Your business is doing well – but the questions still remain: Could you sell more? Is there a way to increase market penetration? Is there a possibility of further product diversification?
Companies looking to grow their sales can do so in a number of ways – for example, by increasing their advertising budget, expanding their sales team, and investing heavily in product development.
However, one of the often overlooked ways to boost your gross sales is a targeted, well-researched, and expertly implemented market development strategy.
In this article, we explain what market development is and how you can use it to increase sales and grow your business.
What is market development?
The market trend is the expansion of your total addressable market (TAM) and how much market share you are expected to claim.
A market development strategy can focus on how a company can increase sales by taking one or both of the following initiatives:
- Development of a new product line to increase sales by selling to new customers or upselling to existing customers.
- Create a plan to sell existing products / services to new populations through initiatives such as adding locations or expanding the delivery radius.
In the first scenario, the TAM increases because by offering a new product or service you are effectively increasing the maximum revenue that you can get from your existing customer base.
Imagine a jeans company that starts designing shirts and jackets – this company may have piqued their market’s interest in jeans, but the same customers may be willing to purchase clothing other than jeans from this company.
In the second example, TAM increases because you can simply add more employees to your target market and serve new customers without investing in a new line of products. Think of a business expansion by hiring salespeople serving a new region or a restaurant opening a second location on the other side of town.
How to create a market development strategy
Deciding when and how to develop your existing market should be a methodical process.
Just because lightning struck your business once doesn’t mean that your new expansion plan is a guaranteed success.
For that reason, follow these steps and use these resources to determine whether you should develop your market, how it should be developed, and whether or not the initiative is successful.
Step 1: Research your development opportunities
It’s always tempting to look for the next big thing – whether it be adding more focus to your consulting business or adding more elements to your restaurant menu.
However, before you invest the time, money, or resources developing your marketplace, be sure to follow these steps to see if it’s worth expanding.
Review your buyer personas
Recommended tool: HubSpot Buyer Persona Templates
Download these templates
As you expand your market, you face the potential need for new or revamped buyer personalities, which are semi-fictional representations of your ideal customer based on market research and real world data about your existing customers.
Consider the motivations, demographics, and backgrounds of your new target market to help you decide whether or not the development initiative makes sense.
Research your market
Recommended tool: HubSpot Market Research Kit
Download this kit
Understanding your hypothetical positioning in a market is key before attempting to enter it. To do this, conduct market research exercises such as Porter’s Five Forces Analysis or SWOT Analysis to identify your strengths, weaknesses, purchasing power, replacement threat, or other characteristics compared to competitors in this new market.
Additionally, you should calculate market penetration before proceeding with any expansion plans.
Interview your customers
Recommended tool: templates for customer satisfaction surveys
Download these templates
If you are looking to expand your current line of products to generate more sales with existing customers, make sure that your intended expansion is received very positively. Asking why this development makes sense for your company is a good first step.
Talking to and interviewing your customers to determine if your planned expansion will be beneficial for their lives (and most importantly, whether or not they would buy it from you) is necessary evidence before expanding your business offering .
Step 2: set your growth goals
Successful market development will be associated with additional sales, profits, employees, customers, products, users, locations or a combination of these criteria.
With so much at stake, develop goals for what facets of your business you want to grow for in addition to your growth target for each criteria.
For example, if you add another location, you can set the following growth goals:
- Increase your customers by 90%.
- Increase sales by 100%
- Double the annual profit after amortizing the original investment.
- Increase the number of employees by 20 people.
At this stage, you should also consider the requirements needed to meet your growth goals, such as: B. Initial funding, tools, and software to help you get the initiative up and running.
After all, ROI is the most important metric to measure before attempting to expand or develop your market. At this step in the process, compare the up-front costs for the intended development of your market with the projected sales figures of a successful expansion.
If the ROI isn’t encouraging enough to move forward, you may need to go back to the drawing board and set a new growth strategy and set of goals.
Recommended tool: growth strategy and planning template
Download the template
Using the template above, outline your growth goals and strategies to lay the foundation for your market development initiative. You can use this template to plan the steps required to achieve your goals and determine whether or not they are realistic for this project.
Step 3: create your marketing plan
An enlarged market means an increased need for effective marketing.
To generate demand, or to capture the existing demand in your market, make sure that your marketing plan is up to date and reflects the initiatives needed to grow your market share to the level you want.
Consider all of the following initiatives and how they will help generate more sales in your newly developed market:
- Email Marketing: Will you be communicating with existing prospects via email to make them aware of your initiative? Do you have a list of saved contacts who have expressed interest in what you are selling, were unable to make the purchase, and may now be able to buy from you?
- Social media: Do you have organic and paid initiatives to generate buzz and raise awareness about social media?
- Content & SEO: Have you planned website and blog content to get website visitors interested and learn more about your sales?
- Local Marketing: If you develop your market on a regional level, do you work with local publications, PR agencies or advertising platforms in order to reach potential customers in the area?
Recommended tool: HubSpot’s marketing plan template
Download this template
Document your marketing plan supporting your market development using the template above and make adjustments as necessary to ensure you are reaching your market in an accurate, engaging and consistent manner.
Step 4: Go-To-Market
The time has come – your research and planning is complete and you can formally implement your development strategy, whether you’re opening the doors to your new location or listing your new product for sale on your website.
Before you start earning any revenue, however, there are a few final steps you need to take – specifically, aligning your team on the best way to get that go-to-market.
The go-to-market is successfully completed by managing three key internal tasks, all of which can be done with this product go-to-market kit:
The campaign plan should be the single point of contact for everyone involved in the success of this project. It should provide a general purpose for the market development project, in addition to the tactical and strategic elements that team members must adhere to in order for the project to go smoothly.
The sales plan should provide the sales team with more specific insights – particularly in terms of overall projections, team or individual goals, and strategies for how the organization intends to achieve those goals
Team email updates
For the entire company – especially those who need to be informed but may not have set tasks to complete – team email updates are an essential part of communication during market development. These messages should include a status check for the start timeline and pending tasks, as well as any notifications the company should be aware of in its day-to-day work.
Recommended tool: HubSpot go-to-market kit
Download this kit
Use the HubSpot go-to-market planning kit to centralize your internal planning and communication efforts during your market development process.
Step 5: analyze your results
Once you have taken the necessary steps to develop your market, the work has only just begun. Once launched, you need to make sure the customers are happy, the products and services are high quality, the employees are retained, and most importantly, the goals are met.
Collect sales data as soon as possible so you can analyze whether or not you are meeting your forecasts. If not, you may need to set a plan to either adjust your goals to be more realistic and / or adjust your strategy to ensure your goals are met.
Once data is available, make sure to present your results accurately and clearly so that stakeholders can fully understand what the results are, how you achieved them, and what the next steps in your market development strategy are.
Recommended tool: Marketing report templates
Download these templates
These templates are available in PowerPoint, Excel and Google Drive and help the project driver communicate the results of your market development strategy to your team.
Development of your market
Get ready to grow your business. Follow these steps and use these free planning resources to turn your market development idea into a reality. As the next step, learn from an example and read how five leading companies developed and implemented their growth strategies.