Expansion into new markets can be a good way to grow your business and earn more revenue. It can help you level with the competition, grow your customer base and satisfy existing customers’ growing needs.
However, it takes a disciplined approach to properly assess the potential for growth and make the right decisions.
Savvy entrepreneurs should avoid jumping into new markets simply because the opportunity presents itself or because they like the idea. If you expand before you’re ready, you will be setting yourself up for failure.
To create a solid foundation for success in new markets, you have to designate an appropriate amount of resources to conduct market research, analysis and planning. Here are five powerful tips to help you make the move to a new market:
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Understand Your Customer
Before you expand into the new market, you should have a good understanding of your customer. To do this, conduct a complete market analysis.
This should take into account your target customer’s demographics, common interests, location and unmet needs.
You have to ask yourself some important questions: Is there any untapped potential in this market? Is there a disconnect between what the market offers and what your customers desire?
The answers to these questions will help you select a market based on its strategic fit and your ability to service it.
Study and analyse the data carefully and listen to your gut instinct as an entrepreneur. For example, your data may show you that your business is likely to thrive in Town A instead of Town B.
Review Your Current Business Model
With the expansion on the horizon, you need to review your current business model, product or service offering, and target audiences.
The goal is to find areas for improvement. Assess the types of solutions you provide to your clients and customers and consider how you could improve them to optimise their experiences.
Bear in mind that your current business model might not work in a different market. In such cases, you need to tweak aspects of your model to make it more suited for the new market.
For example, if you’re eying a more upscale market, you may have to change your pricing model or advertising strategy.
While at it, assess your internal capabilities to determine whether you’re ready for the expansion. Decide whether you have the infrastructure, sales channels, and customer relationships in place to launch in the new market. This will help you determine where to leverage your core competencies.
Get Feedback from Current Customers
A brilliant way to review your current business model and capabilities is by surveying your current customers. Your idea of what your strengths and weaknesses are may be different from your customers’ perceptions.
It’s, therefore, important to know exactly what your customers like or dislike about your products, services and customer care.
Obtaining customer feedback will show you what needs to be fixed and the strengths to capitalise on. The best way to get customer feedback is through short surveys.
While incentivising surveys works well, you can also try explaining why their feedback will be helpful to your company. Most people are happy to provide feedback if they’re assured that it will be helpful and useful.
Customise Your Marketing Content
You must speak to the target customers’ specific situations in order to reach and, more crucially, convert them. Utilising customised marketing content is a fantastic approach to accomplish this.
Fortunately, you can include some of your previous content in your new campaigns in the desired markets.
For example, if you already created an e-book that was well-received by your existing customer base, you can simply create a similar version for the new market.
All you need to do is update the insights and include references based on the new market, its trends and preferences.
For example, let’s say you own a moving company and are considering expanding into a new town. While the service you offer in both markets is fundamentally the same, the new town may have its nuances. It may be more rural or urban, for instance.
You need to make customised marketing content and materials targeted to the needs and preferences of customers in the new market.
Get Your Finances Ready
Your finances play a big role in determining if you’re ready for expansion into new markets. If you need a business loan, you have to be thorough with your presentation – especially if you’re a small business with limited financial history.
As a small business, you need to have a strong business plan that shows why the expansion is financially viable.
Explore other funding options such as letters of credit, business grants and angel investors. As with loans, these funding options will also want to see that you understand your market and that you have a good chance at succeeding with the expansion.
Before you can start to seriously invest more into your expansion strategy, you should have your financial ducks in a row. With money in the bank, you can take the bold step to expand your business into new, exciting markets.