We’ve turned our IDEA into an offering of value once we’ve identified: What our IDEA IS…What our IDEA does…And for WHO?
TARGET MARKETING is the second phase of the PRODUCTIZATION process because we use the FEATURES and BENEFITS of our offering, and align them to groups of potential USERS.
So far, we’ve defined our PHP Advocates IDEA by a few of its FEATURES and BENEFITS, therefore effectively turning it into a potential product or service, assuming we haven’t produced the actual offering yet. However, to make it into an offering a value, we must project WHO will find a purpose, or worth in the IDEA we hope to actualize.
Remember the Conversion Funnel in Video2_MARKETING101? Before the conversion process begins, we must determine WHO we are trying to convert, or SELL to. No matter what we think our product or service has to offer the world, everyone on the planet is NOT going to find value in our offering. The WORLD is not a TARGET MARKET.
Advertising and marketing dollars should be spent on attracting the most likely groups of PEOPLE who may be interested in what we are selling. These likely groups are called our TARGET MARKETS.
The Target Marketing process begins with MARKET SEGMENTATION, or identifying potential markets, or broad groupings of people for our offering. It is important to remember, we are NEVER selling to target MARKETS. We are ALWAYS selling to PEOPLE, or a particular target AUDIENCE. (Even if we are selling to many groups of people, we must categorize, or SEGMENT them separately.)
Social Media platforms, like Facebook, often have a broad cross-section of users, but even so, not everyone on the planet uses them. Their enormous base of TARGET USERS grew organically. When they first came online, their TARGET MARKET was Harvard students only, then universities across the U.S., then they opened their platform to broader markets. In all cases, Facebook went after specific groups of people, TARGET MARKETS, to sell their offering, and begin the conversion process.
To identify potential TARGET MARKETS for our offering, we segment people using four main data sources:
Demographic data— meaning age, sex, education level, income level, marital status, occupation, religion.
Geographic data— which is location, ethnicity, climate, environmental conditions.
Psychographic data— which is generally psychological data, such as personality traits, values, attitudes, interests, and lifestyles.
And Behavioral data— which is purchase data, customer loyalty, web-surfing habits, clicks on links, even online Tweets and updates from social media platforms are analyzed and categorized for tighter target marketing.
In our globalized marketplace, where I can get cupcakes made in L.A. delivered to my office in Beijing in 24 hours, geographic data is less significant than ever, as is much of the demographic data, like gender, age, race, location…etc. In most cases this data is too broad to use for effective targeting. We can’t motivate an entire race, or age group or gender to do what we want them to.
The two most popular data sources today are Psychographic and Behavioral, in which everything we do online is tracked and analyzed, to ‘get inside our head,’ and find out what we are likely to buy. Never forget you are ALWAYS marketing to people, not markets. The more we learn about the individual, the more likely we are to, first, find them— identify the places they hang out, online, and in-person, and then sell them on our offering.
Target Marketing is regarded as one of the most difficult bits of the PRODUCTIZATION process. It’s hard figuring out what people want, especially when we often don’t know until we see it. You didn’t know you wanted a cellphone until you were aware it existed. To complicate matters, with life events, and age, our desires are constantly changing, so even with Big Data analytics of today, marketing, like Psychology, is still more art than a science.
Typical response rates of conversion— getting someone to buy our offering, or take the ACTION our marketing campaign directs, typically run between 1-3%. Good response rates on any given advertising campaign usually are between 3.5-7%. Great response rates on any given marketing effort are anything above that. Response rates vary, depending on the medium—whether it’s a print, or online campaign.
Click-through response rates (CTR)— getting clicks on your ads— run higher, but are NOT a measure of true conversion. Actual conversion is getting the USER to ACT on the specific directive of the campaign, like getting newsletter sign-ups, or purchases.
To identify our initial Target MARKETS, we start with a lot of guesswork on who these broad groupings of people might be. We’ll drill down to the individual once we’ve identified broad MARKETS that we project our offering will serve.
Using my PHP Advocates example, I’ve taken the main categories directly from my user interface, and used them as headings to identify some broad target MARKETS. The largest pictures are my most obvious markets, in marketing terms known as the “lowest hanging fruit.” The smaller pictures are also potential markets for my app, though these groups seem less likely to use it, at least for roll-out— the initial launch of my software.
Children of Aging Parents are my most likely broad target MARKET. Using demographic data, I limit my groupings to upper-income, working Baby Boomers, because to hire a vetted, knowledgeable caretaker to assist at doctor’s appointments will be expensive. Economic data shows the greatest concentration of educated, working adults between 40 – 70, are in within 30 miles of a major city along the east and west coasts. Most upper-income are still White, though this demographic is rapidly changing. To date, women are 57% of the workforce, according to the latest DOL stats.
