When you go about narrowing your target market, there are a few important things to keep in mind. Following these guidelines will drive success over the long run.
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Well defined – make sure your target is well defined with clear boundaries. The worst thing you can have is a mushy target definition that can be stretched and contorted to fit your needs. Such a target statement will cause you to begin including additional targets because they seem attractive at the time. A tight target will help you keep your discipline intact.

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For example, I started a business selling custom fly rods. Since I had all the components in inventory I decided to sell them as well. My target market was upscale serious fly fishermen. At times I thought about compromising the home page to push components in addition to the custom rods. I was tempted to work hard on improving the components section of the web site rather than enhancing the custom rod section. By having my target in focus I was able to avoid both of these distractions.

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Measured reach -make certain your target market is defined in a way that you can both quantify the audience AND especially that there are marketing vehicles to reach them. When I was VP Marketing for a major on line photo sharing site, we found that our best customers were sentimentalists. These are the people that create scrapbooks, save everything, and cry at weddings. It was great to know this but it also created a huge challenge to figure out marketing vehicles that reached this target cost effectively. Usually, the cost of reach increases when you can’t find a vehicle that targets that market without targeting a large group of others. For example, coupon mailers can be a good vehicle to reach home owners. If you are looking to reach people needing a new roof you have to realize that only one in twenty of those home owners is likely to be in the target audience. Do your best to select your market in a way where there are efficient marketing vehicles to reach them.

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Appropriate size – narrow your target in such a way as to have a market that is not to big and is not too small. In many cases geographic segmentation may be an answer. If the market is too small then the rewards and returns will not match your revenue requirements. If the market is too big then the required marketing investment could break the bank. Marketing is a game of reach and frequency. You have to repeatedly hit your target market with your message at a frequency that creates awareness and comfort so that when they are moving into a buying mode you get considered. If the market is too big then the cost of doing that could be onerous.

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When I ran marketing for a storage company we found that the best we could do to reach a prospect was about $.10 per impression but the closest we could narrow our market was down to relatively affluent adults. With 50 million people in our target market in the United States our cost of advertising at a frequency of 12x per year was $60 million. This was too rich for us. Instead we targeted pockets of population in specific geographic markets.

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High urgency - Sort your candidate markets for those that fit your product or service offering the best. Go for the audience that exhibits the highest need for the solution. Go for the one that will be most excited about getting the fix. You need to get through the evaluation, assessment and denial phases with your prospect as quickly as possible. The more obvious the solution to a known thorn the faster this will occur.

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When I was product manager at Texas Instruments we launched a calculator that did nothing but convert numbers between decimal, octal, and hexadecimal. At the time the only solution software developers had was to do the math by hand (or IBM mainframe). The product was a huge success and literally sold itself because the need was so great and the solution so perfect.

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Good channels of communication -look for a market that has good avenues of communication. The way you are going to lower your marketing costs over time is through word of mouth. This is why companies that own market share have trouble losing it, even when the screw up. You want to build word of mouth fast. Word of mouth is a factor of how interesting your product or service is to the audience and how much and frequently the audience communicates among themselves.

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At the storage company, we found that communications about moving and storage was not strong. There were few web sites, no affinity groups, and people didn’t talk about it at cocktail parties. What we did find was that real estate agents do talk about it, especially with their clients and we found that having a storage box sitting in a person’s driving spurred conversation that wouldn’t otherwise have occurred.

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With efficient communications you will have to invest less in marketing and you will be able to drive your marketing costs down more quickly than otherwise.