Successful CEOs and entrepreneurs in midmarket companies are passionate about their businesses. They start them, bring them out of the ground and build tremendous success stories – and, often their passion soon eclipses their ability to focus first on markets and customers served. That is until the story’s success starts to take a turn.
Understanding your market is the key to getting ahead of the business evolution curve. Like most things in life, it’s easier said than done. Where to begin? Start by defining your target market and your customer profile. Knowing your customers is a critical part of a successful strategic thinking process, especially as your business begins to grow.
Define Your Target
The challenge is that the more your company grows, the more important it is to understand your market. Defining your market gives you a greater understanding of where your next opportunities lie. Is it selling deeper into an existing market? Is it finding a new territory for existing products? Is it international in scope?
Get Clarity on Your Customer Segment
You can think about your market in several ways, for instance geography, products or customer segments. You may decide you serve five states around Nebraska with dental products. You may define your market is homes with incomes above $100,000 in a five-county area around Cleveland.
You and your leadership team must ask yourselves questions to help you capture, clarify and codify information about your market. And once you have the answers, ask them again. Customer needs and wants are constantly shifting and so should your answers.
Use the Resources at Your Fingertips
This market definition process is a terrific opportunity to get input from people everywhere in your company. If they are ‘customer facing, by phone or in person, your people are a valuable source of information about market trends. You can facilitate their contribution to the discussion using current technological tools and data capture inputs – it can be as simple as a stand-alone contact manager or a sophisticated system ‘in the cloud’, depending on your budget and IT resources.
Remember too, the Internet is a valuable resource. You can buy market information and studies from a large number of web-based services. For a few hundred dollars, they can sell you customized to semi-customized market studies that get right down to the ZIP Code area. There’s no longer any excuse to not understand what’s going on in your market. Get creative with Google searches and see what you can discover to help fuel your strategic thinking.
Internships are another opportunity to gain market knowledge that many midsized companies overlook. In every city of significant size across the country, you can find colleges with internship programs for executive MBAs, regular MBAs or undergraduates. For little or no cost, you can enlist the work of talented people in executive MBA programs or freshly minted and about-to-be-minted grads. At the same time, you get to “try out” a potentially great new employee for your company.
How? Spend a little time researching the faculty at the graduate school of business near you. Look at the professors profiles on the college website or LinkedIn. Reach out to them and start a conversation about what you want to accomplish. Create a specific ‘beginning-middle-end’ project with a defined outcome that will provide the market insights you need.
Internship and Executive MBA projects often last for an entire semester program. It is a several month long project, so for you ‘fire, ready, aim’ types, a little patience may be required. The results are worth the wait.
Spot Trends and Connect Dots Differently
This gather, organize and codify approach to market intelligence is the starting point of better market understanding. As Roger Martin observes in his work on “How Great Leaders Think”, the best leaders have the capacity to hold opposing thoughts, concepts, and information in their consciousness at the same time and connect the dots in ways no one else sees. Gathering and analysing marketing information can be your key to identifying trends that will affect you and your business in the years ahead. It’s a way to ‘see around corners’ as you move forward.
“Just as one would not build a house on sand, one should never undertake a marketing program that is not built on a firm foundation of market knowledge,” David J. Freiman says in What Every Manager Needs to Know about Marketing. “It is remarkable and alarming how little managers of businesses really know about their markets and the other elements of their outside environments.”
Understanding your market is a vital component of a robust strategic thinking program. Making it part of yours can pay big dividends in growing your company
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