Not quite clear on who your target customers are?
In this video Joel Gerschman walks you through the 4-Step Niche Matrix worksheet which will help you clearly define your most profitable target markets.
Table of Contents
Download the Ecommerce Customer Niche Matrix template here.
Watch Part 1 of Your Target Market taken from the eCommerce Growth Engine course here.
To access the full course, click here.
Nail Down Your Ecommerce Target Market with The Niche Matrix
To help you make strategic choices about your target market, I’m going to get you to fill out what we call your niche matrix, which you can find on the second tab of your strategic planning template. And it looks a bit like this.
Let’s explore it in a bit of detail together.
You’ll see that to complete your niche matrix, you’ll have to work through four key steps.
Step number one is your products and services. Down the left side of the page, you list all of your products or services including the ones you don’t currently offer, but may want to offer in the future.
Number two, you list your customer groups. Along the top of the page list the various customer groups you currently serve, as well as those you could or may want to serve in the future.
To help you identify different customer groups, remember to keep in mind two broad customer characteristics.
First of all, there are demographic similarities. For example, if it’s a business, if it’s B2B, then it’s industry, specialty, number of staff, revenue location. Or if it’s B2C then we’re talking about things like gender, occupation, education, income levels, social class, marital or family status, ethnic background, and so on.
The second key characteristic is what we call psychological similarities. These are things like values, aversion to risk, behaviour, personality, attitude, lifestyle, interests, and so on.
Number three is to consider your geographic scope. As you list your various customer groups along the top of the page, remember to specify their locations whether by suburbs, city, state, or country.
Finally step four, is to evaluate and ultimately decide on your niche. The key is to determine which customer product geographic combination will form your niche.
The 5 key questions you need to answer to identify which niches will be the most profitable
Now, how do you make that assessment? How do you decide on your niche?
Here are some questions to help you assess your choices:
- Profitability – can they afford your product or service? And how profitable are they likely to be?
- Accessibility – can you reach them with your message? Are they easily accessible? Are they hard to reach?
- Market size – are there enough people or businesses who fit your criteria?
- Competition – are there many others out there that might be competing with you for this particular target market?
- Need – will they really benefit from my product or service? Will they see a need for it? If they won’t, it will be hard to get them to buy it. Even if the market is big, even if they’re theoretically profitable, even if they’re accessible and even if there’s not too much competition.
Then your task is in light of that evaluation, is to write a number one in the box that best fulfils those criteria. That is what we call your target market, your niche, then put a two and a three in the next two most lucrative markets. They’re your flanker markets. And you can continue, you can add a four and a five and a six, if you like, but at least identify the top three. They’re going to be your most critical markets.
How to verify and test your assumption
Now, it’s really important to realise, that your target and flanker markets at this point, are simply an educated guess, unless you’ve done some market research to verify your assumptions. And that’s why your next step (ie. before you start running Google Ads), is to verify your thinking with some simple market research. As a starting point, I’d like you to verify who your best customers are right now. What are their demographic and psychological characteristics?
I’m often surprised by how often businesses don’t quite know who their best customers are. And to find this out, one simple and powerful ways to use a basic customer survey. And there are a range of platforms out there that you can use for this. And we’ve added an example in the notes that you can utilise. And the idea is, to send that out to your current customer group, to find out a bit about who they are.
Once you understand who they are, you can have a much better picture of who’s buying your products or services. And as a result who your best customers are. And to maximise take up, you can add a small incentive like for example, a voucher for your store in order to maximise the chance of them fulfilling the survey.
Your Next Steps
And there you have it, that’s your target market process. Quickly summarise your steps.
- Complete the niche matrix on the second tab of your growth plan template following those four steps that we discussed.
- Summarise your target market in a single sentence on page one of your growth plan template. And you’ll see there’s space for you to do that.
- Create and send a customer survey to verify who are your best customers. So you’re, you’re sure that you’re targeting the right people and maximising your chances of success. Good luck.
Access the Full Ecommerce Growth Engine Course for Free
I really hope you enjoyed this training video. If you did, and you’d like to access the full eCommerce growth engine course click here.
Need Help?
If you need help finding your target market and building a cohesive marketing strategy, get a no strings attached 30 min digital marketing strategy session here.
