Every business needs to understand who they are, their place in the market and where they’re headed. Only 66% of businesses survive their first two years of operation, with a mere 33% making it all the way to their tenth.
So, what does it take to identify the right market opportunities and develop a growth strategy that takes you where you want to go?
Let’s take a look.
A business growth strategy is a plan of action that details how a business intends to expand over a given period of time. Your growth strategy will be unique to your business. It will be influenced by the industry you’re in, the types of customers you serve and the market opportunities on offer.
The key is to be thorough. Define your value proposition, identify your target audience, and study your competition (if there even is any at this early stage), then strike whilst the iron’s hot.
There’s a whole host of tactics and practices that go into making up a good business growth strategy, from customer acquisition to product development – and even customer reviews. How you carry out each of these will play a role in how your business develops over time and ultimately determine how successful you become.
We’ll explore some of these in a bit more detail later on, but for now, let’s start with how you go about identifying a good market opportunity in the first place.
A market opportunity is, put simply, a gap in the market. Something, someone or somewhere that is not being addressed by existing businesses that you can capitalise on and use to quickly grow your business.
This is easier said than done, however. Everyone is vying for the same space, looking for that little something extra that hasn’t been done before to push them ahead of the competition.
So, how can you spot a good market opportunity before your competitors do? And, how can you build a successful business growth strategy once you have?
Identifying a good market opportunity for your business boils down to four key areas:
Once you’ve answered these questions you should be able to understand your customers a little better, identify strengths and weaknesses in your products and ultimately uncover new markets to explore and grow into.
Let’s explore some of the techniques you can use to answer these four questions below.
First thing’s first, you’re going to want to establish exactly who it is you’re selling to. Whether you’re conducting customer surveys, analysing data from your own website or using third-party research, knowing your audience is key to helping you discover a new market opportunity.
One of the best ways to work out who your customers are and what they want from your business is to ask them directly! Customer reviews and surveys can give you real insight about every aspect of your business, from what customers think of your products and services, to how your website and support team functions.
Analysing all this feedback can take time, but there are tools that can make it easier. Sentiment analysis tools, like Feefo’s Performance Profiling, can automatically detect the emotion behind every comment, as well as identify common themes within your feedback. For example, you may discover several customers have highlighted a problem with a product or think your service is lacking when it comes to after-sale care.
“Feefo’s AI-powered Performance Profiling tool has enabled us to improve our delivery process and initiated some fascinating conversations between us and our customers, resulting in Iceland being able to better respond, listen and take action on feedback.”Rachel Lewis, Customer Response Co-Ordinator
The insights you glean from your reviews and surveys can be used to improve your products, service and how your brand is perceived. It’s up to you to decide what you want to learn from your feedback and how you want to use that information going forward.
Take a look at your existing audience and split them into segments that share common traits. These can be hard demographic factors, such as age, gender, location, income, occupation, etc. which can be used to help estimate market size. “Softer” variables such as attitudes, lifestyle and personal values, can help you determine motivations behind why people might buy your products and influence everything from price to design.
Once you’ve split your audience into segments, you need to get a little more personal and establish some clear customer personas. Customer personas are a more detailed breakdown of the different types of people who are likely to buy from your business. For example, a toy store may have a persona for mums, dads, grandparents and children.
If it helps, you can give each of these personas an identity, with a name, age and personality – the more real they appear, the easier it is to start seeing them as actual people and build an emotional connection. Personas make it easy for everyone in your business to get inside the head of your target audience by focussing on their motivations, their potential pain points and how your business can help overcome them.
Base each of your personas on real customers. Use surveys, feedback and web analytics to drill down into exactly who has bought from you before and why. The more accurate the persona, the more useful they’ll be in helping your business growth strategy in the long run.
You don’t know how valuable a new market opportunity could be until you know how often, and how much, customers are likely to spend with you. Purchasing patterns tell you the frequency, quantity and value of the purchases your target audience is making.
Key questions to ask yourself:
Every consumer purchase falls into one of the following categories:
No matter which pattern they fall into, consumers typically go through five stages when making any purchase. Understanding them all is important to see where and how your business fits in.
This is when a consumer realises they either need or want to make a purchase. Their headphones may have broken, so they need to make a new purchase, or they might realise that a new type of headphones have just come out and so they want to upgrade their current pair.
At this stage, consumers begin to gather information about their potential purchase from a variety of sources, which could include asking people for recommendations, reading reviews, talking to a salesperson, clicking on adverts and much more.
