Imagine trying to sell hiking boots to someone who never steps off the pavement? Or pitching pet food to someone without a pet. Sounds like a waste of time, right? No matter how great your product is, if you’re talking to the wrong people, it’s a lost cause. Yet, many small and medium-sized businesses (SMBs) fall into this trap. They try to sell to everyone, hoping something sticks. The truth is, not everyone wants or needs what you offer, and that’s okay. The real win is to find people who get it and are willing to pay for it.
So, how do you figure out who your ideal customers are? In this blog, we’ll break it down step by step so you can define your target market and grow your business with confidence. Let’s get started.
What you’ll learn
What is a target market?
A target market is a defined group of consumers who share common characteristics (such as age, location, interests, or buying habits) that make them the right fit for your product or service.
Every business, big or small, needs to know who they are selling to. A target market isn’t just a broad group of potential buyers. It’s the people who are most likely to engage with your brand and make a purchase. When you understand this group, you can tailor your messaging, ads, and product decisions to match their needs and preferences. This makes your marketing more impactful and makes sure every dollar you spend is directed toward the right audience.
Why knowing your target market matters
Knowing who to target helps you stop wasting time on people who aren’t interested, so you can start focusing on those who are. Here’s why getting clear on your target market makes all the difference.
Better marketing efficiency
Marketing without a clear audience is like shouting into a void. You spend time and money trying to reach everyone but end up connecting with no one. When you define your target market, you know where to find your ideal customers and how to speak their language. This makes your marketing cost-effective and successful.
More personalized and impactful messaging
People don’t respond to generic sales pitches. They connect with brands that understand their needs and challenges. When you know your target market, you can craft messages that feel personal and relevant. So, no more guessing what will resonate. You can create ads, emails, and social media content that actually speak to the right people.
Higher customer retention and brand loyalty
Attracting customers is one thing. Keeping them is another. According to the Salesforce State of the Connected Customer report, 65% of customers expect businesses to adapt to their changing needs and preferences. When customers feel like a brand truly “gets” them, they’re more likely to buy again, and even recommend it to others. A well-defined target market helps you create experiences that keep customers coming back.
The 4 main ways to segment a target market
Even within your target market, people have different needs, preferences, and behaviors. That’s why businesses use segmentation — breaking their target audience into smaller, more defined groups. This makes marketing even more effective, making sure the right message reaches the right people. There are four main ways to segment a target market:
- Demographic segmentation: This is based on measurable traits like age, gender, income, education, and occupation.
- Geographic segmentation: This is based on where they are located globally.
- Psychographic segmentation: This is based on personality traits, hobbies, beliefs, and attitudes. For example, a fitness brand might market differently to hardcore athletes vs. casual gym-goers, even if they are the same age.
- Behavioral segmentation: This focuses on how customers act, like their buying habits and product usage. Businesses analyze these patterns to offer personalized recommendations or discounts that match customer behavior.
The marketing playbook for small businesses
Struggling to get noticed? This guide is packed with simple, effective marketing strategies to help you grow.
How to find and define your target market
If you’re unsure about who your ideal customers are, you’re not alone. Many businesses start with a broad audience and refine it over time. The key is to use data and research to narrow down the people who truly need and want what you offer. Here’s a step-by-step approach to help you identify and define your target market effectively.
Step 1: Analyze your existing customers
The best way to understand your target market is to look at the customers you already have. Their demographics and behaviors can reveal valuable patterns. You can review purchase history to identify common traits. For example, if you notice that a large percentage of your customers are young professionals living in urban areas, that’s a strong indicator of your core audience.
If you have a customer relationship management (CRM) tool, use it to dig deeper into your sales data. Customer feedback is just as important as numbers. Surveys, interviews, and social media interactions give you direct insights into why people choose your business. Asking questions about their needs and buying decisions can help refine your understanding of what they’re looking for. The goal is to pinpoint the shared characteristics of your most valuable customers, so you can find more people like them.
Step 2: Research your industry and competitors
Even if you’re just starting out, you’re not operating in a vacuum. Your industry has trends, customer preferences, and competitors who are already serving a market. Studying them can give you valuable insights into where your business fits.
Look at successful competitors and analyze their customer base. Who are they targeting? What messaging do they use? Check out their social media and marketing campaigns. Pay attention to how customers interact with them. This can reveal what people like or dislike about their offerings.
