When you’re beginning to grow a business, knowing how to enter into new markets is important. For many, at first, this might mean casting a wide net over a broad list of potential customers and seeing what sticks.
However, while this approach might provide some small, initial wins, this isn’t a sustainable strategy long term. These markets are often oversaturated with competition, which leads to high customer acquisition costs and low profit margins.
A better strategy to start with is focusing on the markets others have forgotten about. While these customer segments might be much smaller, they’re typically underserved.
This means with the right business approach, you could easily increase your customer engagement and convert more new business than you might realize.
Below are seven effective strategies you can follow to position your business products in these market types.
1. Get to know the market
The first step you should take when approaching any new market opportunity is to get to know the customer segment. This gives you the information and added context you need to understand the best ways to introduce your brand and products.
No different than in broad market types, underserved markets also require you to invest a certain amount of time and resources before you can be successful. Get to know the demographics intimately and identify the core issues that your brand might want to focus on helping them solve.
For example, if you were marketing a helpful HOA management solution, the first thing you would want to do is know the common issues that property managers struggle with. Then, build your product features and overall value around solving the issues directly.
Rebecca Madro
2. Define your measurements for success
Entering into an underserved market will likely mean you’ll need to create new measurements for success.
Unlike broader markets that many times already have proven benchmarks or typical conversion rates, you’ll be entering into somewhat uncharted territory. This may mean having an open mind on what success looks like to your business.
For example, rather than focusing strictly on conversion rates, you might want to consider tracking elements like website engagement rates, email subscribers, or feedback submissions.
These types of metrics, while not necessarily tied to sales numbers, can give you a good idea of how well your brand is being perceived and if there are enough positive signals coming from the market.
3. Think about cost and accessibility
While finding an underserved market segment can be valuable, it’s also important to consider “why” other businesses haven’t been able to offer them what they need. One of these areas to think about is product accessibility.
Not all businesses or consumers may have the same access to technology or other solutions that allow them to maximize the value of new products or services.
For example, a product may not have integrated support for multiple languages, which can be a barrier for some consumers.
Another factor to consider is the price. While certain HOA products and services may offer multiple benefits to businesses, if they are too expensive with no way to lower initial costs, they may not be suitable for certain market segments.
4. Establish brand credibility
Smaller market groups typically have strong connections with their local communities. This means word travels fast, and it’s important to make sure you’re focusing out of the gate on building a credible reputation.
One way to get ahead of this is by partnering with local organizations or other trusted sources. This is a great way to introduce your brand in a more natural way, and helps to give your target audience more confidence in what you represent.
5. Develop marketing and distribution plans
It can be tempting to try to rinse and repeat your marketing and distribution approaches when transferring between broader and smaller markets.
However, it’s important to remember that underserved markets may respond differently to these initiatives.
If your intended market doesn’t have access to the same distribution networks or connects with brands differently than other market segments, you’ll need to account for this.
Consider the specific needs of the market you’re trying to reach and create a sales and marketing approach that’s unique to them.
Rebecca Madro
6. Create a sustainable business model
When you’re conducting market research, locating a potentially underserved market can be a potential gold mine.
However, before you get too excited and start redirecting your advertising dollars, it’s important to create a sustainable business model you can use to help you approach the new market strategically.
You want to make sure the marketing strategies and sales approaches you use are going to last you for the long term. This likely means creating a unique budget for the market and setting very specific, measurable targets to help you test the waters and make sure the new direction is viable for the business.
While getting into an underserved market as quickly as possible is important to beating out the competition, you don’t want to sacrifice the quality of your products or services simply to gain a quick revenue surge.
It’s still vital that you approach these markets with the care and consideration they deserve. This will ensure the efforts you’re making will provide long-term, sustainable results for your business.
7. Evaluate your local competition
A common mistake businesses make when moving between one market to the next is assuming their competition stays the same. However, in most cases, you’ll find smaller markets may have a completely new list of brands and products that will directly compete with your own.
To make the most of your efforts when expanding into smaller, more diverse market sectors, take the time to conduct a thorough competitive analysis.
This helps you see exactly where certain gaps in product or service availability may be and allows you to build more impactful sales and marketing strategies.
This doesn’t necessarily mean you should recreate your brand or be inconsistent in your messaging.
However, it allows you to focus certain elements of your website or content on specific niche topics, helping to showcase your relevancy in the market without looking like a completely new business.
Start growing the business in new markets
Smaller, underserved markets are a great opportunity for you to capitalize on low quantity, high-value consumers.
With less competition to deal with and more opportunities to get brand exposure, you can execute the strategies discussed to help you quickly obtain new leads and convert more sales.
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