They say size isn’t everything and when looking for new customers it’s partly true.
So where, how and what should you look for when assessing new markets in which you can grow your business?
1. Look for low cost of acquisition. In other words if a market sector looks great but is expensive to get into then move on, because there will likely be better, more cost effective options elsewhere.
2. Check for potential. If a market looks medium sized and medium value it might still have large potential and might also be less obvious to your competitors so your potential share of the market could be greater.
3. Customers in your new market must show a propensity to switch. This means that even if a market looks large, valuable and attractive if customers are already tied into long term contracts or deals it might not be worth your attention in the short to medium term.
4. Use your full portfolio. Make sure when you assess and size a new market opportunity you look at all the products and services you could offer to it and even those you might need to develop if you can prove the return on the investment in new product development.
5. Get real life data as soon as possible. If you can try a beta or soft launch into a new market you can work from real information rather than speculation. If this isn’t possible try analyst blogs and government websites for the best objective intelligence.
6. Don’t just focus on the big players. 80% of the value of most markets is created by 20% of the largest customers, but those are where the competition are likely to be focusing. Get intimate with the smaller players for a more discrete but potentially profitable new market entry.
And finally, always assume your forecasts and plans are wrong. In this way you’ll be continuously challenging them and looking for more and more intelligence and data which in turm will lead to continuous improvements in both the knowledge you acquire and importantly the decisions you take using the knowledge.