As CEO, you have a few options to accelerate growth. You could:
- Find new buyers in your current market with better sales and marketing strategies
- Buy into a market with strategic acquisitions or
- Enter high growth markets with new products.
The last option, entering a new market, has key advantages. It also has risks that require careful examination. Today we’ll outline three critical areas to review when creating or evaluating your new market strategy.
Before we dive in, let’s look at a new market scenario CEOs are facing…
The Greater the Opportunity, the Tougher the Questions.
A B2B U.S.-based company is looking to expand to China. The market segments you’re serving here are thriving there.
Chinese executives have the same needs as the American executives who buy from you. China looks like an excellent opportunity. Do you make the move?
Wait a moment –
Can your U.S.-based sales force sell your product to a Chinese executive? Probably not.
So what’s next? Should you:
- Hire Chinese nationals to establish a Chinese sales force?
- Look to competitors or companies you admire that have expanded there?
- Enlist China-based channel partners to represent your goods?
- Partner with a company that’s already established there?
These are big questions. The variables are complex. Let your segmentation analysis be your guide.
The Three Layers of Insight You’ll Need to Succeed
Think of segmentation as a three-layer cake: market, account, and buyer. Your analysis must include them all. If it doesn’t, you’ll be left with a half-baked sales strategy.
Click here to download our Segmentation Questionnaire. It contains diagnostic questions for evaluating your market, account, and buyer segmentation analysis. It’s a helpful guide to keep handy while reading this post. Get it here:
Let’s get started.
1. Market Segmentation
Which markets will you target? Which sales channels will serve which customers? Many CEOs feel overwhelmed at this point. So they pursue markets that are too wide and miss their target.
Market segmentation analysis provides a clear understanding of the market segment. It helps define buyer subsets. It enables you to allocate your sales and marketing budget in a targeted way.
Before you launch in a new market, your sales strategy should include:
- Total Available Market—How big is it? What is its growth rate?
- Competitor Analysis—How are your competitors marketing and selling in this market?
- Identification of the “Strategic Market Group”—Group market needs, and determine how they’re changing. Which competitors are targeting which market groups? How is your company positioned to serve these groups?
- Product Market Mix Assessment—Determine the go-to-market strategy for each product in each market.
- Sales and Marketing SWOT Analysis—Your SWOT (Strengths, Weaknesses, Opportunities, and Threats) must be addressed. How will you maximize strengths and opportunities, shore up weaknesses, and minimize threats?
2. Account Segmentation
Sales leaders must be armed with revenue/profit potential by account, product, and solution. Otherwise, your sales team will be forced to navigate by trial and error.
In your sales strategy, you should look for:
- Ideal Customer Profile—Which companies stand to benefit most from your product/solution?
- Master Account List—Accounts should be ranked by revenue potential for each product or solution.
- Account Scores—Each account should be scored in relation to its ideal customer profile.
3. Buyer Segmentation
You need to understand your buyers and how they make purchase decisions. In the U.S., executives are the decision makers. Internationally, decisions are often made by committee.Tribal knowledge won’t help you. Nor will projecting past experience onto the future. You’ll have to start from scratch.
Make sure your sales leader has outlined:
- Buyer Personas—What do these buyers care about?
- Buying Process Maps—How will buyers purchase your product or service? Your strategy should include a step-by-step workflow diagram illustrating the process.
- Buyer Value-Chain Analysis—What will buyers value most in your salespeople (deep product knowledge, industry knowledge, etc.)? This will determine how you’ll train your sales force.
- Critical Success Factors—In what area(s) must the company be best in class in order to succeed? You must challenge your sales leader’s assumptions. Ask, “Can we be best in class?” If you can’t bring old strengths to new markets, you must develop new ones.
Once you complete these three analyses, you’ll have the new-market intelligence you need. You’ll understand your buyers and their needs. You’ll know how to solve their problems. Competitively speaking, you’ll know what you’re up against.
Next steps: Narrow your expansion options. Clarify your goals. The more targeted your strategy, the more power it holds. And the better your chances of success.
SBI has the tools to make this process manageable. Read our case studies on market segmentation and buyer segmentation. Or download our Sales and Marketing Assessment. It covers SWOT, critical success factors, competitive assessment, and more.