Five questions to help you choose your target market

Ken Rosen is an important part of our {grow} community and a wonderful strategic thinker. Today he graciously offers this guest post on choosing the right target markets:

A Sales and Marketing Credo: “If you want to sell to me, solve my pain. And if you want to talk about my pain, do it in my language.” To market effectively, you need to talk to someone. But if you try to talk to everyone, you usually connect with no one.

To solve pain for customers you must choose some audiences…and not choose others. And stakes are too great to leave this to chance. This is one of the most important marekting decisions your company will make.

So what is the best way to pick target markets? We use five criteria. We call them “Market Success Factors” or MSFs … because every consulting firm needs a few juicy acronyms, right?

You obviously need to start with candidate customers groups. How wide you cast your net depends on schedule, budget, and selling experience. For one enterprise storage vendor, we literally started with every NAICS code (the new name for SIC codes). For young companies, we might build a set of 12 with the management team.

Next, evaluate each market against the Market Success Factors. At Performance Works, we use a five-point rating scale. Use what you like, but to keep things simple, a high rating always means “attractive.”

  1. How intense is prospect pain in the area you serve?
    If the pain from the problem you solve isn’t setting prospects’ hair on fire, if they don’t think about it almost every day, your sales cycle will be longer. Personally, I greatly prefer customers who use words like “pain” over “need,” but both trump “desire.” Sell aspirin, not vitamins.
  2. How well do you solve that pain?
    This is where most companies are most comfortable, because it is the most inward-looking question: Do we solve the problem? For too many companies, a “yes” to this question implies “Ok, let’s hire the sales force and start advertising!” We humbly disagree. It’s one of five criteria and you’re not likely the only firm solving the problem.
  3. How strong is competition?
    This criteria is pretty obvious, so I’ll only refer you back to the statement ” ‘5’ always means ‘attractive.'” To make comparisons make sense when you add up totals, a hypercompetitive environment gets a rating of “1.”
  4. Can you actually close deals?
    Many companies think about the problem they solve without worrying about whether they can actually reach a decision maker. Maybe she only buys integrated products. Maybe she only buys from F500 companies. Maybe she hasn’t changed vendors in 10 years because the cost to change is too high. Maybe the ideal market is fragmented and requires a sales channel too expensive for this stage your development. You have to convert someone who needs your product into someone who buys your product.
  5. Long-term value of the market
    Market selection doesn’t mean you cut your growth aspirations. Far from it. It means you believe the fastest path to growth is by saying something compelling to someone specific. So our final criteria: What is market growth? Will success lead you to adjacent markets (Geoffrey Moore’s “bowling pin strategy“)? Does one market offer better-known references? Does your team have special background that makes success easier?

If you’re tempted to weight criteria or sub-topics under each criterion, I won’t discourage you, but after doing this for too many markets to count, I’ll tell you a secret: It probably won’t matter. If you apply this approach to 8-15 candidate markets, here’s what’s likely to happen: 3-5 markets will rise to the top with almost equal scores. And you can only focus on 2 or 3 (maybe 4 if you have significant resources and a segmented sales channel). So use management judgment as the final cut.

Finally, what data do you use to rate markets? Here’s one more secret: talk to decision makers. Yes, just talk to them. One-on-one at first, then maybe focus groups and later, for validation only, you can use surveys. (FYI, here’s our view of when to use surveys.) If you don’t try to sell them anything (so no, your reps cannot do this step), people will tell you what they need and even how to sell to them.

When we do market-selection for clients, we start decision-maker conversation with, “I don’t want to sell you anything or change your mind. I just want to know what matters to you.” Executives routinely spend an hour on the phone with us, tell us we can call them back, and say they are surprised how much the enjoyed the conversation. Why? Because they got to talk about their world and what matters to them.


  • Commit to focus: solve the pain of a specific market and speak to decision makers in their language.
  • Pick markets based on the Market Success Factors above. Get data by talking to potential customers in non-selling situations.
  • Align all your functions (Marketing, Sales, financing terms, product or service design, etc.) with your target markets. Remember, this is not a strategy to stay small within a niche; it is usually the fastest path to scale.

Ken Rosen (@ken_rosen) is co-founder of Performance Works, bringing the voice of stakeholders (and a little magic) to executive decisions. He blogs at Performance Talks.

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  • Very good framework.
    Using “pain” over “need implies that customers are buying only for utilitarian reasons. There are always emotional and rational reasons why they buy any product. We need to ask, even if their hair is on fire, what do they look in a product.

    In competition let us not just look at competitors but also include alternatives. Sometimes it s just hard to break the status quo.

    I agree with market growth modeling and would add that it needs to be tied back to point-4. If the market grows, can the business develop channels to take advantage of it?

    -Rags Srinivasan

  • Choosing your target marketing and target audience is an important first step to any marketing strategy. It ultimately determines everything that comes next. Don’t take this step lightly, and be sure to do your research.

  • Another hit Mark, you are on a roll with your recent posts I believe. I love the “You have to convert someone who needs your product into someone who buys your product.” – it is a tough lesson to learn and we are gradually realising what this actually means, many thanks for reinforcing it here.

