MBA2512 How to Identify Your Target Market

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Hey, welcome Back to the $100 NBA Show. I'm your host Omar Zenholm, and in today's lesson you will learn about one of the most vital steps in building a successful business. Identifying your target market. Did you know that businesses that accurately identify their target market are 60% more likely to succeed? Understanding who your ideal customers are can make all the difference in not only in your overall business, but your marketing, your sales, the product that you're developing. Understanding who you're serving exactly is going to make your life a whole lot easier and increase your likelihood of success. By the way, that stat is by B2B International. You may want to check that out. They have a great article called the Importance of Market Segmentation. It was published in 2018. When Nicole and I started the Hundred Dollar MBA. Back in 2012, we made the big mistake of trying to target everybody. We casted our net really wide thinking, hey, I don't want to leave any customers behind. But then we realized we're not really talking to anybody when we're talking to everybody. It's really hard to resonate with anybody when you're trying to serve all these different segments of the market. I'm gonna give you some examples in today's episode, but my example is a real one and what we realized is that, no, we need to niche down. So we targeted people that are starting a business, people that are new to business the first couple years of business, and they want to be successful. Right. People are trying to get to the first million dollars. That's really our target market. Offering an alternative to MBAs out there in universities that cost a lot and takes a lot of time. This is a practical, real world, no fluff, education to help people start a business. The biggest takeaway from the story is do not talk to everybody, okay? You need to find which segment of your market, that target market that you want to go after. For example, if I'm a snowboarding instructor and I want to teach snowboarding, it's going to be very hard for me to talk to every segment of this market. It's better for me just to focus on people that are maybe beginners. First time on the mountain. How to enjoy your first day on a snowboard without falling on your butt and in the freezing cold and not enjoying yourself and, you know, really looking foolish in front of your friends. No, this is a really, really good market to start with because I'm really focusing on some specific pains rather than me trying to also address people that are maybe not their first time. They've gone snowboarding a couple times before, they're doing blue runs. Maybe the expert, the person that's doing like park jumps. I gotta address all these different markets and maybe, oh, what about skiing? No, this makes your life so much harder. Okay, we want to get specific. We want to find that market. Today's topic is identifying your target market. Right? Identifying your audience. These people already exist in the real world. You're just trying to find them. You're not creating something out of thin air. We want to serve real people in the real world with real needs. Okay, this is going to make it easier for you to sell products to real people rather than you just making up an idea and making up, hey, I'm serving these people. And do they exist in the real world world? You need to find out, Identify. So let's start with the first step, and that's identifying your product or service. Analyze what you offer. What problems does your product or service solve and what needs do they fulfill? This is really important. You really need to fully understand what pain people are going through so that you can press on that pain. There's a model in copywriting called pas P A S. P stands for pain, A stands for aggravating the pain, and S stands for solution. When you identify a pain people really understand. Oh, okay. This person is speaking my language. They understand me. They understand what I'm going through. When you aggravate the pain, you really show how important it is to find a solution. This is something that you're dealing with. And then the solution, of course, is, hey, I got something for you that's gonna help you get out of this pain. So your job is to find out, what pain are you sol with your product and service? Answer this question right now, even you know on your phone, or write down a piece of paper, and what needs do you fulfill with your product or service? When Nicole and I launched our program, the Hundred Dollar mba, we knew that people wanted to learn how to start a business, but they didn't necessarily want to go to business school and get a traditional MBA and pay tens of thousands of dollars, hundreds of thousands of dollars spend, you know, 12, 18, 24 months trying to get this MBA while working, while taking care of a family. It's just not practical, right? And at the end of the day, that MBA doesn't actually show them how to start a business. It just talks about business. Okay? So as you can see, I've identified some pains, and I really wanted to address these pains with my product or service, which is the 100 MBA. And it makes it easier for me to create this product because now I know what to solve. The next step, step two is to conduct some market research. You don't have to go so crazy about this. You don't have to spend days on end on this, but you want to do simple research. You could do some Google searches to find out how big is your market. So if you go back to the snowboarding instructor who's really targeting beginner snowboarders, people that are starting out for the first time. Find out how many people are actually trying snowboarding for the first time every single year. Don't be afraid to go out in the real world. If I was a snowboarding instructor and I was doing an online kind of program, and I wanted to find out about my niche market, the beginner snowboarder. I would go to a local ski resort. I would just go there and ask how many people are signing up for the first timer program? Just out of curiosity, how many? Each season, most people are happy to share the information, and you're just getting a little bit of a taste of, okay, that's one resort. How many resorts are across, you know, the country I'm living in, how about the world? And you can get some rough estimates, by the way, any data you get online, they're rough Estimates, and they're changing constantly, so. But it gives you an understanding of how big, how large that target market is, so you can understand how much of the addressable market you can serve. Step three, create customer Personas. You want to define the profiles of your ideal customers, the people that will absolutely love what you offer. This is not really about specific demographics, but you may want to get a general understanding of how old these people are, the split between men and female, educational level, income level. Also, just consider some of the psychographics like interests, values, lifestyle. Okay? When we started the 100 MBA, we created some Personas. We made up these Personas. They were called Newbie Nate and Startup Sarah. I remember Startup Sarah because she's always refer to her. You know, she was in a job, she had a degree in liberal arts. She graduated. She's in this office job for the last four years. She's invested four years already in this new career. But she wants to start a new business. But she doesn't know where to start and she doesn't know how much money she needs. And she doesn't have the money to go to school or have the time. She's, you know, trying to make ends meet, but at the same time, she's looking for a better life. Where did this story come from? It's something I made up, okay? It's something that I created based on the target audience I'm trying to go after. But it's good to have a visual, somebody to think about. When you're creating content, when you are marketing, when you're creating the product, what would Startup Sarah need? What would be a solution to her problems? Either create two Personas, man, woman, and allows me to kind of really get my head around who I'm serving. Step four is to analyze your competition. Now, a word of warning. A lot of new entrepreneurs, they spend a lot of time thinking, contemplating, researching their competition. This is a mistake, in my opinion. You want to spend some time understanding the field, the people that are competing with you. But you just need to find out two things. One, who are they targeting? Who are they going after? What segment of the market is like their bread and butter? And number two, what strategies are they using to reach this audience? Are they running Facebook ads? Are they doing billboards? Are they doing cold reach outreach? You know, are they emailing people with email marketing? Figure it out, right? Find out what they're doing, go through their funnels, all that kind of stuff. Go through their email sequences. The reason why you only have to do these two things is because you just need to understand what they're doing, who they're targeting, so you don't overlap. You want to live in a space and work in a space where you're not heavily competing with everybody. You want to be in a niche in a market. You want to target people that really are underserved. And this is going to allow you to really excel very quickly. Right? There's a great book called the Blue Ocean Strategy. We covered it in a previous episode and it's all about going to a blue ocean. Don't try to go somewhere that's so, so, so highly competitive. Okay? Now the reason why I say don't spend too much time looking at your competition is because you will become your competition. You'll start copying them, you'll start looking like them, you'll start talking like them. And that's a big no, no. You want to be your own business, your own brand o spend some time, understand your competition, who they're targeting, how they're targeting them, how they, what are the strategies they're using to get to them so that you can understand how you can get to your audience as well in that market. But the point here is, don't spend too much time focusing on your competition. Step five. Test and refine. You want to launch small scale marketing campaigns to test different segments of your target market. You want to analyze the results and adjust your strategies accordingly. For example, when we got started with our software company, Webinar Ninja, we ran targeted Facebook ads to different segments and we tracked the engagement and the conversion rates of these ads to figure out which audience really resonates with what we do. This helped us fine tune our target market. Understand this is what the market is telling us, right? You don't want to just do what you think is right. You want to see the reality of what's right. Step six. Continuously gather feedback. Engage with your audience. Anytime you get a new customer, reach out to them via email, through a survey, on a call, on a video call or zoom call. Go ahead and do that. Use that feedback you're learning from your customer to continue to refine your target market, your ads, your copy, your actual product or service. We did this constantly with Webinar Ninja, our software company. As soon as somebody became a customer, we wanted to learn everything about them, understand how they found out about us and why they interested in us and what their problems are and how we can solve them, all that kind of stuff. So the more intimate you are with your customers, the more you know your customers, the better you're gonna be able to serve them and people like them. Remember, a customer has just given you money. You want more people to give you money, so you want to find out as much as possible about them so you can find more people just like them.

