Are You Selling to the Right Market? How to Know for Sure
We agree with Peter Cohan, author of the Inc. article “4 Ways to Know You’re Selling to the Right Market”, on his thoughts on the importance of selling to the right market and solving the right customer problems. As entrepreneurs begin the process of scaling their business it’s not good enough to just find a customer problem to solve, the key is to find a big problem to solve
So often we see entrepreneurs that go to market with a solution in search of a problem. Success dictates that this go to market strategy be inverted. The entrepreneur first must intimately understand the customer and the business problem that handicaps that customer. They now proceed with providing an efficient and cost effective solution to that problem.
Business success today is not just about being innovative, what really counts is to be needed. Part one of the market model is to understand the customer. Part two is to be comfortable that the initial market you serve is large and that you can easily identify adjacent markets and segments that look just like the initial market you have targeted. Successful entry into new markets mandate that companies clearly define the differing and unique characteristics of each new market segment being targeted. This critical knowledge becomes the foundation for new product features, target marketing methods, focus and sales positioning.
Another key consideration in target market selection relates to a company’s ability to competitively differentiate themselves in the markets in which they intend to compete. Always remembering that the bigger the market the bigger the competitors and the number of competitors in which they must compete. In making the right bets on target markets there can be great wisdom in selecting smaller, secondary, underserved markets where a company can be a big fish in a small pond. The strategy of targeting and owning a small pond, then in annexing and owning other small ponds can become a winning formula and market strategy.
A final point on selecting and selling to the right markets relates to focus. Too many companies find themselves in perilous waters when their strategy is to become all things to all people. Intelligently determining what is vitally important to a business such as target market selection and then being very intentional about how you allocate time and energy to serving that market. The ability every day, to consciously master the filtering and prioritization of where time, energy and resources are spent is a critical component and attribute of a successful business model and business team.
Identifying and solving a big enough problem, accuracy in the selection of the right target markets, ability to competitively differentiate in those markets and maximum attention to focus are business musts. Couple these concepts with great execution and entrepreneurial companies will be on the cusp of creating a highly successful investment grade business.