Defining your target market is critical to your business's success. In this guide, you'll learn how to identify your target audience to create more efficient marketing campaigns that increase conversions and drive better results.
What Is a Target Market In Business?
A target market is a specific group of consumers within an available market you want to reach with your marketing campaigns. This group of people is highly interested in your products or services and is likelier to purchase than an average consumer.
Members of your target market will share characteristics such as their age, where they live, what they’re interested in and more.
Target Market vs. Target Audience
The two terms are often used interchangeably, but there is a useful difference. Your target market is the broad group of people you want to sell to, such as “pet owners in the United States”. Your target audience is a narrower group within it that a specific campaign or message speaks to, such as “first-time dog owners in their 20s who shop online”.
You define your target market once, as part of your business and digital marketing strategy. You define a target audience for each campaign, product launch, or ad.
Why Target Markets Are Important For Marketers?
If you don’t know who your ideal customers are, you cannot be sure that your products or services meet their needs.
Furthermore, running efficient marketing campaigns will be next to impossible if you don’t have a clear idea of who to target.
As Seth Godin once said, "Everyone is not your customer. When you market to everyone, you are essentially marketing to no one".
If you target people who are not interested in what you're selling, you'll be wasting your resources and yielding few results. This will lead to low conversion rates and higher cost per conversion.
By clearly defining your target audience, your marketing budget will be much more cost-effective as your efforts will focus directly on the people more likely to purchase from your business.
Your campaigns will be laser-targeted to meet the needs and desires of a specific group, resulting in targeted website traffic, more conversions, and better overall results.
Knowing your target audience will allow you to improve your products or services further as you understand your customer's pain points and what they are looking to solve.
7 Steps To Define Your Target Market
The best tactics to find your target market are:
- Analyze the profile of your existing customers
- Analyze the profile of your website visitors and social media audience
- Identify who can benefit from your product/service
- Create primary and secondary targets
- Spy on your competition
- Run Performance Max campaigns on Google Ads
- Run paid ads on Facebook and Instagram
1. Analyze the profile of your existing customers
If you already have a customer base, the first step is to create personas and analyze your existing customers.
As these people have already converted into sales, you can gain valuable insights into the type of people that your business is having success with.
Take a close look to see if you can identify any patterns in their characteristics. Some important attributes to evaluate include:
- Age: What is the average age range of your existing customers?
- Location: Where do your customers predominately live? Consider important factors like country, culture, and time zone.
- Gender: Are most of your customers female or male? Knowing this will help you refine your marketing strategy to be more effective.
- Income: What is the average income of your current customers and how much money do they have to spend on your products or services? Do they need to save to purchase from you? Are they able to make repeat purchases?
- Lifestyle: What do your customers do in their free time? What other types of products and services are they interested in?
- Behavior: What kind of brands do your customers interact with online? Which social media platforms are they most active on and what kind of content do they view?
2. Analyze the profile of your website visitors and social media audience
You can gain great insight into the profile of your customers, website visitors, and social media followers by thoroughly reviewing the data on your analytic platforms.
For your website, you likely already use Google Analytics to track your visitors. The free platform from Google provides incredible details of your website users and all the actions taken on your site.
From the Demographic details report in Google Analytics 4 (Reports > User > User attributes > Demographic details), you’ll be able to see the age, gender, location and language of your website visitors, along with key metrics for each group, such as views and engaged sessions.
In the same report, switch the dimension to Interests to see what your users are interested in. Age, gender and interest data only appear if Google signals is turned on for your property.
Social media platforms also provide useful analytics you can use to understand your audience better.
One such tool is Instagram, which provides detailed information about the age, gender, and location of your followers. It also lets you know the best time of the day for engaging with your followers.
On Facebook and Instagram, the Audience section of Meta Business Suite’s Insights shows the age, gender and location of the people who follow your pages. To estimate how many people match a target market, start building an audience in Meta Ads Manager: it shows an estimated audience size as you add locations, ages and interests.
3. Identify who can benefit from your product/service
When you're defining your target audience, it is very important to understand the unique value of your products or services and who can benefit from them the most.
To start, you need to distinguish between your product’s features and its benefits.
Rather than focusing solely on what you do and how you do it, closely analyze your products and services to see how they are of value to customers.
