How to find a target audience for your own startup?
Identifying a target audience – how do you go about it? Check out our definitive guide to startup audience identification and acquisition.
One of the first things you need to do when launching a startup is to understand who your target audience is. However, you’d be surprised how many businesses don’t do this.
According to HubSpot, 42% of marketers don’t even collect basic demographic information about their target audience. And in a market where 10% of startups fail in their first year, you need all the information you can get in order to maximize the chances of success.
Identifying a target audience is the best way to get your business off to the right start and optimize your growth. If you’re not sure how to find the perfect target customer, we’ve put this comprehensive guide together to help.
Table of contents
What is a target audience?
A target audience is a specific group of customers that you aim to reach in order to maximize revenue and sales for your startup.
This audience is the one most likely to buy your products or services. It’s essential to carry out research and testing in order to identify the right set of customers.
Determining the right target audience helps you build your MVP, identify which marketing channels to use, and understand how your product or service can solve people’s problems.
Why is identifying a target audience so important?
Everyone is NOT your customer
Seth Godin
When you’re launching a startup, it may be tempting to try and sell to as many people as possible. After all, the more people you promote your product or service to, the more likely they are to buy… right?
However, this is counterproductive, as you end up wasting time and money trying to sell to people that aren’t interested. For example, if you’re developing a smartphone app aimed at Gen-Z, you don’t need to promote it to Millennials or Gen-Xers.
If they buy it, awesome. But they’re not who you should be focusing on.
According to CB Insights, 35% of startups that fail do so because there is no market need for them. This means they created a product or service that people didn’t want to buy. Odds are that they didn’t look into target audiences, or identified the wrong target audience.
The more defined your target audience, the easier it is to market to them. And that ultimately means more sales and revenue for your brand-new business.
Let’s take a look at how to discover the right audience for your startup in eight simple steps.
1. Thoroughly understand what you want to sell
Before you determine which target audience you want to sell to, you need to know your product or service inside and out. When you know your features, benefits, and unique selling points, you’re better positioned to understand who can benefit from what your startup has to offer.
A good place to start is with a business model canvas or lean canvas. These models can help break your idea down and give you the information you need to get started. And the great thing is, they don’t take a long time to put together.
They can also help you see if your business idea is a viable one to begin with, increasing the odds of success even further.
2. Carry out market research
Market research is the best way to gather data about the current marketplace and who you should target your products or services at.
You can carry out market research in many different ways.
Primary market research is research you carry out yourself (or that is carried out by someone on your behalf). For example, asking potential customers to complete a survey, or observing people using your MVP.
Secondary market research is research that has already been gathered by someone else. For example, reading through whitepapers and government surveys,
Primary and secondary data can also be split into qualitative (descriptive and open-ended) and quantitative (statistical and close-ended). While qualitative data is more flexible, it can be harder to analyze, and vice versa.
You can get the information you need in a variety of different ways. As well as directly asking your prospective customers, you can use:
- Google Analytics
- Social media analytics and social listening
- Your CRM platform
to find what you need.
Which type of market research is right for your startup? It depends on your industry, how much time you have, and your budget. In a perfect world, primary market research is always the best option as it’s specifically targeted towards your business needs.
However, there may be times when primary research isn’t possible, for example, if you need to launch quickly or don’t have much budget.
3. Look at your competitors
A good strategy when it comes to startup customer acquisition is to look at your competitors. If you plan to target similar customers, this is a quick and easy way to get a handle on who you need to focus on.
For example, check to see if your competitors have a case studies page. This will not only show who their most loyal clients are but help you understand what pain points their customer’s experience. It’s an easy way to get valuable information about your nearest rival!
You can also use review sites to get valuable insight about who buys from your competitors. Websites like TripAdvisor even collect and show demographic data about who has submitted a review.
4. Create buyer personas
Now the fun part!
At this point, you should have a wealth of data you can use to determine who your target audience (or target audiences) should be. One of the easiest ways to present this information is through a buyer persona.
A buyer persona is a representation of your startup’s ideal customer. Giving them a name, a photo, and even creating a backstory means you can visualize them, which makes it much easier to sell. You can also give your buyer persona to your team and any third-party companies you work with, meaning they can quickly get a handle on who your number one customer is.
You can also create ‘negative’ buyer personas – people who you don’t want as a customer. Again, you can use these to ensure your sales and marketing efforts don’t target these people.
There isn’t a hard or fast way to develop a buyer persona – you can include as much or as little information as you need. If you are looking for a simple buyer persona template though, HubSpot has lots of free templates to get you started.
When identifying your target audience through a buyer persona, we recommend including the following:
- How old they are
- What their gender is
- Whether they have any kids or pets
- Where they live
- Where do they work and what their job title is
- How much money do they earn?
