Almost every Internet business has at least TWO very different target audiences. To be successful, you need to know who they are and appeal to them both from the start.
For some reason, I keep reviewing business plans where entrepreneurs forget to consider one of them, which is a good way to fail out of the gate. In this post, I’m going to explain how to find both markets and how to make each of them happy.
Finding the two target audiences
Where do we see the Two Target Audiences? An easy example is a website publisher. Target Audience #1 are the readers. Target Audience #2 are the advertisers. Readers are essential, but advertisers pay the bills. Evidently, you must find both to be successful.
This means you need to be appealing AND differentiated to both groups right from the get-go, if you are to make a splash. This differentiation must be in your business plan well in advance. You cannot rely on a “build it and they will come” strategy. It is well known that readers do not bring advertisers, and advertisers certainly don’t bring readers.
A more complicated example of the Two Audiences is an e-commerce site. Target Audience #1 are the buyers, naturally. But Target Audience #2 are your suppliers. Remember, you’re not the only distribution game in town — or if you think you are, you won’t be for long. If you are not providing lasting, sustainable value to the supplier, they will look elsewhere for distribution, or sell directly. You just can’t have a sustainable e-commerce business without happy suppliers.
Even the simplest iPhone app has the Two Audiences. Audience #1 are your potential customers. Audience #2 is Apple itself. If Apple doesn’t like your app, you can kiss all your hard work goodbye, because you won’t be able to distribute it on iTunes. And that would be sad.
Why do entrepreneurs forget about the Two Audiences? I think it’s because we’ve believed a little too much hype that the Internet is about disintermediation — that is, the Internet magically allows customers to go directly to buyers. But it’s not: the Internet is about RE-intermediation. It’s about you, the Internet entrepreneur, taking the place of some old-line publisher, retailer, or distributor. The Internet has simply given you a new distribution or marketing channel to disrupt the old way of doing things. But the business model is still the same: you’re providing a place where one audience goes to find another.
How to address your two target audiences
So what should an entrepreneur do, practically?
- Identify the Two Target Audiences explicitly in your business plan. Name them, describe them, figure out who their individual decision makers are and what motivates them.
- Analyze your competition from the points of view of each Audience. You always have competition, either from the old-line provider or a close substitute. Find your top 3 competitors and understand their strengths and weaknesses. (Yes, this mean you will have to analyze 6 different businesses. Eat your Wheaties, it’s good for you.)
- Write out your unique value proposition for each Audience. Don’t leave this for later. Your choice of a value proposition will have a big impact on your company naming, launch strategy, marketing planning, and other startup necessities. Don’t focus all your attention on one audience and make yourself unpalatable to the other.
In summary, you always have two target audiences on the Internet. If you don’t find them and analyze them in your plan, you’ll have a lot more work later.