Ask yourself: What problem are you trying to solve? What desires do you want to fulfill? How does your product or service meet these needs?
Customers who will benefit from your business the most will share similar characteristics. When evaluating who has the most to gain from your products or services, consider the following traits:
Demographics: Target customers are characterized by different criteria such as age, gender, ethnicity, religion, income level, education, and more. Look for a pattern between these characteristics.
Geographics: Geographics refers to where your target audience lives. Your products or services will only be relevant to people in a particular area. Depending on what your business offers, this could be a local, state, national, or international market.
Knowing the geographic characteristics of the people who will benefit from your products will help you form appropriate marketing campaigns.
Behavioristic: Behavioristic characteristics focus on how people act including purchasing and spending habits, brand interactions, and customer loyalty. This data is used to understand what it is that motivates people to purchase from your business.
Psychographics: Psychographics categorizes people based on factors related to their personalities such as interests, attitudes values, and beliefs. These characteristics will play a major role in a person’s shopping behavior. For example, someone who purchases luxury items may do so because they value quality and status.
Knowing this information will allow you to create detailed customer profiles for the different groups of people who can benefit from your business.
4. Create primary and secondary targets
You can segment your target audience even more by defining primary and secondary targets.
Your primary target audience is the main focus of your business and represents the group of customers who can add the greatest value to your business. This value can result from their greatest possibility of converting or from their higher average order value.
Many products and services will fulfill the needs of various groups of people. What makes your primary target audience distinct is that this group has the greatest need for your products or services, can pay for them, and gains the most benefits.
They will live in the same geographic region as your business and likely make up most of your sales.
The primary target audience won’t necessarily be the largest group in your market, but it is vital to your business's success.
Secondary target audiences complement your primary targets. These groups are strongly interested in your products or services.
Secondary target audiences can share characteristics with your primary audience while having unique attributes.
These groups are less valuable to your business because they often:
- Have less money to spend on your products or services
- Have lower demand for what you offer
- Are too small in number and monetary value to be a primary target
How to choose between segments
If you’ve found several possible groups, compare them on four questions before you decide which is primary:
- Size: is the group big enough to support your sales goals?
- Ability to pay: can they afford what you sell, and how much is each customer worth over time?
- Reach: can you reach them affordably, through channels you can use?
- Fit: does your product solve a problem they feel strongly about, better than the alternatives?
The group that scores best overall becomes your primary target. The next best becomes your secondary target.
5. Spy on your competition
Checking your competition is an effective way to understand your target customer.
Identify your main competitors, examine their websites, social media profiles, and search ads, and try to discern who their target audience is.
You can get an accurate idea of their customer experience by signing up for their newsletter, following their social media pages, or even buying their products.
There are two more ways to spy on your competitors and find their target market effectively.
The first way is to use a digital marketing platform like Semrush. These platforms have dedicated tools for analyzing your competitor's audience.
For example, with Semrush’s Traffic Analytics reports, you can find out in detail where your competitors get traffic, what the main characteristics of their audience are, which social networks they use, and a lot of other information that will help you build your audience personas.
You can also automatically compare your audience's characteristics with their own and identify audience gaps to add to your primary and secondary targets.
The second way to learn from your competitors is to use the Meta Ad Library.
The Ad Library is a database of ads running on Facebook and Meta’s other platforms, such as Instagram.
This lets you view the ads, imagery, and messaging your competitors use to reach potential customers. You can filter the results by active/inactive, country, region, platform, and audience size.
You can search the library by using a competitor's name or keyword.
6. Run Performance Max campaigns on Google Ads
Another way to find your target market is to run AI-powered ads. With this strategy, you can set up and run a marketing campaign with a generalized audience and let AI find your ideal audience.
You can then use the data from the campaign to see which groups of people were the most interested in your business and use these insights to form your target audience.
Google's Performance Max campaigns will automate audience targeting based on the advertised product or service and the goal you set.
Your ad will automatically show to matching people across Google's properties, including Search, Maps, Gmail, YouTube, and partner websites.
Google AI campaigns use machine learning to maximize conversion in every ad auction. They look at data signals from performance history to refine ad targeting to reach the most relevant individuals.
7. Run paid ads on Facebook and Instagram
You can use a similar advertising tactic on Facebook and Instagram, using the same Facebook marketing tools, to discover the characteristics of your target customers.
