The three questions of marketing new business

1.) Does a market exist?

Basically, are there customers willing to pay for your product or service.  Most products and services are an extension of something that already exists, so you know that a market exists.  This question becomes even more important as if you are offering a disruptive product or service.

2.) How big is a market?

Basically, are there enough people who are willing to pay for your product to sustain your business.  You must also consider at this point how many competitors are there and how entrenched are they.  For example, if there is a million dollar business but there are already a dozen competitors, there will not be a lot of unmet demand.  Then your business will have to out perform enough of the established businesses to squeeze into the market.

3.) Is the market concentrated?

Basically, how spread out is the market.  It you are providing a service where you have to be present but your customers are spread across a 250 mile strip, it may not be a workable scenario.  With the power of the internet, it is significantly easier to service a  market that isn’t concentrated.  You may have to structure your business differently depending on how and where your customers are located.

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How does this make me feel?

For many years I thought one of the best questions was, “what does this mean?” It is a really good question. I still use it but someone I work with has turned me on to an even better question, “how does this make me feel?” While the first question leads to a better understanding, how does this make me feel also leads to a more holistic understanding. This question is especially powerful when dealing with human interactions; field sales or consumer reactions.

A New Year’s resolution that matters

While typical New Year’s resolutions (losing weight, spending more time on the family, working out) may be great personal achievements there is one resolution that matters even more:  reformulating your organization’s strategy.  Continuing to work a wrong or even a bit outdated strategy in 2014 will take more out of you and out of your organization than carrying around that extra 10 pounds.

Working an incorrect strategy saps resources out of you, your personnel and your company’s financial resources.  A strategy, correctly formulated and applied, guides every decision maker from customer service to the president in making decisions that are consistent, effective and future oriented.  On the other hand a strategy, incorrectly formulated and/or applied, guides every decision maker to make inconsistent decisions that do not guide the organization efficiently or effectively toward a desirable future.

Generally speaking, an organization’s strategy should be validated every year and have a significant review every three years.  Organizations that are faltering, experiencing significant growth or in a cutting-edge industry, e.g. 3D printers, should validate and review their strategy on a significantly quicker pace.  For truly disruptive organizations, Clayton M. Christensen and Michael E. Raynor suggest processes for fostering an “emergent strategy” in The Innovator’s Solution to have a living continually updated strategy.

For your New Year’s resolution, consider asking yourself these questions:

  1. How recently has your organization’s strategy been validated or reviewed?
  2. Does your organization have a clear and believable strategy that has been working*?
  3. Could every decision maker correctly describe your organization’s strategy?
  4. Is your organization’s strategy specific to your organization (vs. a cookie cutter approach that could fit any organization in your industry)?
  5. Do you have regular tracking of metrics that are tied to your strategy?

If your answer to question 1 is longer than a year or if you answered “no” to any question 2 through 5, it is time to review if your organization’s strategy is up to date and appropriate for the circumstances 2014 is likely to bring your industry.

 * Definition of “working”: provide a lasting and positive change to sales trend