Marketing 101 for SMEs: Identifying your target demographics

Marketing 101 for SMEs: Identifying your target demographics

Polly Kay

Polly Kay
5th February 2019

Understanding your target market demographics is the cornerstone of every effective advertising campaign, and this information should form the basis of all of your marketing activities for both brand-led approaches and direct response campaigns alike.

If you are trying to sell your goods or services to a demographic that isn’t interested in them, or if your approach to marketing to your chosen demographics isn’t appropriate for the group at hand, you will not only compromise your chances of increasing your yield but also potentially alienate the very prospects you are trying to reach out to as well.

Identifying your target demographics effectively and knowing how and where to reach out to them can help to get your business off the ground, increase your sales or expand your reach – or all three. This is just as true for SMEs as it is for big businesses, and the same principles that marketing professionals use to identify their target demographics apply to businesses of all sizes, which means that when you know them, you can make them work for you.

In this article, I will talk about the importance of demographic targeting, how to identify your target demographics, and how you can use this information to market to your chosen audiences effectively.

What is a marketing demographic?

A demographic is a specific segment of a wider population that shares certain characteristic traits that enable them to be grouped together as a set of people with enough commonalities to comprise a target market.

The shared common characteristics that unite any given demographic can be variable and depend on what is known or can be ascertained about the prospective demographic in question, and what information is useful for the business collating it.

Marketers may use just one metric to ascertain a demographic – such as geographic location, age group or gender – but generally, several key commonalities are required to establish a useful demographic that the business in question can use as the basis for marketing and advertising targeting.

How broad or narrow can a demographic audience be, and why?

A demographic audience can be as broadly or narrowly defined as the available information permits, and as is useful for the business in question.

At its roughest, gender, location, age group or a specific shared interest can form the basis of a demographic, but for many applications, very broad shared commonalties such as these don’t provide enough insights or information to form the basis of a demographic targeting campaign.

A much narrower demographic might consist of a group of people who share several traits that are both niche-specific and of value for marketers targeting them, such as age range, disposable income, a shared hobby or interest, past purchasing behaviours and geographic location.

Whether any business or campaign can benefit from using broad demographic profiles or more narrowly defined ones depends on a wide range of factors, including what information is available, what the business is selling or doing, and how effectively any given demographic can be targeted using the information available.


How can you identify or determine your target demographics?

Before you can decide what information on your demographic groups will be useful to you and establish how best to target them, you first need to understand how to go about identifying and determining who your target audience is, and what they have in common.

This research stage of the process is where you will begin to identify the commonalities between sectors of people who purchase from you, express an interest in doing so or otherwise reveal themselves as viable prospects, either as individuals or as groups. This information forms the cornerstone of demographic targeting campaigns, dictates how you will target the group or groups in question, and even informs when and where you will do so.

Getting things right at this stage is vital, otherwise, the work you do later on will be wasted, as will the money you put into targeting your chosen demographic groups.

Here are some tips to get you started with finding and identifying your target demographics.

  • First up, looking at your existing and previous customers is the best place to start when building up information on demographics to target, as these people share one very important uniting factor – you know that they are already interested in what you do, because they have demonstrated this. Learning more about who already buys from you and why, and what they share with each other is vital information that can help you to learn more about your target audience and find more people like them.
  • Next, identify your main competitors and check out who they sell to and how. The tone and style of their website, customer communication, promotions and offers and the channels that they advertise on all tell you things about who buys from them and why, which can help you to build up demographic profiles of your competitor’s buyers so that you can target them in your turn.
  • Examine the USPs of what you offer or how you offer it. What makes it, or you, different from competitors, and what can you offer that they don’t? Who might these USPs provide advantages for so that it would make them more amenable to purchasing from you?
  • Keep your finger on the pulse too, across social media channels, online chat forums and tools like Google Trends and Google Alerts to find out what’s happening in the wider industry or niche you serve, what people are looking for, who is offering it, and what is generating – or preventing – sales.

Identifying a gap in the market or customer pain points that you can negate is valuable at any stage of the sales funnel, but if you can find out information like this whilst establishing your target demographics, your ultimate audience picture will hold a lot of value for the future.