    Also like the “speak in their own language” another one which doesn’t happen from one day to the next, but is an important process we are going together with our users every day.

    But Mark, you know what’s really interesting? I have a guess that this post was inspired by yesterday’s post. Is that right? Anyways, the combo – whether planned or spontaneous is awesome. Love them both –> in the Buffer it goes 🙂

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  • Hello all. First, THANK YOU to Mark for allowing me to offer this guest post. Mark is always has amazing willingness to pitch in to support colleagues. Many of us notice it…and appreciate it.

    Leon: Delighted you found the post to be a “hit.” And your laser focus on the point of converting “someone who needs” to “someone who buys” feels dead on. I remember one client CEO who was sure about going after a single target market. She KNEW they needed her firm’s solution. In the interest of “saving time,” she would only allow us to analyze that market, not cast a wider net. The problem? She was right. They needed it so much they had solved the problem a different way 15 years ago. She had no chance. The company soon folded. It was years ago and I still kick myself for not being able to persuade her to take the broader view.

    Nick: You and I are clearly on the same page. Knowing your market is a staggeringly powerful and focusing force.

    Rags: Glad to hear the framework works for you. Your focus on “pain” is a point of debate even within Performance Works. One of may partners, Ron Weissman, pokes me regularly to also talk about “opportunity.” And although he is on target of course. Yet on a practical basis, I usually include “desire to grow” (our host Mark’s specialty!) as a “pain perceived by execs as pressure to grow.” Why? Because as you say, selling is easier when a prospect’s hair is on fire. It gets their attention! I’m working with a CEO whose board WANTS him to focus on opportunity, but he chooses to focus on cost control. To move ahead on BOTH fronts, we need understand his pain–and show how growth really SHOULD be part of his priorities.

    To other readers, I’ll keep checking back for comments so please don’t hesitate. Your perspectives on what you find useful are extremely valuable!


    Ken Rosen
    Performance Works

  • Nice post, Ken! I find that a lot of people are doing social media marketing blindly, and then complaining that it’s not working for them (no conversions).

    Knowing who your target audience is, and what you have that they want/need is step one. Next, craft your message to appeal to a problem they have that you can solve. Without those first two elements in place, everything else you do is wasting valuable time and energy.

    Over time, I have to keep revisiting steps one and two, and tweak, tweak, tweak according to the market and the competition.

  • Michelle,
    Thanks for the kind words. I think you’ve hit on the ideal longer-term view: go through all five steps to select your market and then iterate madly and obsess daily on points #1 (how critical is your customers’ pain) and #2 (how well do you solve that pain). If you know those two better than anyone else, you’ll have much less to worry about on #3 (competition), right?!

    Thanks again, Ken

    Ken Rosen, Performance Works,

  • Michelle,
    Thanks for the kind words. I think you’ve hit on the ideal longer-term view: go through all five steps to select your market and then iterate madly and obsess daily on points #1 (how critical is your customers’ pain) and #2 (how well do you solve that pain). If you know those two better than anyone else, you’ll have much less to worry about on #3 (competition), right?!

    Thanks again, Ken

    Ken Rosen, Performance Works,

  • Great questions, and great post Ken! I find your thoughts to provoke a commitment from both the consumer and the product/service provider. I tend to offer takeaways first, then provide further information when choosing who I’m able and willing to work with. Thank you for sharing your view!

  • Anonymous

    Great questions and great post! How Intense is the Pain? Is a great question. As I like to say, the bigger the pain, the bigger the sale. I also like how you advise the reader to carefully select their target audience – talking to everyone is talking to no one.

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  • You’ve highlighted burning questions that everyone want to know the right questions!

  • Jeff: Thanks for your comment and love your “the bigger the pain, the bigger the sale” mentality. We’d probably also agree we could add “…and the shorter the sales cycle!” Of course, I also completely agree that trying to talk to everyone is indeed talking to no one.

    iCheap: Thanks much for coming by and taking time to comment. It seems we’re on the same page about what we need to know about markets.


    Ken Rosen, Performance Works

  • Thanks for your comment.

  • Ken, this an excellent post, and if people try what you outline here, they will see it works. That’s always very exciting finding something that works. The only thing I might add is, if your customer has a pain, sell them a pain killer, not a band aid……. maybe that’s obvious…… I’ve just had a week of telling people quite specifically what pain I am trying to kill (problem I am trying to solve) and having them try and sell me something inappropriate and off topic.

    Congratulations for guest posting on maybe my favorite blog. Great choice Mark.

  • You’ve made my day! Thanks for that nice compliment Caroline!

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  • Thanks Mark for those very action-able tips! I think the most credible marketer is the one who IS the audience: A person who feels the same pain or have been suffered from the same problems over and over again. Someone who listen and understand like-minded people, craft tailored made solutions and communicate to people as if they were talking to a friend on an equal relationship basis, not a top down communication style used by so-called “gurus”, experts or stars.

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  • Omar Von Gimbel

    The part about speaking in their language is so crucial. I try to make my message not only attractive to my target audience, and REPULSIVE to everyone else.

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