Understanding your Customer

Your business may offer products or services with mass appeal, but not everyone will want or need your product. As a business owner, it's your job to find the people who not only want or need your products or services, but also are willing and able to buy them.

A target market is a group of people who are the most likely buyers of our product or service.

But, hey, it is definitely not everyone!

Let us look at the three areas that most entrepreneurs usually confuse with target market.

 Total Addressable Market (TAM), also called total available market, refers to the total revenue/business opportunity available for a product or service.

 The inclusion of constraints such as current or potential competition and distribution challenges then modifies the strategy to frame it with realistic boundaries, reducing the market down to the available market (AM), also called serviceable addressable market.

 Target market focuses on who actually are the most likely to buy your service or product within the available market, considering personal, internal and external factors.

The target market typically consists of consumers who exhibit similar characteristics (such as age, location, income or lifestyle) and are considered most likely to buy a business's market offerings or are likely to be the most profitable segments for the business to service.

To properly segment, you will typically ask the following:

 How old is your ideal customer?

 How much money do they make?

 Is your product or service most suitable for men, women or children?

 Are they homeowners?

 Where does your target market shop?

 Where do they live?

 What type of education do they have?

 What problems, needs, or wants do they have that your product or service will fill?

After taking a critical assessment of your target market, summarize in a clear target statement

Let’s look at Zipcar:

Zipcar’s Target Statement - “To urban-dwelling, educated, techno-savvy consumers who worry about the environment that future generations will inherit, Zipcar is the car-sharing service that lets you save money and reduce your carbon footprint, making you feel you’ve made a smart, responsible choice that demonstrates your commitment to protecting the environment.”

 live in an urban area

 have a certain degree of education

 are comfortable will technology

 are concerned about the environment

Target market has to be very specific. This has an impact on your branding, marketing, business plan, business model canvas, etc.

Do you want to take a deep dive into knowing and understanding the behavior of your customer, well reach out to me directly on instagram @ezinnenwokafor or send me a direct email - ezinne.nwokafor@gmail.com and we will take it from there. See you at the top.