Guest author Scott Gerber is the founder of the Young Entrepreneur Council.
Getting customers in the door is a challenge that all entrepreneurs face. But even if you’ve been successful with one business model to date, targeting a new customer base—whether through expansion or a new venture—can feel like starting all over again.
To save you time and money, I asked several YEC entrepreneurs what one thing they’d prioritize above everything else when expanding an existing model to target a new customer base. Their best answers are below.
When expanding your existing model, it is imperative that you intensely and actively listen to your new customer base. Things that you might have assumed as a constant when moving into the field may not be.
It is essential in the first few days and months you are asking questions in as many ways and forms that you can to gather all potential feedback. Analyzing this feedback and adjusting your position quickly will help minimize glitches and potholes that you may have fallen into had you not been a vigilant listener.
Overlooking your end user, whether B2B or B2C, is the mistake that will come back to hurt you in hours spent, dollars wasted, or misdirected effort down the road.
Before I step into another customer base, I do my research. I first look to my own partnerships and affiliations and try to determine if I know anyone who has experience in that direct customer base, and then I either call, email or ask them to lunch. I want to get every detail of their experience from the good and the bad.
That becomes my biggest learning tool to plan my strategy. From there, if I have partnerships that bridge the gap between my old and new customer base, I try to make that publicly apparent.
I believe customers enjoy this kind of synchronicity, and it’s almost as if their favorite brands are humanized to them and are “friends” for lack of a better word. If they already believe in your peer’s product, they’ll trust their word in recommending yours.
Review Site Research
Make sure you do appropriate market research. Check Amazon or similar sites that list your product category to see what people are saying about products that are already in the industry, the problems/issues they have with those products, and what they like.
Also, check to see whether people are actually purchasing the product. Amazon and/or Yelp reviews are a great place to do this kind of market research.
You should never overlook your competitors and the total addressable market size. It’s critical to understand how strong your competitors are—what they’re doing well, what they’re not doing well, how you can differentiate yourself and how big the market is. You should never assume that you’re going to be dramatically bigger than the current market leader.
Your Current Clients
The current users/customers of your product have already instilled their trust in your brand. Make sure to not alienate them during this change because they are the customers you have already worked to create. While you are expanding, be sure to not isolate your original business model.
When it comes to expanding your existing model to a new customer base, be open to the idea that you may need to rework your branding to best message your new audience. It can be a challenge as an organization to change your aesthetic identity or tone, but sometimes it is an important change to make in order to succeed in a new market.
As you go through the process of evaluating whether you need to adjust your existing brand, make sure to conduct interviews with your new target market customers so that you have a holistic understanding of their needs and preferences. This will help you make critical branding decisions as you expand successfully.
Redefining The Need
You have to spend more time and effort reaching a new customer base than you do reaching your current customer base. People often think that it’s a simple matter of changing their marketing to target a new group, but they often forget that the effort needed to reach their initial market was huge.
Think of the first marketing you did to get your business launched. It isn’t going to take as much effort as that because you probably have some brand recognition already. However, you’re still going to have to define the need for your product all over again.
Perspective From Other Fields
The typical approach to market research is simply looking at customer trends in your field and asking your existing customers about what they’d like to see next. Instead of pigeonholing yourself, try to gain perspective by reading about or getting exposed to other companies outside your field. Learn from their experiences in targeting new customer bases and innovate solutions from there.
Thorough Market Analysis
You need to determine whether there is truly a need by conducting a thorough market study and gathering data. You should not make this determination based on a gut feeling.
A market study can uncover specific challenges you might face, so you can anticipate those and shape your product and campaigns appropriately. A market study should identify competitors and explore why they are not fully meeting the needs of customers. You can use this information to come up with a plan to distinguish your business from the competition.
Make sure you are purposeful with your messaging about how this new product or vertical will weave in with your existing products. Whether you want it to be totally separate or integrated somehow with your existing product or service, there needs to be purpose around that messaging.
Expanding with a new product provides you with an opportunity to excite existing customers about your growth trajectory and ability to innovate. However, if not positioned properly, your approach could be perceived as scattered, or as if your other products aren’t working.
Changes In Sales And Service
Don’t overlook the challenges associated with pivoting a sales force and customer service team. You’ve hired specific people and trained them to sell to and work with a certain customer base. If you’re changing the model, you should consider that, in addition to updating your sales pitch, product differentiators and pricing to resonate with a new segment, you also may need to make adjustments to your sales and service recruiting strategies and training processes.