When we work with clients on building their new website we always ask them to picture and then articulate their ideal client to us. On that note you may even like to see some of our latest websites here.
An ideal client may be as simple as people who are open to advice; it may be Mum and Dad investors or perhaps small business owners.
The fact is you probably have a reasonable idea, but let’s dig a little deeper to place some framework and science behind it. After-all you can’t type in to your CRM “Mum & Dad Investor” or even Facebook for that matter.
In this article we will:
• Revisit why identifying target market(s) is important
• Reconfirm the role that your target market plays in your overall marketing strategy.
• Consider your existing client base as this provides us with insight into your target market.
• Consider other factors that influence who should form your target market.
What are the benefits of our practice in being able to define our target market?
▪ Understand what drives your business
▪ Direct resources
▪ Reduce inefficiencies
▪ Understand growth opportunities and threats
▪ Better satisfy the needs of clients
▪ Ensure advice and service offers in sync with client needs
▪ Determines what your CVP(s) looks like
▪ Directs your brand
They will also determine your tactical approach when developing your
▪ Retention strategies
▪ Activation Strategies
▪ Acquisition strategies.
That’s why we define our target market but what is it?
A target market is a group of clients selected to pursue, either with an individual marketing campaign or with the development of your overall business proposition.
So, what do you believe are the consequences for a financial planning business that does not have a clearly defined target market?
▪ They work harder, not smarter
▪ Waste valuable time & resources
▪ Fail to grow their business
▪ Can’t “walk away” from bad business
▪ Hit and miss marketing
So that’s what happens if you run a financial planning business without a clearly defined target market.
Profiling your target market is pivotal to creating marketing strategies and tactics that work.
Every other component of your marketing emanates from this point.
Your target market drives all decision-making – removing the guesswork and enabling you to focus your efforts on profitable business and say “No” to off-strategy business.
There are four commonly used criteria for defining a target market.
Let’s quickly review what we mean by each of these.
1. When we use geographic’s, we mean the location, size of the area.
2. When we use Demographics, we mean age, gender, income, affluence, family composition and size, occupation, and education of your customers.
3. When we use Psychographics, we mean personality, life-style, the rate of use, repetition of need, benefits sought, and loyalty characteristics of your customers.
4. When we use behaviours, we mean the needs they seek to fulfil, the level of knowledge, attitude, use or response to a product/product usage of your customers.
By segmenting the market as a whole we can find common attributes, and then group the total population according to these attributes. In turn, we can make decisions about which groups are most attractive to us and which group we are best able to help.
Defining the life stages
Analysing your ideal client by life stage groups highlight what your clients or prospects are probably going through and importantly what they most need from you regarding advice. By developing targeted propositions across the consumer lifecycle, you will be able to appeal to the emotive needs of each of your clients.
You will need to build your processes to take the required actions to be responsive at moments of customer need.
We are now going to focus in on our Top 10 clients.
Generally, your top 10 clients can be defined as those providing the highest returns to the practice as defined by revenue, those with whom you already have a strong relationship and who have benefited from your advice. A detailed profile of these clients should influence your chosen target markets and align with your overall strategic direction.
The type of advice you are qualified to provide will also have a significant bearing on the type of clients you target.
The purpose of what we have undertaken so far is to bring to the forefront of our mind an accurate picture of whom we are currently working with and who contributes most to our business profitability. Importantly, we have also considered our practice capability – the objective elements of our internal attributes.
With all this background, we are now in a position to pull it all together.
At this stage, you may want to focus on just one target market, to familiarise yourself with the process.
Firstly consider which life-stage your target market may suit.
In doing this, don’t forget to consider the following:
• Characteristics of your most profitable clients.
• Clients you are best suited to service, and you enjoy working with.
• Clients who best fit your practice capabilities, your business vision, mission, and brand promise
• Clients who are willing to pay for your services.
Next, let’s consider some of the categories for profiling a target market.
Geographics: Can you draw any common conclusion about the geographic of your target market, i.e., the location, size of the area?
Demographics: What other demographic information we can use to create a profile of your target market, eg, gender, income, affluence, family composition and size, occupation, and education of your customers.
Psychographics: The general personality, behaviour, life-style, rate of use, repetition of need, benefits sought, and loyalty characteristics of your customers. Are you able to draw any common conclusions?
Behaviours: The needs they seek to fulfil, the level of knowledge, attitude, use or response to a product of your customers?
Other categories to include:
• Lifestage (generational segment – i.e., babyboomer)
• Common life events
• Advice needs
• Common life triggers
• Indicative solutions
• Customer service needs (touch)
• Emotional needs
• Advice capability
• Practice culture/style
• Centers of influence
• Relationship building ideas
• Hooks that could be used to promote/stimulate a need and their interests
Are there any surprises?
How closely does the picture you have created here, match the picture I asked you to construct at the beginning of this article?
As a client-focused business, you are now in a position to develop/review the components of your business to match your identified Target Markets.
These components will include your Brand, Client Value Proposition, Advice and Service Offers, and your tactical marketing activity. Each component must address the needs of each.
By doing this, your business will be attractive to these client segments and ensure its future growth.
Another important consideration when defining your target markets is the makeup of your client base. By this I mean, we all likely have a mixture of ‘ideal’ clients and clients they prefer not to deal with.
Now I will leave you with this quote.
“Small businesses that identify the needs of specific target markets—existing and potential customers who are the focus of marketing efforts—and work to satisfy those needs, are more effective marketers.”
Gloria Green and Jeffrey Williams in Marketing: Mastering Your Small Business.
Creating marketing marketing segments is easy with Feedsy and even easier to create email campaigns to your ideal clients. Marketing is fun and very powerful when you have the right support around you.