Demographic research: What you can learn from your buyers and prospects

When you’ve started to piece together a picture of your target demographics and built up a profile of what they have in common and why, the next step is to fine-tune your findings, ensure that they are accurate and relevant, and look for ways to improve your understanding of your target market.

The best place to do this is once again, to look at your existing customer base and people who have bought from you in the past, because this resource offers a rich pool of information and insights that can help you to sell more effectively to your existing customers, and other people who are like them too.

Begin by establishing what you want to find out and why; and how this information will be useful to you. The more specific your “what’s, where’s and whys” are, the more useful the information you gather will be.

For instance, simply asking buyers how they found you is likely to result in a lot of useless data that largely states things along the lines of “on the internet” or “Google.” What you really need to know is what these buyers were looking for when they found you, the search terms they used to do so, what made them click on your website link and not someone else’s, and what made them complete the buyer journey and check out when they did ultimately get to your website.

Asking buyers what they like about your business and what they would like to see changed can return a broad swathe of important data, but it may also result in vague or meaningless answers for the purposes of your research, because the question is too vague and open-ended to provide useful information.

A better alternative might be asking buyers what was important to them when they made their purchasing decision, demonstrating your USPs or advantages such as free shipping, expedited shipping, free returns, a competitive price, availability of discounts, and other key points that your buyers can select to reflect the factors that swayed their purchasing decision.

Information like this, and understanding why something is important to one group but irrelevant to another can help you to determine the commonalities and divergences in preferences of different types of consumers, and add insights into how they differ from one another in order to distinguish different audiences from each other more effectively.

Knowing how to convince your buyers and prospects to share the information that you want to know can be a challenge, because your buyers are unlikely to see helping your business to improve as a good enough reason on its own to give up their time and personal information to help you, even if they are fully behind your brand.

This means that reaching out to your buyers and incentivising their participation in your poll, survey or request for feedback is something you will also need to plan carefully, in order to ensure that you get enough responses to be useful and that the information returned to you has genuine, real-world applications for your business.

Feedback forms after a purchase or as part of a confirmation email are much more likely to be effective if incentivised with a free gift or discount, because they offer value to the buyer after the point of purchase.

Information that you collate from buyers as part of the checkout process can also be useful here and give you the chance to add a couple of questions or requests for comments at check out. However, there is a very fine line between taking an opportunity to gain information, and making the checkout process and the amount of time prospects have to spend on it, as well as the effort they have to put into it and the personal information that they share, too onerous or intrusive and so, causing them to abandon their cart and shop elsewhere.

Running promotions and giveaways on social media and across your own online collateral in exchange for some personal insights can help to get information from prospects and potential prospects too, as can integrating the use of customer comment and feedback forms on your own website and customer emails.

Collating enough information to find out more about what your buyers want, or how what they want changes and evolves takes time, and is something that is apt to be in a constant state of flux. Preferences and trends change, industries advance, and new competitors enter the market all the time, and so working with the most up-to-date information on your prospects and customers is vital in order to ensure that the data is relevant and doesn’t steer you astray.

This means that you should factor in ways to collate feedback, invite comments and interact with customers and prospects into your website, social channels and other collateral too, so that you have access to comprehensive, relevant and timely data sets and insights when you need them.

What information should you gather about your target demographics?

Determining the insights and information that are important and separating it from the white noise in the background can be a challenge, and this is also a very highly loaded endeavour because concentrating on the wrong traits or falsely inflating the value of a certain commonality or trait will set you off on the wrong path, and mean that you won’t be able to target and market to your demographics effectively.

When you’re determining your demographics and what they have in common (as well as points of divergence that enable you to establish different demographic groups to target) the more information that you can gather in the first instance the better. Finding out as much as you can and seeing where the different uniting factors that your pool of targets share overlap can help to point you in the right direction, identify areas to explore that might not otherwise have become apparent, and rule out things that aren’t pertinent to your goals.

