How to Narrow Your Target Market

Companies that try to be all things to all customers are sure to fail. Here's a business guide on how to focus on your target market.

Huge, profitable companies like Walmart and Amazon didn't start as the all-encompassing retailers we know today. Each debuted with a very specific focus that helped them find and nurture a strong customer base. Walmart originally catered to shoppers in rural areas where there was a dearth of options for low-cost goods; Amazon famously limited itself to just books for years before expanding into selling everything from DVDs to motorcycle gear.

The process of finding a target market and narrowing your company's focus to appeal to it directly often trips up new businesses, who find it difficult to turn down business opportunities when they arise. But trying to be all things to all people is a sure way to fail in the marketplace.

The Dangers of Being Unfocused

Whatever market you're in, you've likely got a lot of competition and static standing between you and the consumer. Narrowing your focus to one specific demographic or slice of the marketplace gives potential customers a reason to notice you in the rest of the fray.

If you don't know specifically which customers you are speaking to, you are actually speaking to no one.

The big danger is that without a target market, it's like standing in a park shouting in the wind. When you have a target market, its like standing in a park and talking to a specific group of people.

That means you can't be afraid to exclude certain types of consumer from your marketing or to target your advertising at small groups. Some customers will feel left out, but those are the sacrifices necessary for a successful business.

Become an Expert in one Area

One way to hone in on a specific sector is to become an established resource in one area. Starbucks, for example, is able to charge premium prices for its coffee even though it also sells pastries, tea, and accessories, because it has positioned the company as an authority on good coffee.

If you're an expert in your field, people will pay the price tag on whatever product and service you offer

You can build up credibility by offering information for free through your company's website or blog: things like tips, industry information, or niche data that will help consumers think of you as a reliable expert in that area, she says.

Your credibility comes with giving away information. If this is the value I'm getting for free, what will I get if I pay for it?

Dig Deeper: Do the Market Research

Experts give several methods for whittling down the vast expanse of the market to find your ideal target.

Some business owners find their niche first by focusing on the areas in which they already have a strong interest, or by looking at markets that already know about you and your services. Then, look for areas of the marketplace where a gaping need exists that you can fill with your company's services.

Tweak your Marketing

As simple as it sounds, the name of your company is crucial when narrowing your market.

You may have to change your branding strategy or marketing efforts to clarify your mission. Once you find your target, you'll definitely want to alter your advertising efforts to go after the places and media you use to generate new business.

It's not just an advertisement that you do. It actually has to become part of everything you do.

Your marketing needs to highlight the specialization, which improves credibility. You've got to be perceived as the best at something.

Then, once you've identified that base, use it to improve the business through things like social media and interactive marketing to find out more about what the customers are looking for.