Digital disruption, volatile markets and rising customer expectations are just some of the many evolving realities of industry 4.0. Attaining high organic growth, and sustaining it is becoming a herculean challenge for organizations. Business leaders understand that identifying new opportunities and adapting to growing challenges is the only way companies can survive the unpredictability that reigns in markets. Meeting existing customer demands is not enough, and organizations are innovating as they aim to enter or create new markets. Despite this, a recent McKinsey survey revealed that just 27% of organizations have targeted strategies designed for expanding into new markets beyond their core business.
To explore new business opportunities, high-performing firms lead the way by going beyond their current target groups, collecting insights and actionable data from surveys, defining new growth metrics and extending their brand offering. Creating new business models and tapping into new sales channels are helping companies forge ahead on their growth curve. Today’s innovative technologies enable the early adopters and risk-taking firms to source data in creative ways and analyze it effectively to derive valuable insights. According to Gartner’s Predict 2019 research report, the top success factor for CMOs today is the ability to effectively leverage customer data and analytics. Artificial intelligence and machine learning led automation are creating new job opportunities and self-learning models which are rewriting the job descriptions of employees across the organization; marketing and sales personnel included. One of the biggest applications of big data analytics in B2B sales is in effectively planning micro-marketing strategies.
Here’s how modern firms are leveraging data insights to design new micro-market strategies to impact their bottom line positively.
1. investing in new avenues of growth
Industry experts suggest that companies that focus on efficiencies and allocate their resources towards potential growth opportunities tend to gain a competitive edge. According to a McKinsey research, firms that reallocate at least 49% of the previous year’s budget to promising new avenues are able to secure a compounded annual growth rate of 10% in total return to shareholders. Risk- and growth-oriented firms follow a diversified portfolio of investment to generate maximum profits. The right investment mix allows progressive organizations to take enough risk for both short- and long-term benefits. They identify new growth metrics such as current market share, revenue per user, competitive footprint, etc., and follow them to create new business opportunities. Uber expanded its reach to over 500 cities across the globe by diving into location specific transport needs and problems to create new business associations that led to profit opportunities.
2. creating new product segments to cater to niche audiences
Futuristic companies stay open to ideas that can potentially create breakthroughs in the market. They go beyond satisfying the current needs of the customers and think of catering to a new set of customers or even create demand for new products/services. Leading FMCG firm, P&G set a great example of this product innovation strategy by co-creating a new hair care product with African American (AA) scientists, targeted specifically at AA women in the United States. The product was created with an idea of breaking the stereotype around long, shiny and smooth hair as the benchmark of beauty and introducing something for natural and transitioning hair. The company planned and allocated a separate budget for this micro-marketing move that helped in not only increasing its bottom line by expanding its market share, but also strengthening its brand value.
3. optimizing marketing commercials through analytics
Companies that envision being market leaders have a consistent focus on their marketing, sales, and promotional strategies. On the one hand, they emphasize on increasing revenue through cross-selling and upselling, while on the other, they also stress upon enhancing customer experience and customer relationships. Thanks to the rise of big data and analytics, it has become easier to create more target-specific and cost-effective marketing strategies such as direct mails, surveys, etc., for enhanced and personalized customer connects. An industry leader in financial services, The First Tennessee Bank adopted a new campaign management tool to classify customers based on their revenue generation. The bank used the tool to further segregate business owners as per their specific needs to make customized offers to provide a more targeted, personal solution.
4. aligning sales with opportunity
With the advent of big data and analytics, marketing and sales professionals no longer need to rely on market sources, gut instincts and the “pulse” of the market to make their sales decisions. Organizations can now use all the market intelligence derived through data analysis to align their resources effectively to cater to the relevant demand and growth pockets for greater value maximization per employee. Organizations are investing in training their sales leads to leverage data insights in managing demand/field staff deployment/ BTL promotions and more. For instance, Whole Foods use a number of location-specific social media handles and accounts to promote micro-market relevant tailored content and to interact with pockets of health-conscious customers.
Continuing the momentum of growth is no more a question and is rather the only way to survive in an uber-competitive market. Companies that do not expand their vision or innovate are more likely to fall off the wagon in today’s ambiguous industry scenario. However, careful reflection must be paid to market research, and the competitive landscape and customer preferences must be considered while tapping into new markets. Failure to do so might backfire with poor and/or unsuccessful expansion plans.
The C-suite in the current industrial environment must be ready to ask questions on where and how to grow consistently and must also be willing to look for answers in hitherto untapped areas. One of the prominent answers lies in creating micro-markets where new sales hotspots lie.