When and How to Identify Your Next Market or Product
Once you’ve reached a certain point of success in your business, you’ll more or less max out the amount of profit you can make from your current product line. In order to continue to grow, you need to create new products or explore new markets.
What’s the process for doing this?
==> Start by Extending Your Current Product Line
If you’re already successful in marketing to one market, the first place to look to expand your profits is through adding more products to your current product line.
Research has shown that it’s between two and seven times easier to sell an existing customer than to acquire a new customer. Take the low hanging fruit first, before going for the more difficult prizes.
So where can you look for new product ideas in your current market?
Begin by asking what other problems your customers have that your current product doesn’t solve. For example, say you sell a workout DVD set. Your customers are building more muscles, but they don’t have their nutritional health in line yet.
So you might decide to come out with a product that addresses the dietary side of things.
Alternatively, you can just ask your customers. Create a survey online and ask what kind of products they’d like you to offer.
==> Exploring Brand New Markets
Sometimes you’ll need to explore brand new markets. This is important if your current market is dying, or if you’ve capped out the amount of profits you can make in your current market.
How do you decide what markets to explore?
Start by taking a look at your competitors. Where do they tend to expand into? If others are making it work, chances are you can too.
What other kinds of businesses or products have natural synergy with your company? For example, if you sell energy efficient lightbulbs, you might want to also look into selling solar lights.
==> Test Small
If you’re exploring a brand new market, don’t just jump in with both feet and invest a large amount of money.
Instead, test small. Start with an inexpensive to manufacture product, or start with a “dry run.” A dry run is where you buy advertising for a product you don’t quite have yet and take pre-orders, or just count how many people clicked the “order” button.
Test small. Only invest heavily in a market if it’s proven its merits.
==> Make This a Business Process
You should regularly be asking yourself: What else can we offer? The more products you offer, the more opportunity you give your customers to spend money with you.
Look for product ideas about every 6 months. It should be part of your bi-annual systems, just as financial reviews or personnel reviews might be.