopefully, you can see WHY having a defined target market is key for your service-based business.

 

Essentially, choosing the right target market should help you grow a successful and profitable business. It should also reduce the time to takes for you to build your business to the level you desire.

 

In Oversubscribed (you can check out my review of the book here), Daniel Priestley shares this diagram

 

 

He is using it to demonstrate how to become oversubscribed, but I think it perfectly explains how to find your perfect target market.

 

 

I LOVE YOU AKA CHOOSE A TARGET MARKET THAT YOU ARE EXCITED TO WORK WITH

When you are choosing your target market it is essential that you are excited about the people you’ll be working with. I hope you are building a business because you love what you do and want to build a business that you enjoy working in. When it comes to enjoying what you do as a service-provider it comes down to two things: do the type of work that you love and work with people/businesses that you want to work with.

To put this into context I’ll use myself as an example. I’m a marketing strategist. I absolutely love marketing so if someone hires me I know I will love the work that I’m doing. However, I would love to do marketing for everyone. I have specifically decided to focus on solopreneurs and small business owners, who are also offering services. I’m excited to work with this market because I love working with people when I can see the direct correlation between growing their business and improving their life. Also, I’m a massive geek. I love working with smart people, who are sharing their knowledge with the world. Whilst I’m working with them I often get to learn something new for myself, whilst having stimulating conversations and knowing that I’m helping them to share their expertise with the world.

 

YOU LOVE ME AKA YOUR TARGET MARKET SHOULD WANT TO WORK WITH YOU

As I’ve discussed it is important that you want to work you’re your target market, but in order for it to be the right target market, they need to want to work with you too. This is going to be a mixture of them wanting to work with you personally and also that they see a value in the service that you are offering. As a service-based business owner, you might be offering a done-for-you service, but your target market doesn’t value that service. In this case, you are going to struggle to make sales. This means even if you want to work with them, they are not the right target market.

YOU HAVE MONEY AKA YOUR TARGET MARKET SHOULD BE ABLE TO AFFORD YOU

It doesn’t matter if you want to work with your target market and your target market wants to work with you if they don’t have the money to pay for you and your services.

This may seem obvious, but as I have learnt from experience it is easy to get focus on you both being a great match and thinking because people want to work with you they will find the money. Sometimes that simply isn’t the case.

When I first started my company I focused on supporting companies and individuals within the performing arts. This made sense as my professional experience had been predominately in the performing arts. I knew exactly how to help them and because I had worked for some big industry names potential clients trusted that I knew my stuff and wanted to work with me. However, they weren’t able to afford my rates. This was mainly driven by how much they were paid and the economic situation of the industry as a whole.

 

 

YOU NEED TO ANSWER YES TO ALL 3 FACTORS FOR YOUR TARGET MARKET TO TRULY BE THE RIGHT CHOICE FOR YOUR BUSINESS.

 

Hopefully, you can see why it is so important to ensure that your target market answers all three of the above factors. It may be tempting to be drawn into the fact that two factors are met and ignore the third.

 

YOU LOVE ME + YOU HAVE MONEY – This will result in you having a potentially successful and profitable business, but how long can you continue to happily work with people or business that you don’t love (or at least like). You are building a business on your own terms so that should include working with people you want to work with

 

YOU HAVE MONEY + I LOVE YOU – This is a trap I see many early entrepreneurs running after. They find what is classed as a profitable market that is filled with high net worth individuals or people with disposable income and expect the money to come rolling in. However, just because you love someone doesn’t mean they’ll return that love (true in real-life and business but that is a different story). In fact, the majority of “lucrative markets” will be filled with other business others who have the same idea as you, which means the target market will have a wide range of choices.

 

I LOVE YOU + YOU LOVE ME – As I mentioned earlier if you both want to work with each other it is easy to focus on that and think the money piece will sort itself out. You might end up sticking to your prices and getting very few clients or you lower your prices, which could end up with you being booked out, but also burned out, and even worse being booked out but still not hitting your revenue or profit target. For you to build a successful business people have to be willing to pay what you are charging.

 

THERE YOU HAVE IT! THE 3 ESSENTIALS THINGS TO CONSIDER WHEN CHOOSING THE RIGHT TARGET MARKET FOR YOUR SERVICE-BASED BUSINESS.

Choosing the right target market is just the beginning. As I mentioned at the beginning, having the right target market will make your life easier when it comes to marketing our business, and I’m here to make your marketing even easier!

As a marketing strategist, I love working out the most effective way for a business to get seen by people who want their service and have the money to buy their services.

If right now you are making up your marketing as you go along then you need a plan and I would love to help you get one in place. In fact, in just one day I will create an annual strategy for you and ensure you leave with a 90-day action plan.

You can find out more about my intensive strategy by clicking here.