5 tips to prepare your SME for a new market
While existing customers are the foundation of every business, there often comes a time when you want to expand into new markets.
The good news is that with a little research, planning and preparation, your business can minimise the risks of entering a new market and grow its customer base at the same time.
Here are five steps that, in my experience, will help you audit a new market effectively, prepare your team and equip you with the tools you'll need to make the project a resounding success.
1. Research the new market
The market research phase is essential to the expansion process. It helps you narrow down the number of customers to target and which market (including new locations, territories and industries) has the most potential.
There are three stages to this research phase.
Step 1: Identify your existing customers
Talk to your existing customers and ask them why they chose your product or service.
Take this opportunity to survey your customer base and obtain quantitative data such as the company they work for or the position they hold.
Then ask them open-ended questions to find out what needs your product does not meet. This qualitative data can uncover product trends or new features that could find their way into a new market.
This analysis should also give you a clearer idea of which products and services your customers are prepared to pay for, and which they use the most.
Finally, gather information about their average buying cycle and customer lifecycle.
For example, does the average negotiation take six months? How many people are generally involved in the decision-making process?
This information will be very useful in creating your go-to-market (GTM) strategy.
Step 2: Competitive analysis
Analyse the market you would like to enter and audit the companies already operating there.
The main aim of this exercise is to understand the role of your competitors in this market (and whether you will have any new ones).
To do this, you can create a positioning map.
Positioning maps (or competitive mappings) allow you to define the position of your competitors in a market by using variables such as price, the market share they occupy, the practicality of the market and the complexity of assessing your own position.
For example, a phone company might position brands such as Apple and Samsung in the 'high price' and 'high quality' areas of the map. Conversely, brands such as Nokia are likely to end up in the 'low price' part of the mapping, due to their fewer features.
Choose the two variables that are most important to your brand in order to create your own positioning map.
It's important to remember that you need to look beyond the obvious competitors. For example, in some markets Pipedrive is not in direct competition with other CRMs but with spreadsheets and even, in extreme cases, with the classic pen and paper combo.
Step 3: Conduct market research
Assess the potential audience in the new market.
The opportunities will be different in each new market depending on its size, location and competition: you'll probably need to approach it differently from other markets.
Start by considering how your company will position itself in the new market by identifying:
- The size of the market. The new market must be large enough to guarantee the success of your product or service. If your products are only aimed at a restricted audience, demand will be smaller, which will reduce the size of the market. We'll look at this in more detail in a moment.
- Accessibility. Be objective: is your product a good addition to the market and will you be able to connect with your audience? This will depend on the ability to communicate your message and whether there are barriers to entry. The geographical area targeted and the regulations will require you to research the best way to enter the market to find out whether you are legally entitled to promote and sell your product there.
- Positioning. Determine the unique selling points for your product in this new market. Use a positioning map to highlight the points that differentiate your product from the competition and use this as the foundation for your marketing message.
- Profitability. A new market needs to be profitable. Consider the resources you will need to introduce your product to a new market and calculate your potential return on investment according to the different levels of success envisaged.
Once you have the positioning of your business, analyse in more detail the size of the market and the potential audience reached.
You can do this by analysing the TAM, SAM and SOM of the new market you are exploring:
- TAM (Total Addressable Market). This is the maximum potential size or revenue of the new market being explored. If your company sells software that helps people with their budgeting tasks, the TAM here would represent the prospects and leads that make up your ideal customer profile, i.e. the people who could benefit from your software.
- SAM (Usable Available Market). This is the size of the segment of your ideal customer profile that you can realistically serve in a new market, taking into account factors such as geolocation, your positioning and market accessibility. For companies that sell budget software, SAM includes buyer personas that are reachable, have the budget to buy the software and are not affected by regulations that work against you.
- SOM (Capturable Market Section). This is the realistic amount of the new market you are going to capture, taking into account competition, prices and sales strategies. For a software company, the SOM could be ideal customers who are dissatisfied with their current software and could benefit from the unique features you offer.
This market research should allow you to know with near certainty whether entering this new market is a wise decision.
2. Create a go-to-market strategy
If you decide that the new market is viable, your next step is to establish an entry strategy.
Build a clear action plan for everyone so that each employee knows exactly what deadlines need to be met and who is responsible for what.
Take a successful strategy carried out by your sales team in an existing market to get a rough idea of the go-to-market strategy to adopt.
Add the steps that your customers (e.g. agreeing to a sales meeting) and your sales reps (e.g. the first approach to a lead) will need to take and start putting a strategy in place.
This entry strategy requires initial sales objectives to be set.
For example, your sales team may aim to reach a specific number of potential leads in the new market every week or to reach a certain percentage of leads leading to a meeting within the first 12 months.
In order to set your targets and monitor your progress, you may need the support of tools such as sales-focused CRMs. This will allow you to see where your teams are and how close you are to achieving your goals: which can also motivate your sales people.
However, your goals and strategy will depend on your potential customers in the new market and their motivations.
