Why a smaller target market is more effective than a larger target market
There are times in life when smaller is better.
This is especially the case when it comes to condiments and spices.
As my poor long suffering other half will attest to.
But, one thing not so obvious is that more defined (and thus smaller) is also better when it comes to our target market for our app (or any business!).
And this is the reason why creating apps that service very niche markets can be very profitable.
By directly targeting that niche, you are creating a product that more effectively solves the needs of your market.
You are also able to better appeal to their needs and thus get a higher conversion on your marketing dollars.
But let me share with you a story to show you what I mean. 🙂
Let’s say Jack and Jill are selling the same product.
Jack has a very broad (and large) target market, in the range of 10 million people.
Jill on the other hand, has defined a very specific market and is only targeting 100,000 people, which she has done by better defining exactly who her target market is.
When I say she better defined her target market, I mean she created a ‘persona’ of who her ideal client was and targeted this.
Some of the questions she asked herself were:
• What age are they?
• What do they wear?
• What car do they drive?
• Do they have kids? If so, how many?
• Where do they work?
• What is their annual income?
• What food do they like to eat?
• Are they male or female?
• What is their hair colour
• Etc. etc. etc.
The more defined the better ^^.
But back to Jack and Jill…
So Jack and Jill both put aside $10,000 on marketing.
The problem here is that Jack has to go through many more people before he finds someone who is in the ‘buying now’ category.
His advertisements are also very generic as he is trying to appeal to such a broad range of people.
Because of this, he is finding trouble ‘identifying’ with his market and a very small percentage, only around 0.04% actually take the next step and enter his sales process.
Of that small percentage, only a small amount take the final step and purchase his product.
But those aren’t the only problems Jack has.
Targeting such a broad market, he also has many competitors in a range of product areas all targeting the same market.
So there is much more CLUTTER.
Again, meaning he is literally throwing away his marketing dollars.
Jill on the other hand, had a different story.
Because her market was so defined, all her marketing materials struck a chord with her market.
It rang bells!
They identified with the message she was sharing, and they on average were much more willing to purchase the product.
This product also had a greater perceived value to this smaller group, so they were willing to spend more to purchase it.
Basically, Jill spent less on marketing, had higher conversion rates and sold her product for a higher price.
But the story continues…
She then tweaks her product and creates a whole new advertising campaign to reach another well-defined target market.
Jill also happens to be a smart little cookie and has created a group of processes and people that allow her business to run itself.
So she goes away on vacation to Hawaii, sips cocktails and relaxes on the beach.
She comes back three months later to find her business in a better position than what it was when she left.
Wanting to move on to a new venture, she sells her business for a large multiple of its annual income.
After all, she had created a turn-key business, where someone else could walk in and start printing their own money with very little effort on their part.
Poor Jack though is still working 60 hours a week jumping up and down trying to get peoples attention to buy his product.
The moral of this story is bigger is not always better.
And that specific is better than broad.
Execute your marketing strategies with piercing effectiveness and you will find that pound for pound you get a much better return.
To your app success!