How to find your target audience?
Finding, defining, and getting to know your target audience intimately well makes all the difference for startups. It can make all the difference in getting funded, profitability, and how smoothly and quickly your venture will grow and achieve its mission.
So, what’s involved in this process? Why is it so critical? How do you ace this foundational step in launching a startup?
What Is A Target Audience?
As a whole, your broad target audience is your potential customer base. This is likely a segment, just a percentage of a whole industry.
When Tesla released its first vehicle in 2008, the roadster, it certainly wasn’t for everyone. It wasn’t big and it wasn’t affordable. It wasn’t easy to buy.
Its target audience definitely wasn’t the whole automobile market. It was a tiny, tiny fraction of that. Of course, by 2019 that had changed a lot.
It became much easier to order one. There are certainly far more affordable models on the menu now. They offer a diverse range of vehicles from small coupes to SUVs to pickup trucks.
With charging stations in far more destinations their electric vehicles are far more usable and practical for a far greater percentage of the market.
So, you may differentiate between your expected target audience in five or 10 years down the road when you are reaching your fully realized vision, versus your immediate target audience. The small initial zoomed-in audience for your MVP, that you can most easily reach and service well.
Think big, but start small.
Learn how to find your target audience. Like Amazon became famous for books, but now outsells fashion retailers, is into groceries, and sells just about anything you could possibly want.
You may be a B2B or B2C startup. Both have target audiences. You may have a profile for your B2B customers, but in order to really make this work, you still need to know your target audience on an individual and human level.
Unless you are selling to autonomous robots and algorithms, then it is still humans which are going to be making the buying decision.
In fact, this process isn’t just about knowing your target audience on the consumer side. Ultimately you want to know your target audience for strategic business partners and investors as well.
For now, let’s focus on finding your target audience of consumers.
Why Is Target Audience So Important?
While companies in general are doing much better at trying to get to know their target audience, it is still one of the areas in which many startups and young businesses fail.
When they fail or come up short here, everything else inevitably fails. It is the very foundation, and you know what happens to buildings when the foundation is flawed.
In fact, all of the most common reasons that startups fail can be directly traced back to this one factor. So, in turn, it only makes sense that getting this right, and doing it well will greatly de-risk your venture and dramatically increase your odds of success, and the level of success that is possible.
According to CB Insights, the top reasons startups fail are:
- No market need for their product
- Running out of cash
- Not having the right team
- Poor products
- Business models
- Poor marketing
- Ignoring customers
- Poor product timing
- Lack of focus
When fundraising outlining your target audience is essential. Keep in mind that in fundraising storytelling is everything. In this regard for a winning pitch deck to help you here, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
Knowing The Problem
According to the same data from CB Insights, 42% of startups fail due to not having an audience for the product they created.
Knowing the problem is the number one factor for success or failure, and often for getting your startup funded.
You can’t really know your problem unless you know how to find your target audience. Unless you really know your target audience you cannot really understand the problem.
Mastering Product Market Fit
Knowing the root problem your target audience is suffering from is the most important thing in creating a startup. Though as you dig into this you will also discover how to best curate and design everything for your target audience.
This includes tailoring:
- Product design
- The shopping experience
- Customer care and after-sales
- Who you bring on to your team to make all of this happen the right way
You don’t have to guess anything of these things. You shouldn’t be. That is just gambling. There are more fun and less risky ways to gamble if that is what you want to do.
Though if you know how to find your target audience as well as you should, and really listen to them, they will tell you exactly what you need to do.
When you nail this product-market fit most other things can take care of themselves. Such as funding, revenue, cash flow, and profits.
It also lays the groundwork to be able to scale, and quickly.
Marketing will make or break your company. Until you find your target audience you simply cannot market effectively and efficiently.
You have to know who you are marketing to. Without that, you are just firing blind, like a blindfolded child trying to hit the pinata at a birthday party. It’s just not as funny when your life’s work and savings and reputation are on the line.
Finding and knowing your target market means knowing what type of marketing you should be doing, how to reach them and nurture them through the customer journey, and optimizing it for maximum performance and ROI.
