Monetize Yourself

If you’ve been following along at home, you now know why you want a target market and how to select a target market segment. The next step is to get acquainted with your target customers, as intimately as possible.

Things you might want to know

Where your customers hang out. Where they work. Where they live. How they get between those places. How much time they spend at each of them. How much time they spend between them. Who they hang out with at each location.
That way, you can be in those places too, or put ads there, or make sure that your product is in those locations

What a typical day looks like to your customers: when they get up; what they eat for breakfast, lunch dinner; how they spend their mornings, afternoons, evenings; when they eat; when they go to bed.
That gives you an idea of what other products they might buy (for cross-promotions) and of when would be the best time to communicate your message, and how much time they have available to use your product, and how much time they have available to shop for your product, and what other features they might want with your product.

What matters to your customers: what causes do they support? What changes would they most like to see in the world? What church do they go to? Which politicians and which ballot issues did they vote for? Against? Where do they volunteer? To which charities do they send their money?
That allows you to connect with your customers and to let them know that you understand and value them. If your product ties in with these beliefs, it gives them a reason to buy from you. If nothing else, it can prevent your accidentally offending potential customers.

What your customers like: Where do they spend their discretionary income? Who are their friends? What do they talk about when hanging out with friends? What are their favorite TV shows, books, magazines, sports, colors, toys?
That allows you to design a product that your customers like and to advertise or communicate in channels they’re likely to see, and to craft your message in a way that they’ll like.

Your customers’ relationships: What’s their relationship status? How many close friends do they have? How many ‘weak ties’ do they have? Do they have a large or small immediate family? What is their place within it? Do they have a large or small extended family? What’s their definition of family? Do they value family? Do they value relationships? Are they introverted or extroverted?

Your customers’ financial situation: Do they work fo rmoney? What kind of work do they do? Do they like their jobs? How much money do they have? How much of that is discretionary? Do they consider your product a want or a need? Do they have the same amount of money each month, or does it vary? Are they savers or spenders? How do they feel about money?

Things you might not care about

Some of those things may matter to you. Some may not.

There’s a large range of “mattering”, based on your business and your customers: a restaurant cares very much what their customers eat for breakfast; a gym doesn’t care quites as much, but it’s likely to be fairly consistent from customer to customer; a lawyer can use it to select appropriate gifts for clients, but is in no way hampered by not knowing; and I don’t care in the slightest what you had for breakfast.

Some factors will be consistent form customer to customer: I can fairly safely assume that you are in some way dissatisfied with your current financial situation, and are looking for options for changing it.

Some factors will vary from customer to customer. I might like to know your age, but the fact is that I have readers in high school and readers who are getting social security checks, so age is not a factor I can use to better understand my clients.

Some factors you may choose not to use: most of my current readers are white, middle-class, and live in the US, but I try not to let it affect my writing, in hopes that this blog will be helpful to a wide variety of readers.

The goal is to know your target market

The goal is to understand your customers better, so that you can serve them better. In the end, that’s the standard you have to use.

Will knowing this distract you from the stuff you should be focusing on? Then ignore it.

Will knowing this help you understand your customers better? Then make the effort to find out.

Resources for Further Reading
Aricia LaFrance specializes in exactly what I’ve been talking about: getting to know what kind of customer you want, and learning all about them so that you can attract them to your business. If you’re having trouble identifying your ideal clients, or figuring out how to get them, she can help.

Character Creation Form and Character Bio Questionairre are intended to help writers get a clear picture of their characters, but the same questions can help you get a clear picture of your clients.

In an ideal world, you would be able to make your product so that every single customer would get exactly what they want. But making a whole different product for every single customer is expensive, and except for a few high-end clients, it’s not profitable. (Although it’s getting cheaper with the advent of computers to assist in design, manufacturing, and delivery, so that more and more businesses are getting more and more customized.)

So, if you can’t make a unique product for every single client, the next best thing is to find a group of clients whose needs and wants are close enough that they’ll all be pretty happy with the same product. This mostly-wants-the-same-thing group is called a market segment

Finding a market segment

There’s a lot of theory that goes into this, and it’s possible that big corporations actually do this with math and science. But that’s probably not an option for you (if you have thousands of dollars to fund a research study, your business is doing well enough without my help). So you’re going to use a more qualitative, story-based segmentation approach.

Who might want your stuff?

What customers do you have already, or might have? List all the reasons you can think of that someone might come to you for help.

How could they be segmented?

Are there any trends among your customers? Do you have two or more client groups? Would different products/packages/services/options suit these two groups better than trying to give them all the same thing?

Example 1: Food
Here in Colorado, there are several segments that are easy to pick out:

• We have the spicier-is-better crowd, who are happy as long as the food they get is no blander than a jalapeno.
• We have the health-nut crowd, which could be further segmented into the vegetarian crowd, the vegan crowd, the gluten-free crowd, and the raw-foods crowd.
• We have the DIAK (Double Income And Kids) crowd, where both parents are tired after a long day at work, and neither feels like cooking.
• etc

You don’t necessarily have to select only one of these segments to target (although you could), but you definitely want to have multiple products, to serve each segment. So a restaurant that focused on chili would want to have a smokin’ hot chili, a vegetarian chili, a chili that’s certified gluten-free, and a chili that’s hardly more than tomato soup (for picky kids).