If you find something erroneous that a significant number of your targets have in common with each other, this can perhaps provide the most acute insights of all. For instance, if a relevant proportion of your research pool all share an interest, hobby or buying pattern that doesn’t gel with what you expected or that is very different to that of most of your other buyers or demographics, this certainly bears further investigation. This may help you to identify a new market, a particular buzz, or even a new or novel use for your product and so, a new way to approach selling it.

Here is a list of some of the types of information you should attempt to determine about your demographics at the outset, and which you can later winnow down to cut out things that aren’t relevant in favour of concentrating on what is.

  • Age
  • Gender
  • Location
  • Disposable income
  • Level of education
  • Home ownership status
  • Family and marital status
  • Occupation or industry
  • Race or ethnicity
  • Interests and hobbies
  • Pain points and needs
  • Browsing device and preferred method of using the internet
  • Use of certain social media channels and other online portals

Lots of folders containing information

How to use this information to market successfully to different types of demographics

Taking a funnelling approach to building your demographic sectors enables you to divide your initial broad pool of prospects down into smaller segments for more effective personalisation, and will often instinctively allow you to shake down your pool of prospects into distinctive groups that can form the basis of demographic targeting.

The first and broadest strokes to paint include things like age group, gender, income bracket and geographical location, but this information is only useful in and of itself if it is relevant to you. For instance, if you sell a universal product and sell it remotely and nationally, geographic targeting isn’t likely to be the best approach for you – unless your research determines that a significant number of your buyers and prospects are all concentrated within a narrow geographic range, and you can find out why this is and if it is relevant to making sales to them, or to emulating this success in another region.

Even insights into your prospects’ ethics and preferences can form the basis of demographic targeting, such as if your buyers consider themselves to be green consumers who would prefer to buy from a company with a neutral carbon footprint, and a commitment to using minimal packaging and the ethical treatment of their workers and suppliers.

When you are clear on what your different demographics want, you next need to concentrate on how you can express to them that you have it, which means choosing the right portals to share this knowledge and the right approach to doing so.

What constitutes an effective sales approach for any given demographic is something that needs to be driven and informed by your demographic themselves, and their existing preferences.

For instance, if one of your audience demographics is tech-savvy gamers, you’ll probably want to use niche industry language and terminology and get your content shown on gamer forums, in-game ads and industry websites that your prospects already use.

Sending out the same core message across different channels and in different language will appeal to (or alienate) a different cross-section of the wider community, which is why personalising the message as much as possible for the demographic in question is vital. It is also why very broad demographic targeting is less likely to be effective, because by its nature it cannot be personalised to appeal to everyone. 74% of consumers are frustrated by content that isn’t personalised and relevant to them, and targeted, segmented emails generate 58% of all revenue.

Common demographic targeting mistakes to avoid

Building up a strong and accurate picture of your target demographics is the foundation upon which the rest of your marketing endeavours are built, and ensuring that your information is accurate, up to date and relevant is vital.

Working with out-of-date data, not enough information or a research pool that is too small to represent a true picture of your demographics will all herald the premature end to any campaigns built around them.

Playing it too safe on the personalisation stakes so that the tone, style and message transmitted to each demographic is vague or irrelevant to them is another problem that many marketers and particularly, the owners of SMEs make. Putting a lot of time, work and potentially, money into targeting just one narrow niche demographic can be risky; if you get things wrong then your hard work will go to waste, but even a campaign that would otherwise pay off can crash and burn early on if you are overcautious and trying too hard to please everyone lest you lose one or two sales.

However, if your audience insights and targeting approach are right for the demographic in question, use them to personalise your content to its full extent, and if not, go back to the drawing board rather than watering down your message to the point that it is no longer heard. Marketers see an average uptick in sales of 20% when the experience is personalised, but that personalisation has to be effective.

Used effectively and ensuring that the foundations of the information you collate on each demographic is both accurate and relevant, any SME can build up valuable insights on their buyers and prospects to increase their yield and enable them to get the best possible ROI on their advertising spend.

Demographics are something that should be reviewed and fine-tuned regularly to ensure that they are up to date and relevant, and this is something that you should factor into your business’ marketing and plans for growth in both the short and the long term.