Written by Nobuhle Ncube
Developing a deep understanding of your market as part of your go-to-market strategy is crucial for informed decision-making that can drive the growth of your customer base. This requires being attuned to market dynamics, customer needs, and emerging trends, as well as knowing your real competitors and substitute products.
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Conduct market research: be thorough but also pragmatic
Market research can be a daunting task if you do not make the scope of the research clear. Ask yourself: what do you HAVE to know about your market today to be able to provide value to customers and grow? The answer to this question may vary based on the growth stage of your business if you are entering a new market or if you want to increase your market share in your existing market.
There will be some practical questions, which sales and marketing teams need answers to, like Where is my customer? Where do they prefer to buy? And what product benefit is most important to them? Who are we competing with? The product teams may want to know what the biggest pain points are in the end-to-end customer journey or to uncover insights about how competitors are offering value to customers.
With all of these questions, there has to be ongoing discipline and clear communication about what is outside of the scope of the research project. Start with what is most important to your current strategic goals and be realistic about what is achievable in a single market study based on the time and budget you have available.
Segment your market: get comfortable with some complexity
If you have ever been a part of a lengthy or difficult customer segmentation exercise, you may be inclined to avoid segmenting your market due to the potential for complexity. Segmentation is essential, however, because the market is rarely a "sea of sameness". Segmentation can be done along demographic (B2C) or firmographic (B2B) lines like age, location, and occupation/industry but can also be psychographics such as motivation for purchase, values, and ambitions. You can also segment based on where, how, or what the customer buys from you and other businesses like yours.
The pitfall to avoid here is over-segmentation where you have too many segments with very little business value in the differentiation between them.
Define which segments you will NOT be targeting
The old adage "you cannot be everything to everyone" often proves very true in business – even in large firms with diverse product mixes and large sales and marketing budgets, it is a necessity to define who falls outside of your desired target market. That way, you can be laser-focused on delivering value that speaks to the needs of a specific segment or segments. Then you can match products (and their features) to segments, reducing the waste associated with trying to sell every product to every customer.
Disseminate and use the research insights across business units
The insights from your market research should be shared internally so that there is a cross-functional understanding of the market being served and its needs. This allows various teams to connect the choices that they make in designing, pricing, packaging, and delivering the product to key insights about the customer's needs and preferences.
Defining your market and refining your understanding is an ongoing and dynamic process, and sometimes it is valuable to ask your captive audience (existing customers) for regular feedback to test your assumptions and enhance the insights from market research projects.
Reach out to Nobuhle Ncube to leverage our expertise in go-to-market strategies and gain the insights needed to drive your business’s growth.