- Notable risks when evaluating new market opportunities or creating a new product are time and capital.
- Testing interest subtly through blogs and content can provide valuable data-driven insights into potential consumer demand.
- Understanding existing and potential customers through social listening tools and surveys are important elements, however, can be costly.
- Collating data through a centralised solution allows businesses to gain real-time insights and act swiftly to invest further in higher-performing segments/channels.
In any business, establishing ourselves within an industry and sustaining growth is a challenging process. We must be adaptable and optimise our existing markets while continuously testing new products and potential new market opportunities. However, entering new markets can come with significant risk, most notably capital and time. There can be pressure from stakeholders, investors to get the move right the first time. In reality, we know it’s impossible to identify new market opportunities and get it right every time.
There are some ways we can mitigate our risk and test new market opportunities through failing fast, pivoting quickly and undertaking clever market research without exposing ourselves to over-investment in time and capital.
1. Consider white-labelling to explore new market opportunities
There’s a chance that your favourite DJ didn’t produce the music they label under their brand. Similarly, in the product world, the food we eat or the clothes we wear is potentially a “white-label” product from the actual creator who sells the product under the label. When considering a new product, we can employ the same technique by white-labelling an existing product from a mass producer in the market under our own branding. Doing so will minimise our investment in full product development, and we can collate data from our customers about product functionality, identify improvements and analyse demand from different segments to guide future planning. If white-labelling isn’t an option, test drop shipping the product from another supplier directly.
2. Social listening through tools and direct
Social listening tools are an efficient way to identify new market opportunities. We can use various social listening tools to test total product/service mentions for our offering and associated sentiment in addition to brand mentions over time (increasing or decreasing brand equity). Collate this data into reports and discover if a challenger brand with a new product offering is trending upwards in brand mentions or if a potential new product offering is trending in the right direction.
These metrics are great for an established business needing to defend market share, stay competitive and innovate – but they are expensive. Depending on the available budget for this kind of measurement, social listening tools like Meltwater and Talkwaker start from $8K AUD per year. Third-party insights tools like Global Web Index can also be a significantly expensive investment depending on your requirements.
If you’re not quite ready for this investment, alternative, light-touch methods of staying on top of trends include signing up for TrendWatching or other similar services. For those who are budget-conscious, join forums and community groups on mediums such as Reddit, Facebook, Quora and Google Trends and type in keywords into the search bar related to the product/query and draw data manually on consumer feedback and trends. Employing this tactic is particularly useful for startups who may have limited ability to leverage an existing audience for product development.
3. Create teaser content related to the new market opportunity
Create a blog or test out content on socials that subtly speak to the new idea or market, analyse the data and determine whether the opportunity is worth investing resources in. If the content resonates through a higher time on site, reduced bounce rate or increased levels of social media engagement, it could indicate the idea is worth further researching.
An example of this in action for an online pet shop would be testing out whether to invest in producing a large order of dog car seats. Post photos of dogs in car seats social media and do a blog post on tips to keeping a dog safe in the car. If the content is engaging and triggers interest from, this could indicate a lucrative new market. Repurpose this blog once the product is created and include links to the new product.
We can test possible customer segments as well as new products in this process, by adding UTM tracking codes to the content when advertising across segments, analyse and determine the better performing segments and use this data to guide advertising when launching a new product. Or if segments are based on top-level data such as demographics and geographic location, segment the traffic in Google Analytics to understand who is reading.
4. Segment, research and analyse existing customers and potential markets
Customer lifetime value reports are a must-have for any business. These invaluable reports provide an overview of how much value is generated from each new sale, which has a significant effect on how much is available to invest in other areas of the business such as the sales team or new machinery.
Create customer lifetime value reports of existing customers, create a customer profile of the top 2-5% customer, (the most valued customer segment) and then target this audience through digital advertising for surveys and new products. Alternatively, survey the existing top 2-5% customers and undertake extensive product and behaviour research to help determine potential lucrative new market opportunities.
The top 2-5% of customers are the most profitable and could be the difference between success and failure of a new product. Take the time to understand their motivations and desires and use this to guide product development. In addition to surveying the top 2-5% customers, undertake in-depth research of identified growth segments as well and the existing customer database and utilise these insights to drive data-driven forecasting and decision making.
5. Centralised data solutions with real-time reporting
All of the above tips have one critical, common element – data. When determining a potential new market segment or investing in a new market opportunity, it’s vital to have access to easy to consume, real-time data.
Having access to this type of data can a) build out segments/customer lifetime value reports efficiently and b) allow us to pivot quickly to changing market conditions, respond swiftly to poor advertising results, creating the ability to be agile to invest further in areas that are performing strongly.
By creating a centralised data solution that is accessible across the business, we can provide organisational silo-breaking, cross-functional data. Without a centralised data solution, reports can be inefficient to compile and can lead to a lack of visibility over vital business information such as marketing attribution details, high performing segments and potential product opportunities, all vital reports required to discover new market opportunities.
Centralised data solutions could include an existing CRM, or can involve more complex builds such as a DMP (Data management platform) or a CDP (Customer Data Platform). More complex solutions such as a CDP can provide a full 360 view of the customer across all customer touchpoints, providing a hyper-personalised customer experience when compared to traditional marketing.
By investing in more complex solutions such as a CDP, we possess the ability to implement hyper-personalisation across digital marketing execution (such as email and digital advertising placements). A CDP also allows us to utilise data from these targeted segments and provide real-time reports on product performance to provide valuable, in-depth insights, providing confidence and clarity in decision making.
Got questions? Let us know!
If you’re ready to embark on a digital and data transformation journey to give your business real-time market insights to fend off the competition, lead and stay ahead, get in touch with us below. We’re offering a free, no-obligation, 30-minute consultation to all new enquiries.