Start by creating a marketing campaign with a general audience. Let the campaign run until you have enough data to gain meaningful insights from the results.
Meta Ads Manager provides various metrics to help you gain a deep understanding of your campaign’s performance.
You can get a more detailed understanding by using the Breakdown menu. This will allow you to filter your campaign reports based on:
- Delivery: See more information about who your ad was delivered to. Filter using criteria such as age, gender, location, browsing platform, platform, device, time of day, and others.
- Action: See more information on the actions taken in response to your ad. This includes conversion device, destination, video view type, video sound, carousel card, and others.
- Time: Detail by day, week, two-week periods, and months.
The data provided by breakdowns will give you clear insight into which groups of people are responding the best to your marketing campaigns.
Target Market Examples
Let’s take a look at some examples of target markets for different types of businesses. The percentages are illustrative, to show the level of detail to aim for, not market data.
1. Athleisure brand
Primary audience - Women looking for stylish yet comfortable clothing to wear for a variety of occasions.
Secondary audience - Men and women looking for modern looking clothing to exercise in.
Demographics
- Age range: 18-34
- Gender: 70% female, 30% male
Psychographics
- Looks up to lifestyle and fitness influencers.
- Loyal to one or two clothing brands.
- Values the status of wearing premium apparel
Geographic
- Major cities in the United States
- Suburbs of major cities in the United States.
Preferred channels
- Follows health and wellness influencers on Instagram.
- Reads health and wellness blogs for exercise tips
2. Vegan Protein Powder
Primary audience - People who are health conscious and follow a strict vegan diet that is looking for protein powder.
Secondary audience - People who are looking for a protein powder and want an alternative type of protein to complement a diet heavy in meat.
Demographics
- Age range: 18-34.
- Gender: 55% female, 45% male.
Psychographics
- Tries to eat a diet that is sustainable, filled with organic and non-GMO foods
- Likes to take hikes and explore nature
- Loyal to brands that share their values
Geographic
- Major cities in the United States
- Suburbs of major cities in the United States
Preferred channels
- Reads blog posts about holistic living
- Watches nutrition videos from health influencers on Youtube
- Follows nature accounts on Instagram.
3. SaaS Marketing Solution (B2B)
Primary audience - Marketing professionals looking to automate their business processes to improve efficiency and drive better results.
Secondary audience - Solo entrepreneurs looking for a marketing solution that provides extensive functionality in a single service.
Key demographics
- Age range: 35-49.
- Gender: 60% male, 40% female.
- Income Level: $80,000/year or higher
Psychographics
- Likes to review and compare products before making a decision
- Wants to prove competency in their profession
- Hesitant to try new methods of doing things
Geographic
- Major cities in the United States
- Suburbs of major cities in the United States
Preferred Channels
- Email is the go-to medium for communication
- Uses social media platforms such as LinkedIn and X for networking and industry insights.
For business-to-business (B2B) products like this one, add firmographics to the profile: the industry, company size, and budget of the companies you sell to, and the job title of the person who makes the buying decision.
How to Write a Target Market Statement
Once you’ve done the research, sum it up in one or two sentences you can share with your team, put in a business plan, or use when someone asks “what is your target market?”. Use this template:
Our target market is [who they are], aged [age range], living in [location], who [the need or problem your product solves] and [a buying habit or value that makes them likely to choose you].
For example, for the vegan protein powder above: “Our target market is health-conscious vegans aged 18 to 34, living in major US cities, who need a plant-based protein source and prefer brands that share their values on sustainability.”
Keep it specific enough that it tells you who not to target. If your statement could describe almost anyone, go back to your research and narrow it down.
Key Learnings
Defining your target audience allows you to pinpoint the ideal customer for your business and direct your efforts to them, as they are the ones who will drive results.
The first step in target marketing is analyzing your existing customers. These people have already bought from you, so you can look for common characteristics among them to establish a baseline for the type of people you want to target.
Next, you can analyze your website and social media profiles to see who interacts with your business. Look at your analytics platform for each channel to find important demographic, geographic, and psychographic information that you can use to create your customer personas.
Finally, you can define your target audience by running paid campaigns on platforms like Google and Facebook. You can start with a general audience, analyze the results to see which groups of people responded to your ads.
