Learn how to spot the best market opportunities and create winning growth strategies to help your business succeed with this guide at Feefo.
If you own a business, you need to understand its identity, its place in the market, and where it’s headed. Approximately 80% of new businesses survive their first two years of operation, with that figure decreasing to 65% for those that reach the ten-year mark.
So, what does it take to find the right niche in the market and create a strong business plan with the best chances of surviving the first few years of trading?
In our guide, we take a look at how you can identify the right market opportunities and develop a growth strategy that takes you where you want to go.
A business growth strategy is a plan of action that details how a business will expand over a given period of time. It will be unique to your business and influenced by the industry you’re in, the types of customers you serve, and the market opportunities on offer.
Define your value proposition, identify your target audience, and study your competition — then take action whilst the iron’s hot.
A good business growth strategy is made up of a whole host of tactics and practices, from customer acquisition to product development and customer reviews.
We’ll explore some of these in more detail later, but for now, let’s start with how to identify a good market opportunity.
A market opportunity is, put simply, a gap in the market. It’s something, someone, or somewhere that existing businesses are not addressing but that you can capitalise on and use to quickly grow your business.
Taking advantage of one is easier said than done, however, as there are plenty of other businesses vying to push ahead of the competition.
Identifying a good market opportunity for your business boils down to four key areas:
Let’s explore some of the techniques you can use to answer these four questions.
Firstly, you’re going to want to establish exactly who it is you’re selling to.
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, and so on, which you can use to help estimate the market size.
‘Softer’ variables, such as attitudes, lifestyle, and personal values, can help you determine the motivations behind why people might buy your products and influence everything from price to design.
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.
You can give each of these personas an identity, with a name, age, and personality. The more detailed your customer personas are, the easier it is to understand 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’s growth strategy in the long run.
Every consumer purchase falls into one of the following categories:
Purchasing patterns tell you the frequency, quantity, and value of the purchases your target audience is making.
Ask yourself:
Consumers typically go through five stages when making any purchase:
This is when a consumer realises they either need or want to make a purchase. For example, 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 purchases from a variety of sources. These could include asking people for recommendations, reading reviews, talking to a salesperson, clicking on adverts, and more.
Consumers will have a variety of options to choose from in terms of product or service type and the brand or business. The consumer will need to decide what type of headphones they want and their chosen brand.
They’ll weigh up the features, costs, and advantages of each product or service so they can come to a decision.
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.
Your customer has made their purchase, but are they happy with it? Do they know whom 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, but 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 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.
Collecting and analysing product reviews is a great way of getting valuable feedback about new and existing products.
Sentiment analysis tools, like Feefo’s Customer Sentiment Insight, can 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.
Use these insights to improve your products, service, and how shoppers perceive your brand.
Once you know which products your customers prefer, you may decide to focus on growing your most-loved product lines or switch up your marketing efforts by making sure you’re highlighting the features your customers love most about your products.
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 complementary products could affect you.
It’s important to remember that it’s not just idly sitting back and watching how others are getting on. Building relationships and partnering with complementary businesses can benefit your customers and lead to new market opportunities.
Uncover the major strengths and weaknesses of each of your rivals and use these findings to guide the direction of your business.
Competitor benchmarking uses a variety of metrics to help you compare your performance against your main competitors. You can compare anything, be it market share, sales, or even your Net Promoter Score. This is your opportunity to pinpoint exactly how you measure up and where your next market opportunity might lie.
Look at your direct competition if you want to see how you can immediately improve. Choose the major players in your industry if you have big growth expectations, or pick those that have overcome obstacles if you want to avoid getting caught out later down the line.
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 are a few places you can start:
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.
There is plenty of data you can use to benchmark against. Some areas, like brand awareness, might be a little tricky to track accurately, but site traffic, Net Promoter Score, and social engagement are all measurable if you know where to look.
Here are a few things you can start to track to get a better understanding of how you’re performing against industry averages:
Find out as much information as possible about your new industry so that you can better identify the market opportunity on offer. Take a look into:
Get to grips with the market itself or the business environment factors that could impact the direction your business is headed. Whether it's political decisions, a change to the law, or a wider economical shift, there are plenty of external factors that could potentially disrupt or even improve your chances of success.
Keep a close eye on:
Using customer feedback can help you quickly understand 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.
Your priority should be building a strong brand that has long-term appeal. Quick wins can give 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 more valuable.
Here are a few options to help you get started:
To find out what your brand’s reputation is, 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.
You can use this positive feedback to boost your brand reputation. You can share them on social media, make them part of your PPC campaigns using Google seller ratings, and use them to influence any future marketing campaigns.
It’s also worth considering if you’re doing anything that could harm your reputation. For example, responding poorly to or ignoring negative feedback will damage the relationship you have with your customers.
Regular anonymous employee engagement surveys give your staff members the chance to air any grievances, share what they love about their jobs, and 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 that you care about their opinions, even when they’re less than positive.
With 85% of customers ready to pay more for a better customer experience, it’s time for businesses to stop thinking about selling products and focus on selling experiences.
You may have some great products under your belt already, but to keep up with the competition, you need to have a product development strategy in place.
Consider:
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. This will ensure you’re creating products that people care about. It will also improve the relationship you have with your existing customers as they will feel involved in your company’s growth and success.
In turn, this can help boost customer loyalty and attract new customers which can help you to grow your business.
Before you launch into building a new customer experience-focused growth strategy, asking your customers for feedback can tell you what might be missing from your current offering. You can then create personalised brand experiences with these insights; tailor them to what your customers are telling you they actually want.