4 Ideas to refine your target market
At Fasttrac we’re working on target market definition. Here are 4 ideas that were NOT in the book that will hopefully provoke a little bit of thinking:
- Build your target experimentally. Instead of pontificating on a Word doc about what your target market is, why don’t you go out and get 10 customers to pay to solve a problem for them? If you do, for some categories of software, you have yourself a target market. Choose this bottom up approach whenever you are competing in a category that allows rapid product development. Heck, you might even want to try Sean Ellis‘ approach of selling something you haven’t built yet. (Kudos to Ashish for coming up with this tactic)
- Make small extrapolations. If you already have a good understanding of some market segments, how about making small extrapolations from targets that already work to define a segment that you can dominate. For example, at Ringio, we have hypothesized that current buyers of Virtual PBX solutions (a commodity, undifferentiated, but popular segment) really need and want a call center product, if they could afford it. And that’s our target: SMBs that appreciate a call center solution but are on a Virtual PBX budget.
- Focus on them, not on you. The best segments are defined by attributes of the buyers, not you. Do they have the inclination, pain, budget and immediacy to buy your solution?
- Irrational > Feelings > Rational reasons. You can rack your brains to define a segment of people behaving rationally, but frankly, a lot of the most powerful decisions are based on feelings such as desire (luxury), fear (security), or playfulness (entertainment). What problem does World of Warcraft solve? It’s the wrong question. Even more powerful is when you play in a market that is not even reasoning about problems, there are simply bigger (and often) irrational imperatives. For example: compliance, government mandates, monopolies and cartels.
photo credit – flickr user law_keven