Receive the latest mybusiness news
Copyright © 2020 MOMENTUMMEDIA

Established firms struggle with new opportunities

Kam Ozonaran
29 August 2017 4 minute readShare

One of the biggest challenges facing business owners is effective growth. For many, it is a thorn in their side which is causing considerable frustration.

Business owners facing this challenge may be wondering why their product or service is not bringing in the sales required, or why their marketing is not working as expected, or why customers are not sticking around.

For a business to grow, marketing needs to be focused on three core areas, namely:

  • Expanding into new markets
  • Acquiring new customers from existing markets
  • Ensuring that existing customers become repeat customers

These core areas work in cycles and so it is important to identify the maturity of your business in the context of the current market segment. A more mature business may be ready to expand their footprint in other segments, however a business that is not as new may still need to penetrate the existing market and acquire enough customers.

For well-established businesses looking to grow, the first step should be to:

Expand in to new territory

For any growth strategy, start by identifying the barriers in the minds of customers that stand between what they currently do, and what you want them to do.

Businesses need to address how they will overcome these barriers and attract consumers to them, as opposed to their competition or even inaction. This can be done by harnessing insights: the understanding of customer needs, the type of products, tone and manner of communication aimed at connecting with consumers at a much deeper level and influencing them to buy or continue buying from the business.

Highly mature businesses will find that consumers are not responsive to their brand and marketing in their current market territory. The reason why is often puzzling to many business owners, but here’s the thing: the answers are often right under their nose:

  • Industry events: There are numerous industry events out there, however turning up is only the initial step. Business owners need to be active in engaging with the industry experts, exhibitors and speakers – ask questions, draw upon their knowledge and leverage their hard work to obtain your answers.

  • Existing customers: Your current and active customer base is one of the best sources of information for your company – after all, they are already doing business with you. A mature business should have feedback systems in place so this is where you can compile and review the customer feedback reports, which will give you current and invaluable insights.
  • Dig into the archives: Have a look at previous customer feedback reports – there will be nuggets of gold that you will find in this data. Just because the data is older, it doesn’t necessarily mean that it is no longer relevant or no longer applicable.
  • On the coal face: Your frontline staff are not only the face of your business, they are in contact with your customers daily. Who better to talk to and obtain information from than your sales people and your service staff? They will be able to provide you with the insights you desire.

Venturing into the unknown

When you are expanding into new territory, you’re not always equipped with a GPS. However, you can still map out your journey if you ask the right questions. The right questions will uncover the road you need to take, and help you to identify the obstacles that you may face.

Once you have this knowledge, you can then take steps to remedy the obstacles and expedite your journey into successfully establish your business in the new territory.

Questions should be asked in the following areas to help you to extract the insights from the sources and give you direction on how you should approach your business expansion:

  1. Responsiveness: Are consumers unresponsive to the benefits offered by your brand?
  2. Trust: Do consumers lack the confidence that you will deliver for them the benefits of your brand?
  3. Competition: Do consumers believe they already have these benefits through another brand?

As you collect data from answering these questions, you will be able to identify certain obstacles - or gaps - which you will need to manage in order to ensure that your growth plans are successful.

Again, it is important to ask the right questions so that from the ensuing answers we can bridge the gaps:

  • The Competitive Gap: Can we bridge this gap by actively offering consumers an alternative brand experience to our competitors?
  • The Usage Gap: Can we bridge this gap by firstly winning new customers; and secondly increasing the usage and with our existing customer base?
  • The Distribution Gap: Can we bridge this gap by opening more distribution channels within the existing market area?
  • The Product-Line Gap: Can we bridge this gap by offering our products to new customer segments?

Entering into new market segments can be emotionally and mentally challenging because as a business owner you are literally venturing into uncharted waters, and this can be quite risky.

This also takes an immense amount of courage and the best way to check if you’re on the right path is by consistently testing and measuring the results of those tests.

Once you have enough data from the questions that you’ve asked, you may wish to employ one or more of the following tactics to fulfil on this strategy:

  • Differentiate: Develop a differentiated brand or product line with unique features to fit with the desires of the consumers in the new market segment or territory.
  • Niche: Develop brand offerings to several smaller potential segments, and build your strength in servicing a niche market.
  • Benefits: Design promotional campaigns that address specific interests and outcomes of your target audience, their pain points and their drivers.
  • Channels: Build unique media channels to build brand presence, product profile and reach between your offering and your new target audience.
  • Risk: Design service programs to reduce and even potentially remove the perceived risks to customers in the new market segment, and lower the emotional barriers to entry.

Expansion into a new territory is an activity that only a business with a high level of maturity in that market segment should actively pursue. For businesses that do not have a strong foothold within their market segment, their primary goal should be new customer acquisition, with marketing activity to be focused on new lead generation.

While many businesses are quite proactive in acquiring new customers, it is just as important to retain and nurture your existing customer base through building customer loyalty.

Kam Ozonaran is managing director of on-demand marketing recruitment firm Marketing Temps.

Established firms struggle with new opportunities
mybusiness logo
Kam Ozonaran

Leave a Comment

Latest poll

How satisfied are you with the SME measures in the federal budget?