It’s tempting to take the “small fish / big pond” approach to look at your marketing opportunity. In other words, “This is a billion-dollar market. All we need is 1% and we’re going to hit a home run.” Sounds great, but in application and delivery, it doesn’t work. You’re much better off taking a “big fish / small pond” approach. That is, define your target market as narrowly and specifically as you can. I’m going to give you three filters that you can use to take what you think is a sharp target market to be even more refined – to your bullseye.
The first is market share. In the space you’re in, are you the longtime market leader, are you brand-new to the space, or somewhere in-between? Depending on that, that will determine how big a piece of that target market you realistically can take. If you are the market leader, people already know you and you have a chance to reach more people in that market space. If you are new, you want to assume much less, maybe even one-third of that target market as people that you can reach.
The second filter is competition. In pretty much every market there is going to be, there’s a competitive landscape. And you can say, “Oh, we’re the only ones that do this.” The fact is, there’s an alternative: what they’re doing today, instead of what you’re doing, even if it’s not a product. It may be a manual practice versus your automatic practice. It may be a spreadsheet versus your SaaS platform. Whatever it is, there are other ways to skin the cat and you have to account for that. So I like to discount or filter my target market by another two-thirds. So multiply it by 33% to get the actual group of people within the market that are willing to consider a different way to do it than the way they’re doing it today.
And finally, market growth. If your target market is booming, if it’s growing fast, you’re going to have much more receptivity to your approach than in a market where it’s stagnant or even declining. So, depending on the growth in the market, you want to – the lower the growth, the narrower, the smaller subset of that market you want to believe that you can reach.
So applying these filters to your target market give you a bullseye, which could literally be if you do this right, a list of companies or people in companies that you can go target. That actionable list quantifies your marketing approach and adds accountability because you can actually check off the companies that you are able to tap.