Following their research, consumers will have a variety of options to choose from in terms of product or service type and the brand or business. Taking the headphone purchase as an example, the consumer will need to decide what type of headphones they want (in-ear, wireless or over-ear) and their chosen brand (Sony, Bose, Beats, etc.).
During this part of the process, they’ll weigh up the features, cost and advantages of each product or service so they can come to a decision.
It’s make or break time! Now the consumer will come to a final decision about which product or service they’re going to buy, but they may also choose to not make a purchase at all! If they do decide to go ahead, they’ll also consider where, when and how they’re going to make their chosen purchase.
If you want to retain your customers, the final stage is the most important one. Your customer has made their purchase, but are they happy with it? Do they know who to contact should they need help?
Asking for feedback at this stage is a great way to not only evaluate how smooth the entire buying experience was for the customers, it can also help you identify any issues with the product or service, so you can fix these promptly and keep the customer happy.
Product analysis can take many different forms, but put simply, it involves asking questions about your product and collecting feedback. There’s a range of sources you can use for this, including industry or product experts, focus groups, and existing customers. Product analysis can take place at almost any stage of the design process.
Collecting and analysing product reviews is a great way of getting valuable feedback about new and existing products. Sentiment analysis tools, such as our Performance Profiling tool we mentioned earlier, can highlight your product’s strengths and weaknesses, so you can easily see what’s working well and what needs improving.
Once you know which products are getting the best reviews and are therefore favoured by your customers, you may decide to focus on growing your most loved product lines, or switch up your marketing efforts by making sure you’re shouting about the features your customers love most about your products.
It’s not just your own products you should be keeping an eye on. The performance of products that go hand in hand with your own will have a huge impact on your growth strategy. Keeping up to date on the latest trends is crucial in helping you understand how these complimentary products could affect you.
For instance, with more and more businesses focussing on their sustainability, if you’re a printer manufacturer, you’re going to want to keep an eye on paper sales. If you notice a drop, this will mean you’ll either need to find an alternative solution or adjust your growth strategy accordingly.
It’s important to remember, however, that it’s not just idly sitting back and watching how others are getting on. Building relationships and partnering with complimentary businesses can actually benefit your customers and lead to new market opportunities.
Understanding your competition is the next step in building a good growth strategy. There’s plenty of techniques, but the key thing you want to try and uncover is the major strengths and weaknesses of each of your rivals, and then take what you’ve learned to guide the direction of your business.
For a lot of new businesses, competitor analysis is seen as an afterthought, but knowing who you’re up against will help you form excellent offensive and defensive strategies and alert you to any potential opportunities or threats as early as possible.
Competitor benchmarking uses a variety of metrics to help you compare your performance against your main competitors. You can be as broad or specific as you like with what you’re comparing, be it market share, sales or even your Net Promoter Score. This is your opportunity to pinpoint exactly how you stack up and where your next market opportunity might lie.
It’s important to keep your focus and not just throw everyone’s name into the ring here. You can choose to look at your direct competition if you want to see how you can immediately improve; the major players in your industry if you have loftier growth expectations; or even those playing catch up if you want to avoid getting caught out later down the line.
With so much to look at, where do you start? Think about what you want to achieve as a business and the KPIs that are most important for hitting your growth targets. If you’re still unsure, here’s a few places you can start:
“Delivering an exceptional customer experience underpins Synergy Automotive’s every action. As the world’s most trusted independent ratings and reviews platform, Feefo transparently and independently verifies our customer reviews in real time. Enabling us to track our “world class” Net Promoter Score of 94.”Paul Parkinson, Managing Director
It’s also important to establish your current position in your chosen industry. Comparing your business processes against ‘best practice’ approaches, and your performance versus industry averages, will give you a better view of where you sit in the market and help you discover potential growth opportunities.
It’s not always the easiest information to get hold of but there is plenty of data you can use to benchmark against if you look closely. Some stuff, like brand awareness might be a little tricky to track accurately, but site traffic, Net Promoter Score and social engagement is all measurable if you know where to look.
Here’s a few things you can start to track to get a better understanding of how you’re performing against industry averages:
If your business growth strategy includes you expanding into a new industry then benchmarking isn’t going to cut it. You’re going to want find out as much information as possible about your new industry so that you can better identify the market opportunity on offer.
There’s a few things you’re going to want to find out more about before you commit to your new venture, including:
The final piece of the puzzle is getting to grips with the market itself, or the business environment factors, that could impact the direction your business is headed. Whether its political decisions, like Brexit, a change to the law, like GDPR, or a wider economical shift, there’s plenty of external factors that could potentially disrupt or even improve your chances of success.
