Most entrepreneurs identify a target of sorts, typically a category of business. Then, satisfied that they have covered target marketing, the thoughts turn to physical elements such as the logo, the tag line, and so forth.
Narrowing the target takes research and input from the customer. Broad targets take away the fear of missing an important segment of the audience. Sometimes, even if the target is well planned, other people can raise doubts and create obstacles.
One 50-something entrepreneur I know took her business plan to the bank; she’d invested more than $100,000 of her own monies and needed additional capital for manufacturing. The banker, a young MBA argued with her about the target. “I’m afraid you’re missing the boat,” he said. “Young urbanites with kids are a better target; there are more of them.”
My friend explained that her feedback had indicated the primary purchaser was a 53-year old boomer grandparent. She pointed out that the younger audience, when surveyed, used price as a reason not to buy. Because her customers said differently, she refused to change the plan.
The discussion resulted in no loan. Each person thought that they were right in their stance. Of course, if the banker were wrong – and even if he provided the loan – he would simply be wrong. The entrepreneur would still be out the time and money.
Incidents like this remind entrepreneurs to target carefully, review customer feedback often, and be prepared to defend challenges to assumptions. When a stakeholder, such as a banker, challenges your critical assumptions, are you prepared to defend your premises?
If you're into thinking about business from the financial standpoint, you might enjoy looking at the recent
Carnival of Financial Planning which caused me to think further about banking, target markets and entrepreneurship.
Labels: critical audience: stakeholders, entrepreneurs, target marketing