In order to create a detailed go-to-market strategy, your team needs to define :
- Target prospects. Once your team knows exactly who they will be targeting in the new market, they can then optimise their sales pitch to align with their needs. Sales pitches aimed at CEOs, for example, will be different from those you use to communicate with small businesses, as their needs and budgets are not the same.
- Problems. Have a clear idea of the problems your customers in the new market are facing and how your products can help them.
- Motivations. Get a better understanding of what will motivate your potential customers to buy your product in this new market. Choose your key selling point (e.g. your product will help them be more productive or give their customers better customer service) and let it guide your initial sales strategy.
With your sales process fully planned, you can now prepare your sales reps to enter the new market.
💡 Tip: Try to be discovered as soon as your business enters the new market. Collaborate with your marketing department to get ideas of what your team can do to improve brand awareness.
3. Prepare your teams
Make sure everyone involved is trained and prepared.
To do this, hold regular meetings to make sure everyone is on the same page about the best way to enter the new market.
For example, your sales team needs to know whether they will be selling directly to the end consumer or whether they should try to build relationships with third-party companies and distributors. The members of your team who are in direct contact with customers will also need training in your go-to-market strategy so that they are prepared when they communicate with potential new customers.
The best way to prepare your employees is to organise training for members of your sales and customer service teams to prepare them to sell to a new audience.
That said, getting them to attend an intensive three-day seminar may not be the best idea. Research has shown that without regular reinforcement of knowledge, people tend to forget what they've been taught in just a few days.
So instead, focus on regular training for the team that will be in charge of the new market while your company prepares.
It's also important to ensure that your team is familiar with the new trade and marketing laws and regulations that govern the new market so that your business is legally covered.
4. Use the right tools
Choose tools that will help your team enter the new market easily and, if necessary, allow them to work remotely from any time zone.
Automate where you can
It may take a while for your team to feel comfortable in a new market: help them optimise their time by setting up automated e-mail and task flows to win new customers.
The right tools eliminate manual tasks such as data entry or e-mail follow-up. This keeps customer data up to date and ensures that new leads are taken on as soon as they enter the sales funnel.
Here are some useful points to help you determine which tasks can be automated in this context:
- Determine whether the task can be eliminated. Analyse your team's workload and daily tasks. If one of these tasks does not add value and does not help you to achieve your objectives in the new market, remove it from your go-to-market strategy .
- Decide whether the task can be automated. Automating tasks such as data collection or e-mail follow-up can save your team valuable time. However, some tasks such as a personalised outreach or closing a negotiation may require your team to do it manually. Make a list of their tasks and decide which ones make sense to automate.
- If no automation is possible, ask if the task can be delegated. If the task cannot be automated, decide whether it makes more sense to delegate it to someone else in order to free up time on the side of your sales team.
Set up a lead generation tool
It may take some time for your team to become comfortable in a new market where they will most likely spend a large part of their time generating leads.
Tools like conversational chatbots allow sales reps to automatically qualify new leads and get in touch with them. Chatbots can browse web pages and retrieve certain information about prospects, such as their emails or the domain name of their company's website.
Other lead generation tools allow you to define the criteria that your leads need to meet in the new market. The tool then qualifies the leads and assigns them to a sales rep based on their availability, location and expertise.
💡 Tip: If the new market is abroad, you may need to consider adding a translation tool to your suite of tools as language can be a real barrier to communication.
5. Develop a new sales pipeline and potentially a new funnel
The best results can only be achieved in a new market by keeping an eye on the data you're collecting.
The best way to do this is to create a separate sales funnel and pipeline for your sales team to use when they start selling into the new market.
Using a CRM is a good way of creating sales pipelines and giving your team access to them when they are prospecting. Not only does a CRM allow you to keep track of the number and size of all new deals in the pipeline, it also allows you to keep an eye on conversion rates and sales velocity. You can also modify the stages of your sales pipeline and add fields customised to your new go-to-market strategy .
Creating a new sales funnel and pipeline (and keeping an eye on it) is crucial when you enter a new market, as it will tell you whether your strategy is working. CRM tools can track your team's results in an automated way, allowing you to keep control of what needs to be done to achieve your goals. With customisable reports and dashboards, sales managers can see how many deals have been won/lost and which customers are making the most money.
This data will guide you and help you in your entry, while enabling your company to modify its sales strategy to maximise its chances of success.
The key to success in a new market: preparation
Whether this is your company's first time in a new market or not, good preparation is still important.
Thoroughly analysing the market, its competitors and its viability is crucial. There is a chance that this new market will not be a good match for your company. If you decide to go ahead with your venture, good preparation of your team and your suite of tools will give your business the best chance of success in this new environment.
Keeping an eye on your progress and creating a market-led strategy that resonates with your ideal customer base is also crucial to ensuring your team stays on track and achieves its goals.
With the right preparation, your team will create the ideal customer experience through a combination of smart tools, well-trained employees and detailed market research.
Article translated from French