Thinking About Entering a New Market?May 14, 2021
When I was a younger, green-around-the-gills entrepreneur, opportunity had a magnetic effect on me. If I saw an opportunity, I often would start imagining ways to jump in head first and make a splash.
In hindsight, those produced...well, interesting business ideas and more than a few funny stories. I imagine if you’re an entrepreneur, you probably have a few of those yourself. There’s just something in us that when we see an opportunity, those “how-could-I-pull-that-off” wheels start turning.
But what is it that separates the successful endeavors from the ones that flame out—despite how great the initial idea is? Here’s a hint: it’s rarely ever luck—or even raw, entrepreneurial work ethic.
I’ve had the unique benefit as a business coach to be involved firsthand with a wide variety of market entry strategies (MES) - quite a few more than most owners ever normally do. It has given me a nice sample size to observe what worked, what didn’t, and what positions new MES’s for success.
Today, we’re going to hit on the high level questions, insights, and targets that you need to craft a winning market entry strategy. So buckle up, we’re about to make the murky nature of MES’s a little clearer and experience the old phrase, “Chance favors the prepared mind.”
A Clear, Simple Strategy Takes the Day
In my experience, the #1 killer of market entry strategies is a lack of clarity. Imagine a car where each of the 4 tires pointed a different direction. They can each pull as hard as they want, but a lack of alignment leads to enormous amounts of wasted effort when it comes to actual movement.
Market entry strategies are a little bit more complex from your average marketing campaign by nature, which is why it’s even more important to keep a firm grasp on a clear strategy.
I’ll give you an example – this is the template I like to use as a starting point for my clients crafting an MES:
“We will enter __(target market)___ leveraging ___(specific strategy)______.”
Yes, the template really is that simple! It’s what goes in the blanks that makes all the difference. Let’s jump into it.
You Need a Crystal Clear Target Customer Profile
When you’re breaking into a new market, it’s tempting to build your strategy around your competitors in an attempt to differentiate. It’s true that differentiation is another critical piece of your MES, but if you build your differentiation around your competitors first, you’re missing the foundation of your strategy.
When entering a new market, you need to create the clearest picture possible of your ideal customer. After all, your entire campaign depends on your ability to understand their wants, needs, pain points, and opportunities for unexpected delight.
In this area, I have two core recommendations.
Expanding into Tangential Revenue Streams
If you’re looking to grow your existing business through a new revenue stream, target opportunities that are tangential to your current offerings. Your familiarity with your current customer base and your brand recognition will put you on track to successful expansion.
Breaking Into Entirely New Markets
If you’re entering a new market altogether, bring decision makers to the table who have experience with your target market. Even the best ideas are rarely ever successful in their first iteration. You need people who have encountered your target market first hand and can help you anticipate points of failure as well as opportunities.
Have a Clear, Compelling Advantage to Build Around
Once you are confident in the opportunity you see in the market, you need to be equally confident in the strategy you plan to focus on in order to differentiate.
I don’t recommend that businesses try to “Frankenstein” their competitive advantage and try to present too many features or benefits at once. Especially since it’s rare that any business can outperform established competitors in a variety of areas.
It usually ends up with MES’s being built around what I like to call “equally credible claims”--or claims that are really just table stakes, things that almost every competitor could also say.
If you’re going to turn heads, you need to take the pain point or opportunity you found in your target market and identify a specific tool that you can use to take advantage of it.
Customers in existing markets already have a picture of what they expect from providers - you only need one point of differentiation that matters to your perfect customer to turn their head.
I’ll give you an example - I worked a while back on a company that wanted to grow their revenue in their segment using service appointments. You know those frustrating arrangements where your provider promises to be out sometime between Tuesday at 9am and 4 years from now?
This company decided that this specific pain point would be their opening. Even better, they didn’t just commit to being punctual and practical, they leveraged a unique software that allowed them to have fewer late and missed appointments than any of their competitors. Their strategy paid off as they cultivated a reputation for being far easier to work with than customers were used to.
See what I’m getting at? You can carve out a solid place for yourself, even in crowded markets, if you can:
- Clearly identify what matters most to your customer (and what they wish was different)
- Confidently fill that gap with a tangible tool, process, or resource
So look for that core lever that you can use to create space for yourself. It might be a software that allows you to deliver your offer more consistently and quickly than your competitors.
It might be a product or service feature that solves a problem other competitors have overlooked. Maybe you’re looking for an innovation from another industry that hasn’t been pioneered in yours yet.
Find that tool, and you’ll find your market entry strategy.