Beyond the Pitch
How to Identify Your Largest Target Audience – Part 1: Know the Territory
“You can talk all ya want but it’s different than it was…No it ain’t, no it ain’t , but you gotta know the territory.” – Meredith Wilson, The Music Man
The Music Man, Meredith Wilson’s classic Broadway hit now in revival, tells of Harold Hill—a rascal marketeer who could sell uniforms and band instruments to an entire town on the promise of musical training when he could neither sing nor play a note.
While Harold Hill is the antithesis of a role model for modern-day marketing or sales leaders (even though he does redeem himself in the last act), he is an entrepreneur who really understands his market and the problems his customers want to solve (small-town parents in 1912 who want to keep their sons busy and out of the pool hall).
To Find Your Target Audience, You Gotta Know the Territory
Investors look for companies that have credibly identified, large, reachable markets that are big enough to generate better-than-average returns.
Once there’s a large enough market, investors will measure and evaluate business plans based on the size and potential of that market that a startup can capture in three to five years. (That share of the market is called Serviceable Obtainable Market (SOM); learn the details here and here.)
The only way a startup can reliably size the SOM is validating assumptions and features through prototypes with customers. Those are the people your target audience needs to represent.
Use Surveys to Narrow SOM to Your Target Audience
Survey the segments of your potential target audience that are most important for your product to take off. This may mean taking some educated guesses about who your survey audience should be, and then validating that they are, indeed, your target through the survey itself. Remember that surveying or interviewing people you don’t know is more effective than reaching out to those you do know.
Target audiences include four broad segments. Your target audience may include one or all four categories. The first two, users and buyers, are internal to your customer organizations. Although channel partners and suppliers are external, they can be as critical to your success with a customer as any direct department or employee. It often makes sense to start with the user and/or buyer surveys, but you should understand all four segments and how they might influence your product/service.
- People who use the solution themselves
- They may or may not be the actual buyers
- Those who actually pay for the solution—the expense comes out of their budgets or they approve users’ budgets
- They may be vendor selection committees
- They may be corporate or division procurement or purchasing departments
- Channel partners
- Resellers, manufacturer reps
- End-to-end solutions providers
- Entities that provide product or services
Quantitative methodologies work well for market validation and for testing features, especially if the product isn’t definable or defined well enough to define in a prototype. Large anonymous samples are effective for consumer products and broad non-selective markets; however, quantitative research can be very expensive for highly targeted, less general markets.
The cost of a survey is most influenced by the scope of demographic filters and the pre-qualifying questions applied. Options include panels, online survey respondent databases, targeted emails, and LinkedIn message campaigns, to name a few.
Qualitative methodologies are ideal for problem validation. Interviews and conversations invite open-ended exploration and back-and-forth probing to allow for a deep understanding of smaller, highly selective target markets. Use a discussion guide to outline what you want to uncover and keep the interview on track, but keep the conversation casual and flexible to make the interviewee comfortable and willing to share their thoughts and opinions. You may find the most valuable qualitative feedback you receive is something you hadn’t even considered in your original discussion guide.
Qualitative research can cost nothing and is great for B2B (business-to-business) solutions, senior executives, physicians, and other hard-to-reach audiences. LinkedIn, professional societies, colleagues, and trade and research groups are good sources of networks for qualitative surveys.
Think carefully. Spend the time and make the effort to get your target audience right.
The ultimate question you seek to answer is: Is there enough customer interest to build your product? Do you know your territory?
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