In the early stages of a business, it’s hard to pass up the opportunity to make money. You have goals for growth. You’re trying to grow your revenue (because bills!) and every inquiry brings you closer to the dream of lounging in a bed of money.

I have conversations with clients and prospects all the time about the work they do, the benefits and outcomes their clients and customers experience, and who they target with their marketing.

Your target audience is a fundamental piece of your marketing strategy because you need a solid understanding of the audience you’re trying to reach (and who you don’t want to reach). That includes the problems they have (that you can help solve), where you can find them, and the language they use.

But how does your target audience compare to the ideal client you want and the clients you actually have? Turns out, each of these might look a little different (but hopefully not too different).

What are each of these and how should you think about them as a business owner? Let’s dig in!

Target market and target audiences

Defining your target market

Every business has a target market that they’re going after to help with their products and services. The target market is the big group of people that you define through analysis of different data points. This process involves looking at your competition, your offering, and, your clients (or who you think should be your clients). There are a number of ways you can use to break down or segment your target market, including:

• Demographics - this includes quantitative data points like age, revenue/income, geographic location, gender, business type (B2B), industry/vertical (B2B), and more.

• Psychographics - this includes more qualitative data such as needs, interests, activities, affiliations, attitudes, and values.

• Sociographics - this digs deeper into the personal profile of needs, attitudes, social connections, and passions. (Very useful in creating audiences)

• Behavioural - this is useful when you have data about how people interact with your products (such as SaaS subscribers) to segment based on usage data/status.

• Geographic - this is useful to segment separate from demographics if you’re dealing with large demographic segments (i.e., North America, EMEA, APAC, etc.)

The first two (demographics and psychographics) are the most commonly used for small businesses that are local in focus. But if you’re looking to expand further, it’s valuable to think bigger.

Defining your target audience(s)

Each target audience is a subset of your target market and they’re the group you craft marketing messages for in various marketing activities.

When you’re a solo, micro and even most small businesses with numerous employees, there may not be resources (money or people) to manage multiple streams of messages without commonalities.

But it’s still important to have a good understanding of the distinct audiences you target so your messaging is relatable.

Target market and audience example:

Let’s say we’re defining the market for a local business that offers virtual assistant services. Based on the research, they’ve defined their target market as follows:

Demographics

• Sole practitioners and micro business owners (may have an employee, but likely just contractors)

• Have a service-based business

• Business has been around for 5+ years, incorporated

• Are in the range of 35-55 years old

• Bring in a minimum of $200,000 annual revenue

Psychographics

• Established business with regular clientele

• Understand the importance of repeatability for scaling their business

• Needs to establish administrative and operational processes

• Don’t have time to learn software/systems and make optimal connections

• Operate their business virtually

• Are actively involved in the community

We could dig into some sociographics for this example if we wanted to, but it isn’t really necessary. Now let’s look at how we can pull out audience segments to target from this market:

• You could divide it up between sole practitioners and micro businesses.

• Business longevity could be a segment if you noticed certain trends that align to younger vs. older businesses.

• How you talk to and about the administrative/operational needs of a 200K business with no employees would be different than how you talk about the same needs for a business that’s bringing in 500K+ and has a team.

This last bullet about revenue reveals an opportunity for improving the target market definition. What’s the high end of revenue in the target market? What is the revenue number that impacts the delivery of the service in a way that doesn’t fit the business model?

Figuring out your target audience can actually help you gain clarity on your target market.

These are just some of the factors you can consider for building a target audience within this target market. In this example, there’s a lot of overlap in the psychographics, but that may not always be true.

The key is to slice up your target market in a meaningful way that allows you to craft messaging for a defined subset of the bigger group so it resonates more fully with them. It’s about addressing the unique needs of the audience you want to reach.

Ideal client profile and personas

Think about the clients you most enjoy and feel energized working with. Documenting your ideal client profile and personas can give you greater clarity as you develop products and services, promote, and then deliver them.

An ideal client profile is a description of the type of business you want to attract as a client. Whereas personas describe the person/people who make the decisions, work with you, or have some stake in the relationship. Personas are valuable because every purchase decision has a human being behind it.

How do the market, audiences, ideal client profile and personas all fit together?

Your target market is the biggest bucket of all. It reflects the full potential of your business growth. Your target audiences are segments of the market.

The ideal client profile makes up the smallest segment of the big picture. They represent the ideal of who you want to attract. It helps you focus what you’re doing in the right direction. Because not every actual client is your ideal client.

This is important because if you have a client that wants you to make a big change to how you work or the product you deliver, and they aren’t even your ideal client, that could have an enormous and detrimental impact on your business—especially if it’s a change that would affect other clients.

From setting your priorities to messaging to addressing client needs, these are tools that keep your business aligned and centered on the customer.

Where do your actual clients fit into all of this?

Almost every conversation I’ve ever had about this has involved some confusion. I ask about the target market or audience and many people will describe their clients. This is common.

Your clients aren’t necessarily in your target market. For example, the target market includes minimum annual revenue of 200K. But that doesn’t mean there aren’t businesses who hire the bookkeeper with only 100K of revenue.

Clients will come to you when your message resonates and your products and services address their need. But they won’t always fit the profile. That’s okay. There may be various reasons you’ve established to decline business from someone who isn’t in your target market.

The only time you need to revisit your definitions is when your client base is wildly different than your target market. This is especially important if you aren’t enjoying the work you do for your clients.

One goal: Know who you want to reach and what they care about

The work you do to define your market, target audiences, and the ideal client is all about designing your business to work for you. It’s about understanding what you don’t want to do/who you don’t want to work with just as well as you know what you enjoy. It’s empowering to narrow your focus to the right people so you can attract the clients and work that excites you!