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Target Audience Analysis

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In a nutshell: Target group analysis is the systematic process by which companies identify, segment, and understand their existing and potential customers based on demographic, psychographic, and behavioral characteristics. It forms the foundation for effective marketing, tailored product development, and successful business model innovation.

What is Target Group Analysis? – Definition

Target group analysis is a strategic process aimed at identifying the most relevant customer segments for a company and understanding their needs, behaviors, and decision-making patterns. It answers the fundamental question: For whom are we actually creating value?

In the context of business model innovation, target audience analysis goes beyond traditional marketing. It identifies not only who buys, but why—often uncovering untapped customer segments that open up new business opportunities. Jobs-to-be-Done interviews systematically explore the “why” behind purchasing behavior.

For the Business Model Canvas, target group analysis provides the basis for customer segments and the Value Proposition – two of the most important building blocks of any business model.

Methods of Target Group Analysis

MethodApproachSuitable for
Buyer PersonasDetailed, fictional customer profilesMarketing, content, sales
Jobs-to-be-DoneCustomer needs defined as “jobs”Product development, innovation
Market segmentationDivide total market into homogeneous groupsGo-to-market, strategy
Customer Journey MappingAnalyze customer journey in phasesUX, service design
Data analysisEvaluate CRM and analytics dataExisting customer analysis, optimization

Segmentation Criteria

Demographic: Age, gender, income, education, occupation, marital status, company size (B2B)

Geographic: Region, city/country, federal state – often crucial for Austrian SMEs

Psychographic: Values, attitudes, lifestyle, personality traits, willingness to innovate

Behavioral: Purchasing behavior, usage intensity, brand loyalty, price sensitivity, information sources

B2B-specific: Industry, company size, decision-making process, buying center, digital maturity, willingness to innovate

Conducting Target Group Analysis: 6 Steps

  1. Existing Customer Analysis: Who are your best customers? Analyze CRM data, sales distribution, industry mix
  2. Qualitative Interviews: 10–15 in-depth interviews with customers and non-customers. JTBD methodology for insights beyond demographics
  3. Quantitative Validation: Quantitatively validate insights from interviews via online surveys
  4. Segmentation: Cluster customers into homogeneous groups based on the most relevant criteria
  5. Persona Creation: Develop detailed buyer personas for the 2–4 most important segments
  6. Prioritization: Prioritize segments based on market potential, strategic fit, and accessibility – the basis for positioning and Go-to-Market Strategy

Tools and Data Sources

  • CRM Systems: Analyze existing customer data – purchase history, segmentation, CLV (Customer Lifetime Value)
  • Web Analytics: Google Analytics, Hotjar, Search Console – understand the target group’s digital behavior
  • Social Media Analytics: Platform insights into follower demographics and interaction patterns
  • Market Research: Statistics Austria, WKO industry reports, Eurostat – market data for segmentation
  • Survey Tools: Typeform, SurveyMonkey – for quantitative target group surveys
  • AI-powered Tools: AI-based analytics for automatic customer segmentation and behavior prediction

Target Group Analysis as an Innovation Driver

Target group analysis is more than a marketing foundation – it is an innovation engine:

  • Discover Non-Customers: Who isn’t using your industry – and why? This analysis is central to Blue Ocean Strategy
  • Find Unmet Needs: JTBD analyses reveal innovation opportunities that quantitative market research overlooks
  • Validate Business Models: Without target group understanding, there is no Product-Market Fit
  • Build Competitive Advantages: Whoever best understands their target group can formulate the strongest USP

Target Group Analysis for SMEs: Pragmatic and Effective

SMEs don’t need expensive market research studies for effective target group analysis:

  1. Evaluate CRM Data: You already have your most valuable data – identify top customers and recognize patterns
  2. Conduct 5 Customer Interviews: 45 minutes per conversation, semi-structured – you’ll be surprised how much you learn
  3. Create 2–3 Personas: Not perfect, but vivid and usable for the entire team
  4. Discuss as a Team: Sales, service, and marketing have different customer perspectives – involve everyone

Innovation consulting can moderate the process and bring in external perspectives.

Understand and Reach Your Target Groups

We help you systematically analyze your target groups and derive effective marketing and innovation strategies from them.

Book a Target Group Workshop now →

Frequently Asked Questions (FAQ)

How often should a target group analysis be conducted?

A comprehensive target group analysis is recommended every 1–2 years or when significant market changes occur. Additionally, customer data from CRM, analytics, and feedback should be continuously evaluated to identify changes in customer behavior early on.

What is the difference between a target group and a buyer persona?

A target audience is a broadly defined market segment (e.g., “SME managing directors in Austria”). A buyer persona is a concrete, detailed profile of a fictional person within this target audience (e.g., “Maria, 42, managing director of a 30-person mechanical engineering SME in Upper Austria”). Personas make the target audience tangible and actionable.

How do I find my target group as a startup?

Start with a hypothesis: Who has the problem you are solving? Validate through conversations with potential customers (customer development). Begin with the narrowest possible segment—”all SMEs” is not a target audience. Use Lean Startup methodology to progressively identify the optimal customer focus.

How many target groups should an SME have?

For SMEs, 2–4 clearly defined target groups are recommended. Less is often more: It’s better to serve 2 segments excellently than 5 mediocrely. Each target group should be large enough for economic growth, clearly distinguishable from each other, and reachable through relevant channels.

What is the ideal target audience size for an SME?
A focused target audience of 10,000-100,000 potential customers is often ideal for SMEs, depending on average deal size and sales capacity. A narrower focus allows deeper expertise and more effective marketing with limited budgets. Many successful SMEs dominate small niches rather than competing weakly in large markets. Calculate backwards from your revenue goals – if you need 100 customers and can convert 2% of those you reach, you need an addressable market of at least 5,000 prospects.

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