Business
How Financial Institutions Can Identify Their Target Market
Global Banking & Finance Review®
Company
Financial institutions must identify their target market by assessing current customers, defining services, and considering demographics.
Whenever you come up with a business idea, there are some factors that you need to keep in mind before actualizing it. For one, you need to have enough capital to run important operations for the first few months before you start reaping profits.
Perhaps the most important of them, though, is your customers. To whom are you planning to sell your products or services? What problems are they facing? How are you going to provide a solution? The first step that every company, regardless of the field, should take is to nail down this aspect.
Unfortunately, many businesses have failed to pick up because their founders were not able to identify the right consumer group in their marketing strategies. This article will discuss a few important tips on how financial institutions can identify their target market and make the most of it.
What is a target market?
If you are keen enough, you’ll notice that the commercials that run on sports channels are sometimes different from what you see on TV stations. Why is this the case? There are many factors that marketers consider before investing in advertisement, and one of them is the target audience.
Target marketing is basically the act of aiming certain products and services toward a given category of prospective customers. A good sales strategy example that can explain this further is the mainstream media advertisements. For instance, marketing sports-related content on sports channels will generate more leads than doing the same on a channel dedicated to movies. The reason behind this is the fact that those interested in sports are more likely to purchase the products than any other consumer group. (1)
So how is this concept relevant to financial institutions? While these companies are in the same field, not all offer the same products or services. And to effectively reach a specific consumer group, every institution must devise a method that will increase their chances of success. But how can they define their target market in the first place? Here are a few ways you can do for your company:
1.Assess the current customer base
Before starting any targeted marketing campaigns, it’s imperative that financial institutions assess the customers they currently have. Who are the main consumers of your services at the moment? In your assessment, make sure you consider the products and services your customers utilize and think whether the same will apply to other potential clients.
But why is it important to analyze the current audience? In most cases, there’s a correlation between some products and those using them. Therefore, assessing the characteristics and common interests shared by the existing consumers will help you in broadening your target market.
2.Define the products and services
Another step that any financial institution should take when identifying its target audience is to define the products and services it offers. This is important because it gives the institution and its marketers a good idea of whom they should be focusing their energy on.
For instance, if the company is looking to offer loans, you need to define the types of financial aid you’ll be providing. Are they business or personal loans? Which ventures, if any, are your products ideal for? Keep in mind that those services meant for established businesses might not be ideal for start-ups or even individual clients.
After you’ve answered all the questions above, you can also list down all the benefits of your products or services. By now, you should have a number of people or companies in your mind who might benefit from what you are offering. For example, if your financial institution is aimed at providing financial aid to start-ups, you can further narrow down to the types of start-ups that are likely to accept your offer.
3.Consider the demographics
Financial institutions and any other organization take into consideration the demographics of the customers when determining their targets. Consumers who fall under the same demographic group tend to share the same beliefs on certain products and services. In some instances, people from one geographical area have similar experiences when it comes to banking and other financial-related issues.
So what are the main factors that these organizations consider when segmenting the market? For one, the income level plays a crucial role since it determines the purchasing power of the target audience. From the financial point of view, those who earn less might be in need of long-term loans to match their needs, while the high earners might be more likely to take short-term loans. (2)
Still on demographics, some financial companies are geared toward people of a specific gender, age, or religious background. For example, take the microfinance organizations created specifically for the empowerment of women. The marketing team of such a brand will always target those places where they can easily interact with businesswomen or any other person who might need their products and services.
4.The psychographics of the audience
A market’s psychographics refers to personal characteristics of the customers. This may include their lifestyle, interests, hobbies, and behavior. After analyzing the demographics of a certain group, many organizations fail to dig deeper and understand their target consumers before starting the marketing campaigns. As such, they often end up with undesirably low success rates.
Researching the personal interests and lifestyle of the consumers doesn’t only give you an idea of whom to target but also how to strategize your ad programs. For instance, certain financial products may be appealing to the younger generation because of their lifestyle rather than their age. Therefore, it’s important that the advertisement message is packaged accordingly.
Conclusion
Financial institutions, just like any other organization, need to market their products for them to meet the expected profit margins. However, for a higher success rate, these marketing strategies must be targeted at a specific consumer group. Some of the factors considered when determining the ideal target audience include the needs of the current customers, the types of products offered, the demographics, and psychographics of potential clients.
References
This is a Sponsored Feature.
The article discusses how financial institutions can identify their target market to improve marketing strategies.
It helps in understanding existing consumers and broadening the target market by identifying common interests.
Demographics help tailor marketing strategies to reach the most relevant consumer groups effectively.
Explore more articles in the Business category