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Let's recap the step. Step one. Understand your product or service. The problem you're solving. Okay, Very important. Step two, Market research. Understand your market, how big your market is. Is this market growing? Has it grown over time? The last few years? Get some data. Step three, create a couple of customer Personas. Just like startup Sarah and newbie Nate. Give them a backstory, like you're creating a story around these people and identify what the problems are, their pains, their dreams or hopes, what they're looking to do. What are some of the things that they can offer the world? What are some things that they want to achieve in the world. All these things are really important because you're gonna be able to speak their language in your copy. Number four, analyze your competition. Not too much. Understand who they're targeting, how they're targeting. Don't copy them. Number five, test and refine. Get real data. Understand who your target audience is and move closer and closer to it. Step six, Continuously gather feedback from your customers so that you can find more people just like them. Identifying your target market is not a one time task. It's an ongoing process that evolves with your business. In the SaaS world, in the software world, which I was in for 10 years, this is called product market fit. Understanding your product market fit and achieving product market fit. But you have to maintain product market fit because the market changes, the world changes, you change, your product changes. So you got to make sure that you're constantly doing this over and over and refining and understanding who your audience is. I want to share with you a story that really Illustrates this. On the $100 MBA show, we had an extended interview with Nathan Barry, the founder of Convertkit or I think now it's called Kit. They just shortened their name and all about how they got started and how they really niched down in the beginning and how their market changed over time. Nathan shares his story on the episode. But in the beginning they just targeted a specific niche. Bloggers. Not just bloggers, mommy bloggers. And then they really just focused on them. They cornered that market, they really served them and then they expanded out to bloggers. They were email marketing for bloggers and then that evolved to they were email marketing for creators. So they really hit the bullseye in the beginning with just specifically mommy bloggers. And then they started to go out, out, out outside that bullseye and now they're one of the biggest email marketing softwares out there. So you can expand your market over time, but in the beginning really get specific with your target market. That's what really works. Get some traction, get some velocity, make some money, right? And be able to then to expand and use that revenue to grow your business. Thanks for tuning in to the Hundred Dollar MBA show. If you found this episode valuable and you want to take things to the next level, you want to learn more, check out our website, 100- MBA-NET. We have over 2,500 business lessons on our podcast that can help you grow your business from mindset to practical things like identifying your target market, to finance, to idea validation, to a whole lot more. And if you want to say thank you and show us some love, go ahead and share this episode with a friend. Share Send a link in a message. Say, hey, I've been thinking of you. Here's a link I think you'd like to check this episode out again. I'm Omar Zinhom. Thanks for checking us out. Business is an amazing adventure. It's the best decision I've ever made is become an entrepreneur is to start a business is to live this new life and to add value to the world in my own way. You're gonna absolutely love it. I'm sure that if you already started, you are loving it and it just gets better and better over time. I'll see you on the next episode.

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