Why target? I want it all!
It is imperative that any new business find and determine who their target market is.
This is for a number of important reasons. In the beginning, a startup doesn’t have…
- The money
- The time
- The credibility
- The competitive strength
… to sell to the entire market right away.
This is why it is so very important to determine a “starter market“.
The term starter market is used to refer to the initial target market for a new business. This will be the initial target market the startup will focus on in the beginning.
The Triple-A approach
When determining who the starter market is it is important to understand that there can not just be one criterion. There are always multiple elements that must be taken into account. This is why the Triple-A method is recommended. Is the target market selected:
If a market hits all three, then the startup has its first target market.
When determining whether a potential target market is attractive to the startup’s venture it must pass two tests:
- The number test – Are there enough members of the potential target market with the money to buy what the startup is selling at the price they need to sell it for?
- The price test – Can the market afford to buy what the business is thinking of selling at the price it needs to sell it?
When determining the accessibility of a potential target market two questions must be asked.
- Can the potential target market be reached affordably or will it take too much work and time/money to educate or prepare the potential market so they see the value in what is being sold?
- Do you have access to the market at all? Is the startup able to get past the gatekeepers to talk to those who make the decisions?
Is the product or service of interest to the potential target market at all?
Is the new business trying to sell something that the potential target market doesn’t want?
It may seem like a good idea at the time. Often times those involved in the idea are too close, it is hard to remain objective.
Use the Triple-A to select the market
Target marketing comes down to answering three questions:
- Is the potential target market ACHIEVABLE?
- Is the potential target market ATTRACTIVE?
- Is the potential target market ACCESSIBLE?
A potential target market that answers “yes” to all three should seriously be considered as a target market.
In one of our latest guides, we looked at how to create a one-paragraph description of a target market called “building a customer avatar“, to help research and give a mental picture of the market you can focus on.
If you have any questions for our writers, marketing team or web designers please feel free reach out anytime.