Expand Your Small Business By Narrowing Your Target Market

While it seems counterintuitive, targeting a smaller market may actually reap greater rewards. Consider whether decreasing your target market can increase your sales.

Small business owners hear a lot about the “target market,” but for good reason. Business owners need a profile of their customers in order to make the most effective marketing decisions. However, many small business owners fail to effectively narrow their target, market which could have long-term negative effects on their business.

A common misconception about defining a target market is trying to appeal to the widest possible customer base. For instance, a restaurant owner may think, “I serve food, therefore my target market is anyone who wants to eat!”

This example may be simplistic to express the point, but it illustrates how many business owners do not narrow their target market. In the restaurant example, the chef may specialize in gourmet Italian cuisine. Therefore, the restaurant owner would want to narrow his target market to individuals and couples (not families) who have more spendable income, are more educated, and spend more time looking for finer “boutique” restaurants.

What must a small business owner do to find their business focus and cater to a more narrow market base?

Find Your Niche

Much like the above restaurant example, you must find that you are best at, and focus your business on it. Is it fine Italian gourmet cuisine? Is it exotic flowers? Perhaps voice lessons for karaoke singers?

Whatever your business is, remove anything general about it. Find the specifics that make your business stand apart.


What makes you a better florist than your competition? Why should an aspiring singer hire you? Market to your strengths. Differentiate yourself by becoming an expert in your service industry or specialize in harder-to-find products.

Even retailers can differentiate. For instance, a music store can differentiate by selling used, as well as new LP records.

Do The Market Research

Don’t think that differentiating and finding a niche are enough. You must do the market research to back up your hypothesis.

In fact, you may want to perform extensive market research before you make a decision on moving toward a specific niche market. The research could reveal that a perceived niche has a very low market base and not worthy of pursuit.

If you do perform market research for this purpose, hire a professional. Find a consultant or spend the money on an experienced market research firm. Their results will be worth gold when you find the underserved markets you crave.

Define Your Customer

When you have decided on or consider a niche, define the specific customer for that product or service. This requires asking a lot of questions:

  • Male/female? – You could narrow to specify only a specific gender, such as women’s garments or men’s haircuts.
  • Specific income range? – Be specific. Think $50,000 – $75,000, not $20K to $100K.
  • Type of occupation? – Is your narrowed customer a white collar worker? Blue collar? Banking or finance industry? Perhaps real estate? Be specific.

Think of more questions that can narrow your customer, like how many children? Homeowner or renter? Associations or clubs? Married or divorced? Read books or magazines?

These questions will give you the type narrow audience to whom you will be better able to send marketing messages.

Sell at a Premium

When you find a niche, discover how to differentiate, and do the market research to find your specific customer, set your prices accordingly. One thing that may help you attract a more narrow market base is by setting your prices at a premium. Anthropologie, the womens apparel and home goods retailer, is a prime example of narrowly targeting a specific customer niche and charging premium pricing. They know exactly who their customer is (affluent woman in her 30s – 40s who has children, income of $100k+, and lives in the suburbs but wants a wanderlust, bohemian, and jet setting lifestyle) and how to price their goods.

This is not to say you should simply raise prices. Find what makes your product or service special, and raise the price because it is worth the extra money. You may be surprised at how many more customers you attract because people want the best.

se these techniques to get your target market narrowed down with pinpoint accuracy. When you have a more specific market base, you are likely going to find that your business expands because you reach more of the right people who want or need your products.

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