But don’t just copy what others are doing. Identifying gaps in the market is just as important as learning from competitors. If existing businesses are focused on broad audiences, there may be an opportunity to specialize in a niche market. Differentiating yourself by catering to an uncommon group can give you a competitive edge.
Step 3: Segment your audience
Once you have enough data, breaking it down into segments makes it easier to target specific groups effectively. Audience segmentation involves dividing potential customers into categories based on common traits such as demographics (age, gender, income), geography (location, climate), psychographics (values, lifestyle), or behavior (buying habits, brand loyalty).
This process allows for more precise marketing strategies. A skincare brand, for example, may have different messaging for teenagers dealing with acne versus adults looking for anti-aging products. By organizing potential customers into clear segments, it becomes easier to tailor products and advertisements in a way that resonates with them.
Step 4: Create buyer personas
A buyer persona is a fictional representation of your ideal customer based on the data you’ve collected. It includes details like their age, job, interests, pain points, and buying behavior. For example, instead of just saying your target audience is “small business owners,” you could create a persona like this:
For example, “Jessica, 34, runs an online boutique and struggles with managing social media marketing while handling daily operations. She prefers easy-to-use marketing tools that save time and improve customer engagement.”
Creating personas makes it easier to craft messaging that speaks directly to the needs and motivations of your audience. The more detailed and specific the personas, the more effective your marketing and product strategies will be.
Step 5: Test and refine your targeting
Defining your target market is an ongoing process. As your business grows, your audience may change. That’s why it’s important to test your targeting and refine it based on real-world results.
Try running small marketing campaigns aimed at different audience segments. Track engagement and conversion rates to see which groups respond best. Use A/B testing to compare different messages and ad placements. You also need to pay attention to customer feedback (like reviews or surveys) and support inquiries to understand what your audience truly wants.
If something isn’t working, adjust your approach. Maybe you discover a new segment that’s more engaged than your original target. Or perhaps your messaging needs tweaking. The key is to stay flexible and keep refining your strategy based on actual data, not assumptions.
To make the most of your marketing efforts, you need tools that provide clear insights into your audience. These tools help you track customer behavior and refine your messaging so every interaction is more impactful. Let’s look at some of the best tools that can help you identify and reach your target market.
CRM tool
A CRM helps you keep all your customer information in one place, so you don’t have to track everything manually. You can see who your customers are and how they interact with your business. It also helps you stay organized by automatically sorting leads and customers into groups based on their interests or past purchases.
This makes it easier to send the right messages to the right people and build stronger relationships without extra effort. For small businesses starting out, Starter Suite is a great option. With customer segmentation and built-in analytics features, you can see what’s working and refine your approach as you grow.
Market research tools
Hearing directly from your audience is one of the best ways to understand their needs. Market research tools help you gather insights into customer preferences and industry trends to shape your marketing strategy. Some of the most effective ways to do this include platforms like SurveyMonkey or Typeform let you ask customers directly about their needs and preferences. This feedback helps you refine your products and messaging.
Tools like SEMrush allow you to study competitors. You can see which keywords they rank for or what content performs well. You can also identify gaps you can fill.
What can your small business do with marketing automation on
Salesforce CRM?
Google Analytics
Your website is one of the best places to learn about your audience. Google Analytics helps you understand who visits and what they do on your site. If certain products or blog posts get more traffic, that tells you what interests your audience most. You can also spot patterns like what devices people use or which locations bring in the most visitors, so you can adjust your marketing to match.
Just get started.
No matter where you are on your journey as a small business owner, you can get started with Starter Suite — the all-in-one AI CRM your SMB needs.
Finding the right customers is one of the most important steps in growing your business. When you understand who they are and what they need, everything — from marketing to sales — becomes more effective. And the best part? It’s not that tough to do. The right tools can help you make informed decisions and reach your audience in a natural way.
Salesforce for small business makes this process simple. It brings marketing, sales, customer service, and online store tools together in one easy-to-use platform, so you can track customer interactions and group your audience based on their behaviors. You can also personalize your outreach to your target market. It’s designed to take the complexity out of customer segmentation, so you can build a business that thrives.
Start your journey with the Starter Suite today. Looking for more customization? Explore Pro Suite. Already a Salesforce customer? Activate Foundations and try out Agentforce today.
AI supported the writers and editors of this article.
