If your company only serves a single market segment or couple market segments, you’ll eventually run out of prospective customers to go after. Your company’s growth will plateau because everyone in your target market will either be a customer already or have an alternative solution.
By expanding into new markets, you can increase the potential customers and revenue you have access to. The more you do that, the easier it will be for your company to grow.
There are multiple ways that you can expand. You can move upstream, downstream or into new verticals. Prior to putting together a market expansion strategy, you need to identify a market to go after and confirm that it is addressable for your company.
Some key areas to assess include availability, traction and addressability (in terms of language, economic strength, technology adoption).
“What is the size of the new market compared to others, or how much opportunity is there? How is the company currently performing in this market? How well do our products or services address this market?” prompts Client Success Team Lead Dylan Berno.
Understanding those factors will help you determine if it’s a market you can expand into.
Align Marketing and Sales on Target Market
Once you’ve identified the market you’re going to expand into, the next step is to compile foundational assets for marketing and sales.
“Initial alignment amongst sales and marketing is critical, and sets the foundation so you can be successful there,” Dylan says. “That foundation allows you to design your narrative and tell the story about what you’re solving for that pains the prospect.”
ICPs and Buyer personas
Take the data you gained from your market evaluation and turn it into ideal customer profiles (ICPs). ICPs will help your marketing and sales teams target the right leads as you work to generate demand within new market segments.
Additionally, be sure to evaluate your buyer personas to determine if you need to adjust them or create new ones to reflect the decision-makers who will be involved from this new audience. Your buyer personas will enable your teams to understand what messaging will resonate with the prospects they’re communicating with.
The roles involved in the buying process for the new market might differ from the existing markets you work with, so it’s important to understand what that process will look like so your teams can prepare accordingly. Will you be communicating with a single decision-maker or a team of decision-makers? Is your first point of contact an end-user, an influencer or a buyer? The answers to these questions will help you tailor your messaging around the goals and challenges of your prospect.
Once your marketing and sales team have a shared understanding of the new market they’re going after, the next step is to prepare your sales reps with sales enablement content, including battle cards, solution overviews, and case studies.
“Any of these different enablement pieces are like cheat codes to get your sales team to understand the language and how to effectively gain buy-in from the prospect they’re speaking with,” Dylan says.
You might already have most of the content you need from your existing marketing efforts. If that’s the case, just revise the content into assets that address your new target market. For example, you might need to update the value propositions on your battlecards in order to better speak to the new buyer personas or pull messaging from a product webpage into a one-sheet.
You also need to review case studies and testimonials from companies that are reflective of your new target market as soon as possible.
“As you move upstream, especially into corporate and enterprise spaces, buyers may experience risk-aversion. They need to see real-time use case examples of how people succeeded that looked like them,” Dylan says. “Your speed to garner those stories or examples can have a considerable impact on how quickly you start driving revenue and scaling through that space.”
While that same degree of risk aversion might not apply to all markets, it will be easier to gain trust and buy-in if you can prove that your solution has worked for companies of the same size and industry as the prospect you’re selling to.
Choose a Strategy for Market Entry
There is no one-size-fits-all strategy for expanding into a new market. If you have contacts in that space, you can enter through referral business. You could take a networking approach and try to build relationships at relevant industry events or through social media. You could even try an outbound approach — though we don’t recommend that.
For markets that can truly gain value from your offering where you don’t have personal connections, account-based marketing (ABM) and product-led growth (PLG) can both be effective strategies to help you get your foot in the door.
ABM starts by identifying good-fit prospects and then generates interest from them using targeted marketing and sales outreach. Because of the personalization of this approach, it will typically be more successful than a purely sales-led one.
PLG enters markets through the end-user, by getting them so excited about your solution that they spread it throughout their organization.
“A product-led motion can be effective to give people a taste of your solution for free and, if you create a tiered pricing structure that’s centered around their success, you could experience momentum turning free users into paid users,” Dylan says.
PLG can also work on non-freemium products if you offer free trials or personalized demos.
The success of both of those approaches is due to their focus on providing value to the prospect, so if you choose a different market entry approach, try to still keep your marketing and sales efforts centered around how your solution will address the unique pain points of your prospect.
“Technology is really advancing how quickly we can enter new markets and expand through them, but sometimes, it still does take time,” Dylan says. “It could take a couple years to become a player who can start disrupting or gaining market share in your desired space.”
Having an established market expansion strategy in place prior to attempting to enter a new market will help you ensure you’re not wasting resources.
To gain buy-in from new prospects, you need messaging that resonates with them, and if you wait until you need sales enablement materials to create them, it’s already too late. Being unprepared can increase the time it takes to effectively expand into a new market — delaying your company’s growth.
Quinn is a writer and copyeditor whose work ranges from journalism to travel writing to inbound marketing content. She’s super passionate about grammar and punctuation and loves learning new things that she can share with readers. Her favorite punctuation mark is the em dash.