How to Choose a Target Market that Will Make You Profitable
Do you struggle to connect with your customers? When potential buyers see your Instagram posts, land on your website, and chat you up at your markets, do they feel right at home? They should. To make that happen, you need to know your target market like you know your best friend.
One of the first steps of branding your soap biz is to define your target market. But, this is a huge obstacle for new soap biz owners that reach out for our help. So, let’s break down the barriers and start at the beginning…
What is a target market, anyway?
A lot of soap biz owners mistake their current customers for their target market. Whoever their buyers are must be who their target market is, right? Not quite!
A target market is a particular group of potential customers. It’s the people to whom you will market and sell your company’s products. A target market is so specific that you could picture members as unique individuals.
Do you plan to sell to women aged 20 to 60 years old who make $50,000 to $150,000 a year and want to be able to pronounce the ingredients in their skincare? That is not a target market – it’s a quarter of the population!
Now imagine a group made up of 28-year-old women. They are juggling their booming careers in tech and their beautiful (but absolutely exhausting) twins. Therefore, these working moms need a quick self-care routine to pamper themselves every morning. Now that is a pretty good start at defining a target market.
Your target market is your ride-or-die. And knowing your target market inside and out is make or break for your biz. Their voice is the one you will listen to when honing your product line, seeking out wholesale stockists, and creating advertisements. So, you need to talk their language, look the part, and fill their needs. They are the lifeblood of your business, informing every move you make. Therefore, you should honor that to the core of your business!
And what it’s not…
Defining a target market does not mean that you are slapping a blockade on your booming biz. Just because someone isn’t your target market doesn’t mean they won’t buy from you. But don’t let outliers determine the choices you make for your biz. So, when you get product requests from people outside your target market, don’t jump to add those items to your line.
HOW DO YOU PICK YOUR TARGET MARKET?
There are a few methods for choosing your niche. Use them in tandem to really narrow your focus. Your goal is to define a perfect customer that you can relate to and that can support you.
1. Choose a market you have something in common with.
You will be better able to communicate with a tribe you share some common ground with. This can mean choosing a group who:
- shares your gender
- is near your age
- faces challenges you’ve faced
- supports causes you are passionate about
- has experienced common milestones
We’ve had students build brands drawing from their own experiences as military spouses, shooting/hunting enthusiasts, pet rescuers, work-at-home moms, and so on.
Those touchstones help you to relate to your customers. In turn, they help customers feel like you get them. And members of your target market develop an interest in your brand and products. Cha-ching!
You’ll want to avoid a target market that mirrors you 100%, however. That would cause you to have a target market that wants to start their own soap biz!
So, identify any problem spots. Maybe your perfect customer is less into do-it-yourself than you are, has more discretionary income, or simply doesn’t have time to DIY.
Takeaway: You are not your target market. But you should have interests in common.
2. Consider a market that other brands are leaving out.
HerRoom was founded to give women of all sizes and shapes access to great bras. They got rid of the awkwardness and inconvenience of shopping at brick-and-mortar lingerie stores that focused on standard sizes.
Warby Parker came about because of a cash-strapped grad student. He had to choose between replacing a pricey pair of specs or buying books for the upcoming semester. And he realized he wasn’t the only one making tough choices because of the high price of stylish eyeglasses.
Both companies saw people who were being left out in the cold by existing brands. And they used that knowledge to light their own fires!
Who are popular soap and cosmetics companies leaving out? Think about it…
- Is one catering to girly-girls, but excluding anyone in that category with scent sensitivities?
- Is another pushing multi-step skincare routines for women over 50, but excluding women who camp, hike, or travel and don’t want to lug a 10-step skincare routine across the globe?
- Are others all over the wet shaving renaissance when it comes to the guys but making nothing that appeals to women?
Find the people who have not found their holy grail products and serve them. But, don’t make the mistake of thinking you can serve everyone.
The flip side of having wildly loyal fans is not being other folks’ cup of tea. Embrace that, and steer clear of the dreaded, generic middle ground. Because, in the words of Ash Ambirge (Author, Founder, and CEO of The Middle Finger Project) “Nobody fangirls over Great Value.”
Takeaway: Find an under served market and create a brand they will love. (It’s okay if other people hate it.)
3. Look at industry publications to find emerging markets and trends.
Boost your industry-specific knowledge by reading updates from media outlets that focus on the beauty industry.
- What’s popular?
- What’s new in products and packaging?
- Who do those trends appeal to?
- What can you put a unique spin on?
Think about the people that might be interested in these trends (and who started them in the first place). They are part of a potential target market!
You can find a list of our favorite pubs here: Recommended Cosmetic Industry Publications.
4. Make sure your chosen niche can support you.
We hit on this in Soapmaker to Moneymaker, when we talk about target market research in the "know thy customer" module. When choosing your ideal customer, there are certain boxes you need to tick to make sure a segment makes sense for you.
You need a group of people who can afford to pay what you are charging. (Make sure what you are charging is enough by understanding what your real costs are and how to price your soap.)
Take my Warby Parker example above. They knew their market segment had limited spending power. So, they created a very narrow product line to reduce their cost and, in turn, their price.
HerRoom knew that their clientele valued fit and quality. And, that they were willing and able to pay for it.
5. And know that you can reach your customers.
To sell to your target market, you need to make sure you can reach them, right?
Many lingerie shops spend cash on brick-and-mortar stores. But HerRoom spends money to reach customers online instead. For instance, they offer generous shipping/return policies. In addition, they have professional fitters who give product feedback. And they spotlight social proof in the form of customer reviews.
Warby Parker lets millennials download an app to try on frames virtually. Or they deliver a try-on box right to their mailbox.
Think about how your niche wants to experience your products…
- Will they visit a B&M (brick and mortar shop)?
- Is the convenience of a monthly subscription a must?
- Do they live for home parties, Tupperware-style?
- Or do they want to see influencers on Snapchat talking up your wares?
Do those answers line up with your business goals? If not, go back to the drawing board and make some adjustments.
Use resources like Statista and the Pew Research Center to research demographics and psychographics of potential target market.
Takeaway: Your target market’s wants should complement what you want from your business.
6. Let go of the idea that there is one perfect target market.
My mantra in biz (and life) is, “Don’t make perfect the enemy of good.” In other words, good enough is good enough.
Target markets can change. They evolve. There is no one perfect target market. Pick one and get moving. Therefore, adjust the course as you go.
Get 90% of the way and then start putting yourself out there. Keep good records. Make thoughtful changes as needed. Your target market will grow and evolve and change just as you do. Most importantly, don’t get paralyzed searching for perfection!
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