You chose a beachhead market. Aligned internal stakeholders. Repositioned the business and external messaging. Wrote amazing case studies. Tightened your product-market fit. Switched to a proactive growth model. And business is booming.
It takes discipline to expand gradually.
Now, there’s 2 things that’ll need to happen:
- When the timing’s right, you’ll transition your messaging to cater to late majority customers.
- When your business is solid enough, you’ll expand into adjacent market segments.
Looking for New Market Segments
It’s a good time to revisit the customers you contacted before, but that didn’t purchase.
Has the tide changed?
The late majority only buys when a product has become standard. In other words, they follow the early majority.
That’s why they’re a great gauge of whether or not you’re dominating your beachhead market.
Their primary objective is to avoid risk and “don’t screw anything up.” It’s your “no one ever got fired for buying IBM” type of customers.
They want to see proof before deciding to use a product. They’ll put off using it until it’s really easy to adopt.
They might know of your company or have become aware of it through their early majority contacts, but they’re quite different from them.
At this point, you’ll definitely know of a few prospects that seemed like perfect fits as customers, but were just not ready.
Revisit those organizations:
Have they become familiar with your product? Do they know of other organizations using your technology? Has the problem evolved? Is the timing better? Can you provide sufficient proof to de-risk implementation?
You’re looking for your tipping point, when – based on word of mouth and market share – your niche market segment dominance becomes inevitable.
When’s the Right Time to Enter a New Market Segment
More specifically, you want to consider expanding into new market segments when:
- You’ve captured the largest market share within your beachhead – Are you at 30, 40 or 50% market share? Don’t stop until you dominate the market.
- All prospects have at least heard of your product – Do you have good brand awareness? Can you do a market survey to find out?
- You’ve already taken away the best opportunities – the most profitable, the fastest growing, the best customers. You want to make this an un-assailable position. Let competitors fight for scraps.
- You have resources that can be freed up without reducing your grip on the market – You can service the late majority while expanding into new market segments.
- You have the cashflow to build other salesforce, support teams and marketing pipelines.
When the momentum from capturing market share in your beachhead is felt, you can leverage it to expand into new market segments.
Expand gradually, and takeover more market opportunities.
More on New Market Segment Entry
- How to Evaluate and Find the Best Customer Segment for your Startup
- Here’s How to Truly Own Your Beachhead Market in B2B
- How to Identify Follow-on Markets (With a Great Bowling Analogy)
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