Grow Faster in New Target Markets Break out the map. It's time for you to go a-huntin' for new markets.
Q: My business has experienced considerable growth over the years. This has been accomplished as a direct result of aggressive marketing in my target market. Recently, however, that rate of growth has slowed. How can I increase my business's rate of growth?
A: A target market represents a specifically identifiable group of potential customers. These groups may have characteristics similar to those of your existing customers, or they may represent new markets. Each group has its own unique profile, consisting of behavioral characteristics such as shopping patterns, frequency of purchase, brand preference, values, goals and wants; their geography, including neighborhood subdivisions, ZIP codes or states; and demographics, such as age, sex, income, marital status, family size, occupation and education. Each of these elements helps determine what and when they buy, and from whom.
Your business may have reached a degree of saturation within its existing target market(s). This could explain a decrease in the rate of growth. In order to grow faster, your business may be well-advised to look to new target markets for its growth. The following are examples of marketing strategies you can implement to create sales for your business within new markets:
- Expanding your product line or service offerings. You can identify and access new markets that currently exist within your business's target market(s) by adding new products and/or services. By creating these new offerings, your business can reach members of target markets that were otherwise inaccessible to your business using its existing product/service mix.
- Using strategic marketing alliances. These alliances allow your business to sell its products and services through other existing businesses. In this manner, your business will have accessed the target markets that these alliance partners currently serve, without having to do any additional marketing.
- Opening a new location. Once your business is successfully operating in and serving an identifiable target market area, it may be time to consider expanding by duplicating this presence in one or more new locations. The key to creating and successfully operating a new location is to be certain that a strong demand already exists within this new target market for your business's products and services. It takes considerable time and money to create demand where it doesn't currently exist. Additionally, you must ensure that these potential customers within this new location are in fact new potential customers, not existing customers of your business.
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How to Become a Rainmaker: The Rules for Getting and Keeping Customers and Clients by Jeffrey J. Fox
Why of Consumption: Contemporary Perspectives on Consumer Motives, Goals and Desires by S. Ratneshwar, David Glen Mick and Cynthia Huffman, eds.
- Marketing on the Internet: It your business's products and services can be delivered to potential customers throughout the country, and the world, you can gain access to the largest target market anywhere: the collection of potential customers that you can reach via the Internet. Although it's difficult to rely on potential Internet-driven customers to "find" your business's Web site, using search engines for example, you can promote sales by aligning your business with existing successful Internet businesses. You can arrange for your business's "active" Internet address to be displayed on a "click through" basis by these other Internet businesses. In this manner, your business can receive customer leads who click through to your business.
- Franchising or licensing your business's concept: Once your business has matured to the point where it is both easily duplicable and does not rely on your individual presence in order to operate successfully, you may want to consider creating franchise opportunities that you can sell to individuals and/or investor groups that wish to own and operate a business similar to yours. A franchise of your business is, in effect, a copy of your business that can be sold as a stand-alone entity. You must be certain that your business can be operated in locations apart from the target markets it has served; otherwise it will not be salable. Alternatively, you can license your business, whereby the right to operate a business like yours is sold to other entrepreneurs, within a set of certain guidelines and operating procedures.
Wherever you find new target markets, and however you attempt to access the new potential customers that are contained within, you may find these markets a tremendous opportunity to grow your business at rates that are much higher than those it is currently experiencing.
David Meier is founder and COO of Small Business 411, which provides small-business owners with ongoing business coaching and the knowledge and support required to enable them to become truly successful entrepreneurs. Visit the Small Business 411 site at http://www.smallbusiness411.com.
The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.