Chances are that at the growth stage you have already felt a certain pull from other market segments.
- Have prospects from other segments signed up despite your messaging being focused on a different market? Do some of these user groups stand out?
- Have any of those prospects found real value in your product? Are there segments that received equal—or even greater—value from your product than your target customers?
- Do some of those groups perform better in terms of churn, engagement, or even NPS?
- Have users from other segments contacted your team asking for different features? Did they have a budget to pay for custom development?
- Has your team built a degree of authority or visibility that could be leveraged to ease your entry into a new market?
- Has your team gained knowledge or insights that could be used to help your expansion into a new market?
- Have customers recommended your product to prospects outside of your target market? Did those users find value with your product?
These are some of the most telling signs that the market is trying to expand the scope of your product. They are examples of new groups of early adopters thinking that your product could help address their needs.
Maybe up until now you’ve been laser-focused on winning your core market—now it’s time to consider market expansion, and have a look at the groups that are trying to get value from your product.
You want to identify:
- the segments trying to get value from your product; and
- what, if anything, is preventing them from getting that value.
How to Find Opportunities for Market Expansion
Focusing on users outside of your target market, revisit:
- Positioning feedback (“I’m probably not your target customer, but…”, “I’m sure I’m wrong, but I thought…”)
- The list of companies visiting your website if you’re in B2B
- Unsolicited feedback and emails
- Feature requests
- Sales calls
- The profiles of users signing up
- The profiles of the users who cancelled or moved on that your team dismissed by saying “They weren’t in our target market”
- Unusual product uses
When you look at all these interactions, are there segments that stand out?
Although you are trying to avoid edge cases and outliers, what you’re really looking for are signals. Even small segments can be interesting. Segments can generally be grown.
For each of the groups you have identified, you want to understand the value sought, the gaps they see in your product, and anything else they feel prevents them from using your product. If you don’t have enough data, then you need to dig deeper by conducting interviews.
Although the specific users that triggered these discussions have most likely moved on, there’s still a lot of value in understanding which solutions they were considering, and what solution they chose.
Did they find a solution? How well does it meet their needs?
If your product now has everything that one of these segments needs to be successful, congratulations. You found a market expansion opportunity. You might be able to grow that segment simply by adapting your messaging.
But even if you do find a similar opportunity, it’s best to go through this entire exercise.
This post in an excerpt from Solving Product. If you enjoyed the content, you'll love the new book. You can download the first 3 chapters here →.