Keys to Market Access, Part 4: Understand True Market Potential
A market access strategy provides a framework for distributors to align their investments with real opportunities for growth. This blog is the fourth of five looking at the five keys to unlocking profitable growth.
The fourth key to a successful market access strategy is to understand true market potential.
Distributors tend to hold certain beliefs about their markets – but those are often based on gut feel rather than facts. Companies need to use a combination of external market data and customer insight to truly understand the dynamics of the markets they serve. We usually find that distributors significantly overestimate their current share of their customers’ total spend and underestimate the available potential in their markets.
It’s critical to understand that the value is not only in the data itself; it’s also in the conversations it provokes. Think of market data as the sand in the oyster that creates the pearl. Data is most powerful when it conflicts with existing assumptions.
Services such as MDM Analytics (previously Industrial Market Information) can provide data on growth potential by market or customer type, a benchmark from which to start a conversation. Are you reaching all the customers in your markets? What’s your share of wallet with existing customers? What’s your market share? Are there customer segments you aren’t reaching – but should be targeting?
But don’t just look at where the money is spent and what it’s spent on. Use external data to prime the pump for discussion and the gathering of more qualitative information.
Combine the data with customer insight, which can help you understand why your markets look the way they do. Customer insight can also provide a window into which customers are candidates for lower-cost sales channels, which are OK in the current channel but may need some changes, and which are candidates for more intensive, strategically driven sales and marketing initiatives. It will also help you understand the cost to grow those customers.
The next blog in this series will look at why investing in new capabilities to reflect the changing markets can help you capitalize on growth opportunities.