How Do You Define Your Audience?
Building and defining your target audience is an invaluable exercise which will help you create more effective marketing strategies and ultimately grow your business.
Before discussing the necessary steps, let's learn some marketing concepts that will assist us in better connecting with our audience.
Total Addressable Market (TAM)
Your TAM is the maximum market size for your product or service. Knowing your TAM helps you determine which advertising platforms to use to promote your products and services and what type of messaging and visuals will convince customers to take action.
Some of the areas that it helps in assessing as you enter a new market are:
- Market Sizing: It estimates the market's size concerning potential revenues so that you can set realistic revenue goals.
- Business Planning: TAM evaluates the opportunity and whether investment and resources are justified to enter or expand within a market.
- Investor Pitching: Investors would be attracted knowing that you know your TAM and how you plan to approach it.
Serviceable Addressable Market (SAM)
This marketing metric represents what your business can target and serve based on your present resources and strategy, and it is a direct subset of your TAM.
It has to be kept in mind that SAM is not static; it can evolve as your business grows and your capabilities expand. Some of the core principles that can help you identify the parameters here are:
- Market research and segmentation: Segment by demographics, behavior and needs.
- Customer persona development: Your customer's needs and characteristics.
- Tailored marketing strategies: Specific audiences require customized solutions.
Share of Market (SOM)
SOM is the percentage of the market share your business currently holds or aims to capture. It's a narrower focus within the TAM.
Defining Your Audience
Let's discover your target audience's essential elements using this step-by-step procedure.
- Market Research: Determine the age, gender, income level, education, location, and other demographic factors that describe your potential customer. Put yourself in their shoes and try envisioning their lifestyle, values, interests, hobbies, aspirations, and pain points.
- Persona Development: Create detailed customer personas and add fictional but data-based character traits representing your ideal customers.
- Competitive Analysis: Your competition probably has an idea of their audience; study them to discover how they're projecting themselves and who they are trying to connect with. You may find some gaps to exploit to your benefit.
- Key Performance Indicators (KPIs): Some common KPIs that help you measure engagement success are conversion rates, click-through rates, and sales data.
- Feedback: Keep gathering feedback from your audience and adapt your strategies as customers' needs change and markets take on new trends. Doing so will help you attract more customers who fit your target audience profile.
- Monitor and Iterate: Use analytics to measure how your target audience responds to your marketing efforts, and use this information to make informed iterative decisions about your marketing strategy.
Effective market research to identify your target audience is essential to help you build viable marketing strategies and grow your business. The above steps will guide you to develop your ideal customer persona, leading to your actual customers.
Livedocs can give you clear insights into your data and what is working. Try it out today.
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