Example 2: Financial Advice
Although the fundamentals of financial advice are the same for everyone, the application of it varies from market to market, and most especially based on the life stage of the customer. Kids in middle or high school have few expenses, and are concerned primarily with income generation and with saving. Depending on the parents, this stage may continue into college, or they may begin worrying about budgeting in order to maintain positive cashflow. If the client is out of college and didn’t get the assistance with saving and budgeting, they may now want advice on paying of credit cards and student loans; those who are debt-free are likely now interested in advice on saving towards big goals like a car, a house, or retirement. Those with more income and less time ’til retirement are most interested in how best to invest their extra cashflow, and the details of IRAs, 401ks, Mutual Funds and Bonds.

Each segment has different needs, and wants different products, but the needs of recent college grads will be similar enough that the same advice will help everyone in that segment

What groups do they divide into, and how would you describe them?

What does each group need?

For each segment you listed, describe their needs with relation to your product. What’s their biggest concern? What’s the most important feature to them? What would an ideal product look like?

Which groups will you serve?

Look at the groups, and the sorts of products they want. Is there a set of segments that want similar products? Which ones would you be good at serving? Which ones would you enjoy serving? Select the target market(s) on which you want to focus.

Summary and Action Steps

Segmentation is the process of finding groups of customers whose needs are similar enough that you can make them happy with the same products/services.

1. List all potential customers
2. Segment them into groups with similar needs
3. List needs, wants, and ideal products/services
4. Select segment(s) to target

Target Market is a technical term from marketing, but it means basically what you’d think: what is the group of people (the market) that you’re aiming at (targeting)?

But why should I have a target market at all? Shouldn’t I aim for as many customers as possible?

Basically, the short answer is that you can’t really do anything useful for the whole world; by selecting a smaller subset of potential customers, you can make something they actually want. But that’s easier to understand by looking at some examples….

Target Market’s Preferred Product

For ease of discussion, let’s say you make food. What kind of food should you make? Obviously, you should make the best you can, to make your customers as happy as possible. But how do you tell?

The problem is, there’s no widespread agreement on what constitutes the “best” sort of food. Even laying aside the fact that I love fried chicken while my partner is a vegetarian, there’s not even an agreement about general characteristics of food. Should it be hot or cold? (Depends on the season and where you live.) Should it be high-quality organic ingredients, or processed and preserved? (Depends on how quickly it will be eaten, and whether the purchaser is a health nut.) Should it be mostly carbohydrates, or should it emphasize protein? (Depends on the diet and metabolism of the customer.)

There’s no way you can make everybody happy: what my father-in-law thinks is pleasantly spicy, I think is inedible; what I think is tasty he thinks is bland. If you make something yuppies like, college students can’t afford it; if you please the college students, higher-income diners will think the quality is too low.

And if you try, you’ll just make everyone unhappy.

Case study: Why buy a Compaq?
For a while, in the personal computer market, there was no reason in the world you would buy a Compaq. They were cheaper than Sony… but if you cared about getting it cheap, you’d buy Dell. They were higher quality than Dell, but if you cared about high quality, you’d buy Sony. They were more reliable than Asus, but if you cared about reliability you’d buy IBM.

There was NO characteristic of computers that Compaq was best at. They were a middle-of-the-road machine on every conceivable test.

Customers don’t want average. They want the best… by whatever definition of “best” they have in mind.

No target market? No clear answer. But if you pick a target market, you can make a product that makes those people happy.

Target Market’s Preferred Place

How are you going to get your food in the same place as your customers? Will you deliver it to them? Will they come to your restaurant to eat it? Will you meet in the middle, at a grocery store?

Well, people who are busy tonight will want it delivered, no question. But other people don’t want to pay the extra to get it delivered (in higher prices, or tipping the driver, or both); they’d prefer to go get it. But some of them will prefer to pick it up and take it home, while others would rather eat at your restaurant. But all of those options are more expensive than buying it at the store and cooking at home, so some people would rather you sell it to the grocery.

No target market = confusing muddle. Pick a target market, and you and easily determine how they want to get their food.

Target Market’s Preferred Promotions

How will your customers find out about your food? Will you advertise on TV? In magazines? Will you have a website? How about this new social media thing? Or maybe you should have one of those dancing sign-flippers out on the street corner? Or maybe you don’t need to advertise at all — word of mouth will be sufficient.

Depends on who your customer is. Some groups spread news of new products quickly and reliably — but if you’re targeting introverts, you’d best not rely on word of mouth. TV and newspapers will get some people, but Americans under 35 watch Hulu and YouTube and get their news from Twitter and Google — they’d miss your ads entirely. Social media will hit that crowd, but will miss a good portion of their parents. And can you afford to have TV ads and newspaper ads and radio ads and still have someone monitoring your blog and your Twitter feed and your Facebook fan page? Search Engine Optimization doesn’t come cheap.

Trying to reach everyone is an easy way to waste a lot of money. Trying to reach a particular subset of people is much cheaper, much easier, and (given the above considerations of product and place) much more effective.

Summary and Action Steps

Your business can’t make everyone happy, and trying to pretend that you can will only lead to frustration… for everyone involved. Make yourself and your customers happy, and pick a target market.

Who most needs your product?
Who most knows that they need your product?
Who most commonly buys your product?
What do they do? Like? Buy? Talk about?