- Their level of education
- Their interests and hobbies
- The problems they’re experiencing and how your product or service can help them out
- The social media channels they use, the content types they enjoy the most, and what websites they get their news from. This can help you determine where to advertise
- Any additional information relating to your business sector. For example, if you’re developing a restaurant reservation app you might want to include how often they eat out, what foods they like, and how much they spend each time
- Don’t forget to give them a name and a photo – you can use a stock photography website for this
Don’t worry if you didn’t get this information at the market research or competitor analysis stage – it’s not too late to go back and fill in any holes in your knowledge.
Still not convinced about the power of buyer personas? 71% of brands that have well-defined buyer personas go on to exceed their revenue goals.
5. Prioritise your personas
You’ve probably now got a couple of personas representing the people you want to sell to. However, it’s still important to organize them in order of priority.
Let’s say that you have three buyer personas, Andy, Bob, and Carol. It turns out that 60% of your current revenue comes from customers that are similar to Bob. This means that it’s more beneficial to target the bulk of your sales and marketing toward the Bobs of this world!
Of course, it’s essential to continue to evaluate your buyer personas to make sure they’re still relevant to your business. We’ll look at this in more detail later.
6. Do some testing
Before you pour your marketing budget into appealing to your newly discovered target audience, it’s critical to do some testing.
An excellent way to test your target audience is through paid advertising. You can run an ad on social media or Google that appeals to your buyer persona of choice. You can then look at the analytics and see how many people that clicked on your ad belong to that specific audience.
7. Identify the right marketing channels
Have your ideal target audience done most of the clicking on your ad? If the answer is yes, congratulations! You’ve identified the right target audience for your startup!
The next step is to use the information you gathered while creating your buyer personas to determine the right marketing channels to use.
For example, if your key buyer persona uses a particular social media channel, you can focus your advertising on that platform. If they have specific pain points, you can create content that addresses them. If they read certain magazines or visit particular websites, you can advertise there to get their attention.
You can even use the buyer personas you create to create segmented marketing campaigns. For example, let’s say you’re able to split your email marketing list into Andys, Bobs, and Carols. You can send targeted emails to each buyer persona, increasing the chances of opens, clicks, and conversions.
Be sure to monitor your marketing metrics over time to ensure you’re getting a decent return on investment. If you’re not getting the ROI you want, it might be time to review the way you do things or focus on another platform instead.
8. Monitor and revisit your target audience
When you start out, you may have one specific target audience in mind. However, this target audience may change over time.
Take, for example, Lucky Charms cereal. When the cereal was launched in the 1960s, it was aimed at children. However, research showed that 40% of people that enjoyed the cereal were actually adults. A new advertising campaign aimed at older customers led to increased sales and brand awareness as a result.
It’s important to reassess and reevaluate your target customer as your startup evolves. Internal and external factors can affect who primarily buys your product or service.
We hope you found this guide to startup audience identification useful. Remember that data is super important when identifying the right target audience. Do your research, keep up to date with any changes, and you’re well on the way towards finding the right customers for your business.
If you need a little extra help when it comes to startup customer acquisition, we are here to help.
FAQ
A target audience is a specific group of customers that a startup aims to reach in order to maximize revenue and sales. It’s the group most likely to buy the startup’s products or services.
Identifying a target audience is crucial for startups because it helps focus marketing efforts and resources on the right customers. It ensures that the startup’s products or services are tailored to meet the needs of a specific group, increasing the chances of success.
Before identifying a target audience, it’s essential to have a deep understanding of your product or service. Familiarize yourself with its features, benefits, and unique selling points. Tools like business model canvases and lean canvases can help break down your idea and provide the necessary information.
Market research involves gathering data about the current marketplace and potential customers. It helps you understand the preferences, needs, and behaviors of your target audience, guiding your startup’s decisions and strategies.
Buyer personas are detailed representations of your ideal customers. Include information such as age, gender, job title, interests, pain points, and more. Creating both positive and negative personas can further refine your target audience and marketing strategies.
Prioritize your buyer personas based on their potential impact on your startup’s revenue. If one persona brings in a larger portion of revenue, focus more resources on targeting and serving that group.
Testing is essential to validate your assumptions about your target audience. Paid advertising can be used to gauge the response of specific buyer personas and adjust your strategies accordingly.
Use the information gathered from your buyer personas to determine which marketing channels your audience frequents. Tailor your advertising and content to those channels to effectively reach your target customers.
Yes, it’s important to monitor and revisit your target audience as your startup evolves. Internal and external factors can influence your customer base, so staying up-to-date helps you adapt your strategies accordingly.
One common mistake is trying to appeal to too broad an audience. It’s better to focus on a specific group with well-defined characteristics. Additionally, not conducting proper market research can lead to incorrect assumptions about your target audience.
If you need assistance with startup customer acquisition, there are professionals and resources available to guide you. Consider seeking advice from marketing experts or using tools and platforms that specialize in customer acquisition strategies.
