Prioritize and Target Customers
At this point you should know your competitors quite well. You have learned how they serve their customers and gleaned what you can about what the customers need.
Now it’s time to target your customers. Targeting your customer means deciding which market segment or segments to prioritize in order to focus your researching, selling, and marketing efforts.
Criteria for targeting:
- How attractive is the segment in terms of size and growth rate and potential sales?
- How many competitors are serving the segment?
- Is there a threat of substitutes?
- What is the bargaining power of the buyers and suppliers?
- Is the segment a fit for you in terms of your business resources, capabilities, skills and competitive advantage?
At this stage in my own research process, I found that I was using many different terms or labels to describe my potential customers. I recognized that I must somehow move away from the huge (albeit enticing) group described as “12% of the labor force in 40 countries,” toward smaller, more definable, more reachable and manageable customer groups.
After some vigorous digging at the Statistics Canada and US Census websites, I developed the following table, which contains a more targeted definition of the customers for Macrolink Action Plans Inc.
View the Example: Description of Customers
Action
This step is to gather information for research purposes. If you set up folders in Step 4, we suggest creating a subfolder in the “Business Plan” folder, called “Worksheets” and saving the following worksheet with the file name target_market_priorities_year_month_day
Download the Target Market Priority Worksheet
- Identify and prioritize your most important target markets or customer groups.