Between 2016 and 2021, the financial services industry grew by an average of 2.2% every year. In 2021, there were 13,494 RIAs compared to 11,847 in 2016. Currently, there are 5,965 insurance companies compared to only 1,105 in 2016. This continued growth and expansion only leads to an increase in competition for mid-size companies.
In a saturated market, you have to remember you can’t go after everyone. More importantly, you don’t want to go after everyone. If you’re ready to grow and scale, it’s time to narrow down exactly who you want to target with your marketing strategy.
What Are the Benefits of Identifying a Target Market ?
It might seem counterintuitive — how can targeting less people get you more clients? The truth is that determining your target market offers your business a wide variety of benefits. Here are just a few:
- Stand out against the crowd. The more specific your audience is, the deeper you can dive into their likes, dislikes, hobbies, wants, and needs. This knowledge is what will make your message break through the clutter ahead of the competition.
- Get your message heard by the right people. Yes, a target market means you are putting yourself in front of fewer potential clients, but it puts you in front of the right potential clients. Instead of marketing to all the dentists in your city or state, you might narrow down to just target dentists who have been practicing for at least five years, within six zip codes, and who are within a 10-year age range. These individuals might be more likely to work with you depending on what you offer.
- Smartly use your time and resources. You don’t have the same resources as the big names in the industry. Wells Fargo, the third largest commercial bank in the country, reported it invested $600 million in advertising and promotion in 2020. To grow and scale, you can use a target market to focus your budget, time, and energy on a specific group of people more likely to respond.
How Do I Determine My Target Market?
Your target market should be unique to your brand. Following this process requires you and your team to closely examine your company’s strengths, weaknesses, goals, and existing data to help you determine the best target market.
- Know who you are. Start by making sure you and your team have clearly determined who you are as a company. Make sure your mission, vision, and values are well defined, as this impacts the people you decide to target.
- Examine your current client base. Look for common characteristics across all your clients, but closely look at who you work most successfully with. Are your best clients small business owners of a certain industry, such as restaurants? If so, you’ve found a key part of your target market!
- Look at underserved markets you connect with. This requires examining the personal experiences, hobbies, and interests that make you uniquely qualified to serve a group your competitors might be missing. For example, if you were raised by a single mother who owned her own business, looking at how to incorporate that demographic into your target market is something to consider.
- Clearly define what pain point(s) you are addressing. Analyze what services you provide to meet your ideal client’s specific needs. This provides huge insight into who you need to target while helping you uncover your unique value proposition (UVP). Your UVP is what sets you apart from the competition because it is something only you can provide. For example, if you’re especially skilled at helping people overwhelmed with the process of obtaining a loan, you might consider first-time homebuyers in their 30s.
- Narrow it down beyond demographics. Start by looking at age, location, gender, etc. Then take a deeper look: What’s important to them? What do they value? What are their interests?
Taking the Next Step with Target Market Profiles
Once you’ve determined your target market, it’s time to create target market profiles. These will drive your marketing efforts to make sure you’re connecting with the right people. This isn’t tough to do, but it does require time and research.
A comprehensive target market profile:
- Gives a detailed description of an ideal client’s attitudes, desires, values, etc.
- Dives into the demographics
- Breaks down major pain points
- Explains how your company addresses those pain paints
- Backs up information with data and market research
We work through this process with clients and create detailed target market profiles. They’re used internally by everyone from copywriters to designers. The profile makes sure everyone on the team is on the same page in regard to who exactly is being targeted.
With a well-developed target market profile you can:
- Craft more effective email marketing campaigns. If you have knowledge of who you’re meant to target with your emails, it makes your campaigns significantly stronger, from the subject lines you write to the content of the email itself. For example, sending an email on general investment strategies might not entice a reader to click. However, crafting an email specifically addressing a target audience’s pain point (“How to Handle Investing As a Newly Married Couple”) is much more likely to capture and convert.
- Develop and refine your services. Your profile might end up uncovering an area where your services could be refined. If you primarily target mid-sized businesses that need payroll support and the profile uncovers that many need HR support as well, it is worth considering if it is within your scope to start offering this.
- Improve user experience. This is especially true with your website. We help clients create profiles on their site to help prospects self-select an option as they are determining what services best fit them.
Once you determine your target market, this knowledge should sit at the heart of your marketing strategy. It drives not only your overall strategy, but the individual tactics you take to reach potential clients.
Interested in learning more about the benefits of a target market? Check out our previous blog, “Why Your Target Market Is the Key to Growth.”