Small to midsize businesses can take a variety of steps to find new markets through which to sell their products or services. This process often involves analyzing market research, including sales and customer data. Once you discover some potential new audiences or demographics, you can start testing their interest.
Here are five steps you can take to identify new markets:
- Examine Existing Sales and Customer Data
If you have an enterprise resource planning (ERP) or customer relationship management (CRM) system, you should use it to run reports on who currently buys your products and where they are located. You can also manually calculate this information by using a spreadsheet to extract and sort data. This will help give you a big-picture idea of who may be interested in your products and help you uncover the reasons why these particular customers are attracted to your services. If you are able to detect a pattern, you can strive to find new audiences to which this pattern also applies.
- Go Where There's a Need
For best results, you should look for regions or industries that have needs similar to those you already service. Where there's a need and a clear solution, sales can be easier to close. By understanding who already uses your product and why, you can gain important insights about other customer groups that may need it.
- Look for Buying Power
By conducting research on sites such as Hoover's and Ibis World, you can gain a better understanding of whether an industry or market can afford your product or service. These types of resources will provide you with industry snapshots regarding buying power. This information is crucial, as the income or revenue in an area of need may not support buying your products or justify marketing to them.
- Ask Your Staff for Ideas
Sometimes it's easy to forget that your staff members can often be the best source of ideas and information. After all, employees in a variety of different departments (such as sales, marketing, fulfillment, product development and customer service) are in close contact with your customers. As such, it's a good idea to ask your team to brainstorm potential new markets and then conduct online research to evaluate their choices.
- Test the Potential Markets
Once you've identified potential markets, you should test your theories. You can do so by introducing your products at a discount, holding events or demonstrations, sending emails and direct mail or running ads in local or trade papers. You may wish to run your tests for a period of at least six months — two business quarters — to see if seasonality plays a role. It's important to remember that a shortened test period may be more likely to trigger misleading results.
When you're trying to identify new markets, it's essential that you evaluate your current success stories. This information will help you find the best audiences to target.
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