The company in your space which is best at marketing and sells most profitably and efficiently is the player that will ultimately win.
Better performing marketing also directly impacts your unit economics. This dictates your profit margins, a financial cushion, and sustainability.
Ability To Differentiate
You are only going to be able to go big and stay there and gain the backers to help you if you are able to differentiate your business, and really have something unique that you excel at.
Knowing your target audience will help you find where you need to differentiate in order to win their business. You’ll learn what they need, why they ditch your competitors, and how to differentiate where it really matters to them.
At a minimum, this will help you stay focused on where you need to begin and stand out. Going back to the examples of Amazon and Tesla, it is unlikely they would exist today if they began trying to reach the whole retail or car market.
They never would have become famous for something or had enough uniqueness to get people to switch. You need this laser-sharp focus at the beginning. You can expand infinity later on.
Being Sure The Market Is Big Enough
Once you know how to find your target audience, that enables you to ensure the market is big enough. Big enough to become a real business. Big enough to meet your goals. Big enough to attract investors if you want them.
In addition to all of the mentioned above, you better your chances of funding if you have a well-researched, defined, and engaged target audience, and have compiled the data.
What You Want To Know About Your Target Audience
You first want to know how many customers are in your target audience. How much value that represents. Plus, how these numbers are trending, and how fast. This is the zoomed-out, general version.
Then you want to zoom in and get to know them deeply. Perhaps even better than they know themselves. This is where you will create customer avatars and ideal profiles.
This subject is a whole other article. In a nutshell, you want to learn and document everything you can about your target audience. Everything down to their daily screen time, favorite colors, what keeps them up at night, and what they secretly hope and dream about.
How To Find Your Target Audience
So, how do you go about finding and learning about your target audience?
Market Research Reports
A rough starting point is to begin checking out existing market research, third-party reports, and online data. This can give you some direction to explore and verify. Just make sure you validate it for yourself.
Fresh Custom Market Research
Whether it is DIY, hiring some short-term in-demand help, or leveraging your in-house team, conduct your own research. What can you glean from search engine analytics, social media data, and your network?
There are various ways to conduct fresh market research directly with your assumed audience online. Like sending polls and surveys via LinkedIn, other social networks, and via email.
If you can, in-person meetups, networking events, and similar venues can give you a chance to dig into this live in a professional or casual setting.
Having studied your targeted market, you must also learn how to show the target customers in a pitch deck when you start looking for funding. if you need more information on how to pull that off, check out this video I have put together.
Get Out & Talk To Your Target Audience
Probably the best method of all is to get out there, knock on doors, and talk directly to those who you assume is your target audience pool.
Ask questions, listen to them, verify the problem, define it in detail, and see what they are already searching and paying for in terms of relevant solutions.
Marketing & Sales Tests
Start marketing it. Your split tests and performance will help you hone in, work out how to find your target audience, and understand what clicks with them.
Most telling of all is running tests of sales. Likes, yeses, and nods or smiles really don’t count for anything. Not unless you are just running a popularity contest.
If this venture is going to be a business, then what matters is making real sales and bringing real dollars in. That’s the best test of being on the right track and nailing your target audience.
Start testing landing pages and ads. Test giving demos and pitches. More importantly, than the dollar amounts coming in, is that you are making real sales. It is resonating enough with your target audience that they will make the effort to buy.
Prove this, and raising funding, bringing in better talent, and securing partnerships will all be much easier.
For any entrepreneur, how to find your target audience is one of the most important things that you can do when evaluating a new startup opportunity. This is the very foundation and DNA of your venture. Everything else relies on it and will scale or fail based on it.
Understanding your target audience will make everything else easier. It will greatly de-risk the adventure ahead for you and anyone else you hope to bring along on that journey.
Check out what you should be looking to get out of this process, and how to begin finding your target audience. It will likely be a game-changer for whatever you have been trying to do up to this point. There more time you spend on this upfront the faster and more efficiently you can scale and reach your biggest goals and the vision you are embarking on making a reality.
You may find interesting as well our free library of business templates. There you will find every single template you will need when building and scaling your business completely for free. See it here.