As your business grows and expands, it’s natural to realize it’s time to investigate new markets in which you could flourish. Many businesses begin considering new market entries once they’ve found and been successfully recognized within their total addressable market (TAM). Meaning they’ve exhausted every available revenue opportunity within their current market and can no longer acquire more of it. Often, the confidence boost gained from being in a position to expand beyond your TAM can cause businesses to overlook potential pitfalls to new market entry, resulting in failure.
Whether you’re looking to expand your business to a new demographic or even a completely new geographic location with its own unique culture, new market entry always comes with risks. For every successful market entry, about four others fail — meaning that the odds are already stacked against you. The best way to combat this problem is by learning what issues most often lead to failure in market expansion and how best to strengthen your business against them.
1. Lacking Knowledge About the New Market
The first mistake businesses often make in new market entry lies in a lack of research. Understanding your new target audience is crucial not just for marketing, but for sales as well. The marketing team may garner valued interest in your business, but it’s up to the sales team to translate that interest into revenue. Having an in-depth understanding of your new market’s values and preferred methods of communication helps your sales team better understand ways to approach, manage, and close deals in a way the new market will receive well.
Aligning your value propositions and messaging with your new clientele is absolutely essential when it comes to new market entry. Proper research on your clients’ buyer personas, their needs, and pain points allows you to begin tailoring your marketing and sales approaches to the new market’s unique set of needs and values.
Solution: Sales Outsourcing
Combatting a lack of knowledge is easily solved by doing proper research on your new market. Relying on past successes alone cannot give you an informed picture of the market you aim to serve, so it’s absolutely crucial that you provide both your sales and marketing teams with enough information to appeal to exactly who your new market consists of and what you aim to solve for them.
If you’re looking to expand to a new market quickly, you can bolster your research and in-house knowledge by outsourcing your sales team to experts in the new industry. Outsourcing minimizes risk by providing you with a sales team already informed about your new clientele’s pain points, values, and communication style. This makes new market entry smoother by eliminating any learning curve your sales team may need to adjust to.
2. Not Having a Clear Message to Communicate to Your New Target Audience
It may sound cliché, but not knowing yourself well enough can hinder your business as you expand to new markets. Having a strong grasp on why consumers patronize your business helps you better communicate with your new market. What makes you stand out from your competition, and how does it better benefit your target audience? Often, businesses have yet to answer this question due to never needing to — in your proven market, messaging and aligning with your audience comes easily, and you may find yourself at a loss when explaining your value to new customers.
Solution: Sales Training
Ensuring your sales team is fully aligned with your business’s values and messaging is absolutely essential for new market entry. This is where training becomes a crucial part of your business’ expansion. Before entering a new market, invest in sales training and coaching to better align your team and prepare them for the obstacles of entering a new market. Sales consulting experts can help empower your team to align on messaging to present a clearer, more concise picture of your business and the ways it can help your new market.
3. Ignoring Feedback Instead of Leveraging it to Make Changes to Yield Positive Results
Often, businesses dive into new markets despite data indicating a low likelihood of success. Remember that your product or service performing well in a proven market may not mean success in a new demographic. Be cognizant of the research and data that indicate potential performance before you begin taking action in a new market entry. Sometimes, business leaders have a hard time accepting their product may need a few adjustments or minor tweaks before heading into a new market, which can leave your business vulnerable to financial risk when expanding your audience.
Solution: Data-Driven Decision-Making
Before making significant moves to enter a new market, listen to research and customer feedback. Customer criticism and poor market indicators are not always negatives: leverage this data to improve your sales and marketing teams’ messaging or even adopt a few changes in your product itself.
There is no one way to totally eliminate the risks of new market entry, but you can prepare your business against potential pitfalls to strengthen your ability to expand your consumer base. Proper research, messaging, and market adjustments can position your business to enter a new market with minimal hiccups.
If you’re preparing your business for a new market entry, get in touch with us, and our expert sales consultants will help train and prepare your sales team to best adapt to your new target audience.