Business Growth: The Power of Adjacent Markets
November 05, 2013
This post is the third in a series on the business growth opportunities that small and medium-sized businesses (SMBs) can consider as they seek to increase top line revenue.
Those of you following our four-part series on business growth will remember that we began our discussion with the need to diversify the customer base and continued last week with a look at the ways that products impact revenue growth. Today we will discuss the need to find customers (and diversify the customer mix) through the identification of adjacent markets.
When you begin to think about enhancing the product mix, the first step is to clarify the specific needs your products meet for customers. What problems are you solving? With the answer in mind, it’s time to look at the markets that are adjacent to those end use applications and to look for prospects with similar problems.
Of course, the fastest way to realize quick business growth is to see what the competition is doing. Are they serving markets that you aren’t? Are they active in markets you’ve been considering? Please note: if you don’t know, now is the perfect time to establish a competitive intelligence regimen!
Although the temptation to follow a rival can be strong, it’s not always that simple. First, there’s the matter of whether your products are a true fit for the market. Can you be dramatically different in that new space?
When it comes to opportunity assessment, it’s all too easy to become paralyzed by the options at hand. It can be helpful to think of it this way: if you were presented with two new market opportunities, but you only had the resources to pursue one, how would you score them in order to mitigate the risks and optimize the potential return?
Market opportunities lurking between the lines
One underutilized business growth resource could be the conversations that take place in your trade show booth. When properly documented, even those that don’t become hot leads may offer opportunities for insight. Why not take a minute to revisit the leads from your last few shows? There may be new market opportunities lurking between the lines.
These opportunities can extend beyond the booth as well. If done with purpose, the insight gained by walking a show can yield real understanding of a new market: the problems that exist, the pricing protocol, the prevailing distribution channels, the primary players, and more.
Once you start to build a short list of potential markets to aid in business growth, it’s critical—especially for companies with a limited marketing budget—to use data to prevent jumping after a mismatch for your particular skills or product sets. This includes understanding the pricing (Are you comfortable with the price points buyers expect to pay?) and production (Do you have the bandwidth to deliver the batch sizes and meet the delivery times they will demand?)
A well-measured market entrance may also require understanding the impact of new technologies (Are there disruptions underway, or just over the horizon?), materials (How experienced are you working with the kinds of processes that find traction here?), or regulation (Are there factors that stand ready to influence growth?)
With a short list in hand, take a brutally honest look at your product offerings. CONNSTEP has the experience and ability to provide exploratory research on your prospective markets. We can help you understand the drivers, the alignments, the risks, and the potential rewards.
It’s still not too late to begin the business growth planning process for 2014. If you’re unsure of where to start your in-depth look at the interplay of growth factors in your business, consider CONNSTEP’s Business Growth Program. The program is designed specifically for small and midsize companies focusing on each of the four key elements of business growth. Click here to learn more!
Missed the article and first two blog posts? Here they are:
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