Using this visual marketing technique, I project one of my “lowest hanging fruits,” is Children of Aging Parents. This is a very broad target MARKET, with many ‘branches.’ Baby Boomers, especially educated with money, have specific characteristic and behaviors that differ from adults born of the same era, also with aging parent, but who are struggling to take care of their own family, and can not afford PHP Advocates’ premium care for their parents.
Each of these categories shown are potential MARKETS for PHP Advocates. But how did I come up with any of them?
I conceived the IDEA for my PHP Advocates when I was visiting with a friend at her mother’s retirement home near Sacramento. My friend lamented that living so far away, it was impossible to assist her mother at doctor’s appointments, or even get her the physical therapy she needed for her new hip replacement. My friend is a well-paid Hollywood ad executive, and can easily afford to hire help for her mom, she told me, if she “just knew someone qualified she could trustapplication to help a friend get assistance her aging mother.
Wherever your IDEA comes from, there is a reason you thought of it— likely, you noticed a need, like garbage bags that stay on the rim of the can, or you wanted something more, like an faster way to pick a movie you’ll like, instead of blowing an hour scrolling through all streaming content on Netflix or Hulu. like I did when I thought of PHP Advocates.
I already had a Target MARKET in mind when I came up with PHP Advocates. Since my friend and I both have aging parents, I first considered what I want for my parents? What FEATURES would I want in a mobile application that could help my folks? And beyond helping my parents, what kind of help from vetted industry experts, both online and in-person, would I want instant access to?
It is questions like these that must be asked when projecting your initial target MARKETS.
Creating a TARGET MARKETS list, just like your FEATURES and BENEFITS lists, helps you identify broad target MARKETS. But remember, we are never selling to MARKETS. We are always selling to individuals, people, who will likely be interested in our offering. You will derive your Target USERS from your Target MARKETS list, following the construction of list 1A, identifying potential Target MARKETS.
LIST 2A: Identify your Target MARKETS.
What GROUPS of people will find value in the FEATURES and BENEFITS of your product or service?
The initial TARGET MARKETING process follows the same paradigm as populating your FEATURES and BENEFITS lists. We begin with a combination of the bullet POINTS from List 1A— the FEATURES, and 1B— the BENEFITS of our offering, and align each bullet point to groups of potential users.
Each of PHP Advocates’ FEATURES, BENEFITS and solutions translates into SOMEONE who can use them. Let’s consider who these groups of people may be.
Tech-savvy adults who use mobile to conduct business or personal transactions, like online purchases or banking, are a broad, and rapidly growing DEMOGRAPHIC of the global population. What these tech-savvy adults DO online will be far more useful BEHAVIORAL data for targeting potential USERS, but like with all marketing we start with very broad groupings of people, and drill down to the individual.
WOMEN is a broad target MARKET, but an important distinction in the TARGET MARKETING process. Sociologically, or using PSYCHOGRAPHIC data, women are more likely to ask for help over men 2:1, so women are one of the “low hanging fruits” we’ll approach with our advertising and marketing efforts. Marketing to women is usually different, requires different words and images, than marketing to men.
The age range is DEMOGRAPHIC data, and too broad to be particularly relevant. With PHP Advocates, however, this data gives me direction in designing my user interface. The UI navigation on my app needs to be simple for aging adults— simple buttons with large text— since most of the Baby Boomer generation were not weened on technology.
Each of my FEATURES and BENEFITS bullet points serves some group of people. Target MAREKTING begins with projecting, essentially guessing, segmented groups that will likely be interested in our offering.
While most of these projected markets seem to broad to be useful, in fact, like the above example with the age range of our potential Target MARKETS, we get clues, direction on how to design our BRANDING in the future from identifying these mass groupings.
Entrepreneurs often work on their own, and need a wide variety of expert resources to conduct business on a competitive level with large corporations that have teams of employees in each job function. So, entrepreneurs become Target MARKETS for my app.
Many elderly need an advocate on doctor visits to ask the right questions, or help explain medication interactions or procedures to loved ones at home, so elderly become another target market for PHP Advocates. But since there aren’t a lot of tech-savvy Grannies out there, children of elderly, baby boomers, who are working and need an advocate for their aging parents are an even stronger market, one of the most likely group of people who will be interested my offering.
Each one of these FEATURES, BENEFITS and solutions, taken directly from their respective lists I created earlier, solves a problem or an issue, or adds value to someone’s life. Targeting MARKETS, or broad groups of people, is how we begin to identify WHO these people are. But to really get to know them, what they like, and don’t, what attracts them, how to reach them, and effectively manipulate them to do what we want, requires getting personal with the individual.
Video 8, TARGETING USERS is next…