Welcome to the third (and final) installation of my blog posts praising the value of secondary market research. I hope that three posts in a row helps to instill in you some fraction of the exultant enthusiasm I have for using online research to guide my decision making! Those of you who have seen me speak or teach know that “Market Research” is my answer to just about anything to do with growing your business!
Today I want to talk about the importance of understanding your target market in order to create a successful marketing campaign.
How do you figure out who your target market is if you are just starting your business? (Say it with me now) Market Research!
What about those of you with an existing business who want to grow it beyond the existing base of customers? How do you begin to look for new customer types? I bet you can guess my answer here as well!
How about I explain this further with a couple stories?
Story #1: A Tale of Two Foodies
A while back, I worked with a dairy farm in rural Wisconsin who decided to protect against the constantly shifting dairy market by adding beef cattle to their farm. And rather than try to sell to distributors or restaurants, they decided to sell their high-quality product to consumers online and through local farmers’ markets.
They had already worked through the hurdles of how to process the meat, freeze the meat, and transport the meat. And they had consulted a marketing firm to help promote the business. The marketing firm asked me to help research some ideal customer types to be able to better focus the marketing messaging and determine the price point.
And here is what my market research told me:
- The main customer of grass-fed beef is the “urban millennial” with an income of over $100,000.
- Another customer segment are mothers that value eco-friendly products, and quality over price.
- Key selling points to customers include health benefits, supporting the local economy, protecting natural resources and smaller farms that are more humane and better for the environment.
- Prices must be high in order to indicate a quality product.
- Smaller portions of meat are more popular.
Some sources for this secondary market research information included Progressive Grocer, interviews at the Meatcon Annual Convention, Cattle Network and the American Grassfed Association. This information, combined with US Census Bureau data, helped me create two target market personas for this client.
Persona #1: Chad
Chad is a software developer in his mid-20s making a good salary and living in downtown Madison in a chic condo that was converted from a warehouse. He grew up in the Midwest eating steaks on the grill and his mother’s hot dish. He drives a Prius but tries to bike to work when it’s not too snowy as it gives him more time to listen to his favorite podcasts. He’s been mostly eating out, but he bought a new grill to put on his little patio and wants to have friends over. He can’t cook much but he’s pretty sure he can manage to grill some nice filets. He is looking for a box of high-quality small cuts of beef from a local farmer. He wants to know that the cows were treated humanely during their life and that he isn’t adding to the carbon footprint when he makes the purchase.
Persona #2: Cathy
Cathy is a busy mother of two school aged kids living just outside of Madison. When she’s not working, she’s running her kids to soccer practice, band lessons, birthday parties, and so forth. She drives a Subaru station wagon and likes to listen to NPR in the car. She wants to be sure her kids eat healthy and nutritious meals but doesn’t have a lot of time for cooking. She is looking for a box filled with lean ground beef for burgers and tacos, and roasts that she can stick in the slow cooker before work. She wants to support local businesses and prefers to purchase all of her food from local farmers and stores and avoid the big box stores.
Both of these personas are in line with the market research about who buys high quality beef boxes. And once we define them, we can determine how many Chads and Cathys are out there in the geographic area the farm is serving. And, we can figure out how to reach them based on the personas because we have a sense of where they get their information, what they value and what they want to buy.
Story #2: David vs Goliath
Another client I worked with owns a software development company and had developed a sports team management website to manage teams, leagues, events, clubs, registrations, etc. He was looking for ways to grow his business to create recurring subscription revenue that would require little of his time after the initial subscription.
However, his business is one of many smaller companies competing against some giants in this field. How could I help him stand out amid the biggest competitors? Market research of course!
Here are some things I learned through my research:
- The biggest competitors are mainly focused on youth sports, big cities, and a couple key sports like basketball, baseball and football.
- Reviews of the different competitors by their customers indicated that there was frustration in the lack of customization available, especially for sports that don’t use the default sports terminology available.
- According to the American Nightlife Association, a significant percentage of bars and taverns offer league play such as sand volleyball, pool, darts or kickball.
- The Midwestern Unconventional Sports Association has over 300 teams playing coed adult kickball and using outdated software to schedule matches.
Based on this information, the developer decided that rather than try to compete directly against the big companies for youth sports like basketball, he would focus on more unconventional sports and adult leagues that weren’t being addressed as well. Now he offers a highly customizable sports management website builder that he is selling to curling clubs, axe throwing bars, pickleball tournaments and skateboarding competitions.
Story #3: Your Story
Now think about how this information might apply to your own business.
How can you use some combination of online research and your own knowledge of your existing customer base to determine how you stand out from your competitors, and who your ideal customer is?
Can you describe your ideal customer(s)?
If you are selling to consumers, you might describe them by age, gender, education level, income, geographic location and then beliefs, interests and other more psychographic categories.
If you are selling to businesses, then look at the industry (maybe with a NAICS code), the size of the business, number of years in business, key decision makers, supply chain around that industry and the budget process.
The better you can describe your customer types with market research, the easier it will be to find ways to connect with them through your marketing plan.
Three cheers for secondary market research!