Understanding your market

Four Simple Steps to Understanding Your Market

1. Understand your value

2. Survey the competitive landscape

3. Understand your target market

4. Plan your sales campaign

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1.

What problem does your product solve?

How does your product compare with the competition?

Who will buy it and why?

How will you reach them?

The answers to these questions determine whether your product can succeed and if it can, how best to generate sales.

1. Understand your value

Determine your unique selling proposition

• A unique selling proposition (USP) is the key thing your product or service delivers to customers that your competition does not.

• It’s the one thing you can point to as the reason why someone should buy your product instead of another.

• All successful products need a USP. Otherwise you have just a “me-too” product.

MarketWho buys your product?

NeedWhat will they use it for?

PainWhat does your solution offer that others

don’t/What problem does it solve?

SolutionHow does your solution solve the

problem and remove the pain?

2. Survey the competitive landscape

• “Positioning” - means “how is your product positioned compared with the competition?”

• The goal of positioning is to identify positions in the market that represent unmet need.

• There can be no positioning without something else to position against.

• We need to chart the competitive landscape that our product will compete in.

• To do this we use a Positioning Matrix – This helps to you visualize your products in the market place, relative to competitive products, customer needs.

Positioning Matrix

• A Positioning Matrix has two perpendicular axes and hence four quadrants.

o First you have to choose the factors to plot on each axis.

o The process of thinking about potential factors is useful in and of itself and helps you better understand all the dimensions at play in the market.

o These factors represent trade-offs relevant to the purchase of the products in the market.

o The far ends of each axis represent opposite extremes along a factor

• Choose each axis so that your product exists on its own in one quadrant as this defines your unique position in the market.

• The axes also have to be relevant to customers needs/pains.

• The pain that your product removes starts to answer the questions about how you compare with the competition. The “pain” is usually a drawback of the competition that your product eliminates.

Example:

For example, in the auto market one could map the image of cars on two axes as follows:

Product Positioning with a Matrix Diagram

3. Understand your target market

• Figuring out your ideal target market is a process of dividing, or segmenting, the total universe of buyers into segments that share common qualities.

• There’s no one framework for segmenting, and it can depend on whether you have a service or product, whether it’s for consumer or business, and so on.

• A Market Focus Diagram is an effective tool for helping you understand where the sweet spot in your target market is and for communicating it to others.

High Net

Worth

Creating a market focus diagram

• A market focus diagram is a type of Venn diagram• Example:

o You sell an expensive high-tech golf ball with built-in GPS golf bag-based locator (Never lose another ball in the rough!).

o Whilst your target is among the golfer population.

o But this is a very expensive product, so only high-net worth people can afford it.

• Visually represent this example:

Golfers

4. Plan your sales campaign

• A sales process is the series of steps you take to achieve a sale.

• This usually starts off with some kind of outreach to your market to identify prospects, qualify them into real leads and then move these leads into completed sales.

• At each stage you lose some of the population: Not all prospects become leads; not all leads become sales.

• This is why a sales process is often called a sales funnel: It narrows as you reach the completed sale.

4 steps to creating a sales funnel

1. Step 1: Define the first step of the sales process o usually some form of outreach to the target market: Direct mail, advertising, or cold-calling, etc.

2. Next step – EG. requests more information

3. Repeat this for each step in the process

4. Measure conversion % -As customers pass through this process you can start to measure the success of each step: What percentage of emails sent result in a request for more information?

o How many inquiries lead to a quote?

o How many quotes lead to a sale?

o How much revenue is generated from each mailing? .

Follow up System

Lead Generation

System

NOTES