Every small business in Southern Arizona has many challenges and obstacles to overcome.
One of the biggest challenges is identifying the right target market for your business. Most small businesses have many potential target markets. Target markets can be very broad, or they can be narrowly defined. Clearly defined, narrow target markets are also called “niche” markets.
SCORE gives free advice to about 1,200 business owners in Southern Arizona every year on a variety of topics. Most small businesses we see at SCORE are marketing to too many target markets, and their markets are too broad. The marketing budget does not adequately penetrate any of the target markets; hence the business does not see a good return on their investment. When a business has a clearly defined niche market, it is much easier to reach the potential client, and the marketing dollars go a lot further. Let’s look at an example.
Ian is a commercial insurance agent. He sells insurance to business owners. This is his broad target market. Ian could never effectively market to every business owner in Tucson; there are simply too many of them. Ian can narrow the target market into niche markets by applying filters like the geographic location, size of the business, type of industry the business is in, number of employees, age of the business and a host of other fields. Some of the niche markets Ian could come up with are:
Niche market No. 1: A new business with between five and 50 employees.
Niche market No. 2: Any business owner who leases a building on the east side of town.
Niche market No. 3: Restaurants.
Take a few minutes to identify and define the niche markets you want to dominate in your industry. Keep it to a maximum of three, and make sure your marketing strategy is aligned to capture clients in that target market. If you do, you will be off to a great start in 2016.