Staying on top of everything that’s going on can be tough, but it’s essential you know what’s what so that you can make smarter decisions about what to do for your business.
A few things you want to be keeping a close eye on are:
Much of this research is going to require some leg work, but using customer feedback can help you quickly understand just how much your customers really care about these issues.
Surveys give you the opportunity to ask customers about how these issues might affect them, giving you plenty of opinions and additional insight to help guide your strategy on how to approach any potential obstacles that arise.
Now that you’ve completed a full assessment of the market and identified the opportunities on offer, you’re going to need a business growth strategy that lets you capitalise.
The reason why brands like Amazon, Netflix and Apple continue to grow is because they never stand still. They listen and learn from what the markets, and most importantly, their customers, are telling them, and they adapt their growth strategy accordingly.
It’s all about building a strong brand that has long-term appeal. Sure, there’s some quick wins that could score you a few extra leads in the short term, but establishing a brand identity and a growth strategy that aims for continuous and flexible development is key.
At the end of the day every business is different and what works for one company, may not work for you. If you’re still not sure where to begin, let’s explore a few options.
How do people perceive your brand? Do you have a positive or negative reputation? Is your brand well known enough to even have a reputation? No matter how positive, negative or neutral your reputation is, there is always room for improvement, and doing so could give a huge boost to your growth.
First, you need to know what your brand’s reputation is, and to find this information out, you’ll need to start collecting customer feedback. Reviews and surveys are a good place to start, but you can also use social listening tools to discover what people are saying about your brand that they may not be willing to say to your face.
Any positive feedback you collect can be used to boost your brand reputation. You can share them on social media, make them part of your PPC campaigns, and use them to influence any future marketing campaigns. For example, if, as part of your research, you find out that your customers love your environmentally friendly packaging, your next campaign can highlight exactly how eco your company is!
It’s also worth considering if you’re doing anything that could harm your reputation. For example, responding poorly to (or simply ignoring) negative feedback will damage the relationship you have with your customers.
“Since using Feefo it has allowed us to show the physical evidence and proof of how strong our customer service is. We share this evidence with our prospects to help win more business”Oliver Leyens, Director
Your employees represent your brand and if they’re not happy, they’re going to be talking about your business negatively, whether you realise it or not. Over time, this could seriously impact your reputation and stifle the growth of your brand.
It can also cause your campaigns to backfire, like Starbucks’ recent campaign which hoped to show support for the transgender community. Unfortunately, the brand values expressed in the video advert didn’t match how many transgender employees felt, causing the campaign to go viral for all the wrong reasons.
Finding out where your brand is going right, and going wrong, from your employees’ perspective is easy. Regular anonymous employee engagement surveys give your staff members the chance to air any grievances, share what they love about their jobs and give them the opportunity to be involved in the business’s development and growth.
While you won’t be able to fulfil every employee’s request, you need to make it clear that you’re listening to them and you care about their opinions, even when they’re less than positive.
With businesses acing their customer experience bringing in 5.7 times more revenue than the competition, isn’t it time that you stopped thinking about selling products and focussed on selling experiences?
The experience economy is booming. 72% of millennials are choosing to spend their hard-earned cash based on the experience they’re offered, rather than the actual products. In part because of technology, but also the changing behaviour of customers who value shared experiences and the ease of being able to shop, share and socialise through their smartphones.
For your business to take advantage, you’re going to need to understand what makes your customers tick in the first place. Before you launch into building a new customer experience-focused growth strategy, however, asking your customers for feedback can tell you a lot about what you’re already getting right, but more importantly what might be missing from your current offering. Use his insight to start creating personalised brand experiences tailored to what your customers are telling you they actually want! Cutting out the guess work and giving you a head start on the competition.
You may have some great products under your belt already, but if you want to keep up with the competition, you need to have a product development strategy in place. In a competitive market space, you need to be able to stand out, and unique products and offerings are a great way to do this. New product developments not only help you retain existing customers, they can also attract new ones.
Before putting together a product development strategy, you need to know what your audience wants. Consider:
One of the best ways to find out this information is to get your customers involved in your strategy. Create surveys, read reviews, set-up focus groups and run betas on new products to get the feedback you need to refine your product offering. Not only will this ensure you’re creating products that people care about, it also improves the relationship you have with your existing customers, as they feel involved in your company’s growth and success. This can help boost customer loyalty and attract new customers, and both of these boxes need to be ticked if you want to grow your business!
Want to know more about how customer feedback can play a role in your growth strategy? Get in touch with a member of our friendly team today.