Small businesses have to define their target markets carefully to maximize the impact of their efforts while minimizing the cost. If you have a target market that is not as precise as it should be, your marketing return on investment might suffer as a result. The process of narrowing your small-business target market might require you to determine the key factors that drive your customers, and to employ a completely new marketing strategy.

Step 1

Examine your current customer base to determine what key factors are common among them. Use customer surveys to identify key factors. For example, say your target market is men ages 25-50. If upon closer examination you discover that 75 percent of those men are white-collar professionals and the other 25 percent are one-time walk-ins and blue collar workers, your target market should be adjusted accordingly. Narrow your marketing campaigns to address the professional segment, as that is where the bulk of your sales and repeat customers originates. Odds are there is more room to grow within that market as well.

Step 2

Employ inductive marketing techniques to break your target market down into more manageable segments. Observe your customers to identify common traits, then expand them into a larger marketing strategy. For example, say after observing your regular customers, you realize that a vast majority live in neighborhood X and that most people in neighborhood X are fans of the local college football team. You might then assume that most of your customers are fans of the local team, then narrow the focus of your next marketing campaign to include advertising within the stadium and TV or radio spots during the game broadcast.

Step 3

Eliminate those portions of the market that do not produce as well as the rest. For example, if you find that 30 percent of your customers are responsible for 90 percent of your sales, you might wish to change the focus of your marketing to address the most productive segment vs. the least. Instead of continuing to market to everyone equally, eliminate the general marketing initiatives you are already running and target the 30 percent who are keeping the lights on and the doors open. This can both reduce the amount you spend on marketing and increase your sales.

Step 4

Change your current marketing campaigns to better address the target segments you have identified. If you are currently running ads in the local paper, but your research shows that your customers get most of their news and information online you might want to shift the focus of your marketing online as well. Although you will reach a smaller audience overall, the audience you do reach will likely bring far more benefit to the company.

Step 5

Evaluate the performance of your new marketing strategy. Review the sales numbers first to see what the immediate impact has been. Calculate the amount you are bringing in vs. the cost of the new marketing to find your return on investment. Contact your vendors or salespeople to get feedback on how the new narrower focus is working, and consult your customers to find out what brought them in and why.