How To Find The Real Target Market In
A Small Town
By Tom Egelhoff
 I have talked to countless businesses over
the years about their business ideas and products. Rarely do
I find a new business owner who has really taken the time to
look at the community in which they expect to be successful.
"Of course I know the community -- I live here."
Well, I've lived in Bozeman, Montana for nearly eleven years
and I've witnessed many businesses that thought they knew this
community and are now empty storefronts. Several were well established
businesses.
Why did they fail?
I'm not privy to the inside information for most, but the
ones I do know about failed partly because they didn't correctly
identify the "Real Target Market" of the community.
Communities are constantly changing. For regular readers,
you've heard my fish tank analogy. The bigger the fish tank the
more mistakes you can make without losing fish. The smaller the
tank the fewer mistakes.
It's the same with towns. The bigger the town, the larger
the population base, the more mistakes you can make without sinking
your business. By contrast, in a smaller community you are allowed
fewer mistakes because the customer base is smaller.
Start with the basics
If you are planning a new business or the relocation of an
existing business there are some elements that are often overlooked
by even the most savvy business folks. The biggest one is identifying
exactly where the real customers are located. Where is the real
market of a small town?
There are many places in Montana, for example, where it's
200 miles to the nearest town. If you know someone in a major
city and you ask them how far they live from the airport, chances
are they will answer you in amounts of time, not miles.
Even in small towns some city dwellers are not as willing
to drive as far as rural folks are. Before Bozeman got a Costco®,
Target® and Wal-Mart®, Bozeman residents had to drive
to those stores in Billings, MT -- 140 miles away. Did they do
it? Yes, they did.
So, what does this Montana travelogue have to do with finding
the real target market? Let me show you.
Don't fall for the big city theories
Most marketing books will insist that your sales area is like
ripples in a pool. Your business is in the center and the first
ripple accounts for 75% of your business. (x number of miles
customers are willing to travel to your business) The next ripple,
15-20%, the next 5% and so on. That's great in theory but we
live in the real world. These authors worked mainly in large
cities. It may work like that there but it's different in small
towns. Here's why:
To find the real target market in small towns you need to
consider two elements. 1.) How close are you to a major city?
and 2.) What are the other "draws" in your town? Let's
take each one separately and I'll explain what I mean.
1. How close are you to a major city?
This may have a direct bearing on your business because some
customers who don't mind the distance may bypass your business
and go to the large city for selection or the lure of a sale.
TV and radio advertising from the large city are going to
blanket your sales area. If you're a shoe store owner seventy-five
miles out of St. Louis, MO, are you going to buy TV time equal
to the 20 or so Foot Locker outlets? No, you don't have that
kind of advertising clout.
Location, Location, Location
OK, this gets a little complicated so stay with me. You might
want to grab a map of Missouri if you have one.
Let's say you are 75 miles due west of St Louis. About an
hours drive for you big city folks. People living 37.5 miles
east of you have the choice of going to your store or to St.
Louis. It's the same distance. Which one would you go to for
selection, service, operating hours, etc? Most people in this
area would probably drive due east to St. Louis.
Now, what about the people on the western side of you? They
are over 75 miles from St. Louis. Going to St. Louis for these
folks will be a challenge. If they can save a trip to St. Louis
by buying what they need at your business they are very happy
customers. You have saved them a major drive. (Well, not by Montana
standards.)
If the people 75 miles north or south come to you it will
probably be based on the highway system. Is going through your
town the shortest way to St. Louis or will they bypass your town
altogether? Or, where is the next major city from them. You probably
have a 60-40 chance of getting some of these folks.
So as you can see, instead of a 75 mile circle we have two
to three elliptical target markets. Even though there is more
population in the 75 miles due east of us, very few people are
going to drive to a small town when the selection will be more
in a big town.
Instead of this area being 75% of our market they may only
be the 5%. The real 75% of our market is actually west of town.
The remaining 15-20% is going to be north and south and at least
60-70 miles from St. Louis. Whew! Have you got all that?
2. What are the "draws" in your town.
Before considering any city for your business you should be
aware of what each city does to "draw" visitors to
it. These may be tourists, or the local community supporting
a local event. Fourth of July Parade, Rodeo or craft fair.
All small towns have traditional events that draw large amounts
of people to your area. Sturgis, South Dakota has a population
of 5330 people. Once a year well over 100,000 Harley-Davidson®
owners, wannabes and site seers show up for their yearly festival.
For a few days each year it's one of the largest towns in South
Dakota.
Many state universities have football or basketball rivalries
that draw supporting crowds from both cities twice a year. These
may even draw some customers from St. Louis to your business.
That's really sweet revenge when it happens.
The Last Word On The "Real
Target Market"
As you can see, each town, based on location and proximity
can have a vastly different marketplace. Customers don't always
come from large population clusters. They travel as they need
to. They come from everywhere. Know your town and you will know
your customers.
In order to be successful in small towns, knowing where the
real market is can put you in a big tank or a little tank. It's
the size you make it. (Small
Town Marketing Home Page)
This article may be reproduced for your non-profit group or
organization provided it is not altered in any way
and the following is attached:
Used With Permission
©1999 Eagle Marketing PO Box 271 Bozeman, MT 59771-0271
http://www.smalltownmarketing.com - (406) 585-0219
email: tommail@smalltownmarketing.com
Based in Bozeman, MT, Tom Egelhoff is the author of How To Market, Advertise & Promote Your
Business Or Service In A Small Town, and The
Small Town Advertising Handbook: How To Say More And Spend Less.
He is also a seminar and workshop presenter
and trainer. He may be reached at 888-550-6100 or PO Box
271 Bozeman, MT 59771-0271
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