Expanding into new markets can be an exciting and risky decision. On the one hand, it’s an opportunity to increase revenue and expand your customer base. But, on the other hand, it’s also a huge investment of time and money that doesn’t always pay off.
So, if you’ve decided to expand into new markets, you’ll want to approach this decision with caution. And that means you need a strategy that allows you to confidently decide which markets to expand into and which businesses within that market are most likely to be a good fit.
How do you form that kind of strategy? How do you successfully identify new market segments that your business has the highest chance of converting?
The key ingredient is exegraphic data.
If you’re unfamiliar with that term, you won’t be by the time you finish reading this guide. Because we’ll be showing the benefits of exegraphic data as we share a step-by-step market expansion strategy for B2B companies.
But, first, let’s start by discussing what benefits you can expect if you successfully execute your market expansion strategy!
Why should a business expand into new markets?
Of course, one of the main reasons to expand into new markets is to increase your revenue. If you can successfully reach new customers, you’ll see a significant boost in your bottom line.
But increased revenue is only one side of the story. Here are some of the other top benefits of expanding into new markets:
- Grow your customer base. If you’re selling products or services that are only targeting a specific group of people in your current market, expanding will give you access to new groups of potential customers.
- Satisfy growing customer needs. Your customers’ needs are constantly changing. Expanding into a new market can help you guide customer trends rather than simply trying to follow them.
- Keep up with competitors. If you don’t expand your business, you risk falling behind your competitors. If they are expanding into new markets and you’re not, they’ll have a leg up on you in terms of market share.
- Gain a competitive advantage. When you enter a new market before any competitors, you can establish yourself as the go-to brand in that market before anyone else has a chance.
- Diversification. If your business only serves one customer segment, you’re essentially putting all your eggs in one basket. But, if you expand, you’re diversifying your risk, giving your business a better chance at long-term success.
- New talent. When you expand into new markets, you’ll also have the opportunity to bring in new talent. These new employees can help refresh your company and give you a new perspective on your products and services.
Market expansion strategy: How to find and target the right prospects in new markets
To successfully expand your business into new markets, you can’t just go out and start selling your product or service. You need to understand the nuances of that particular market and know how you will compete with other businesses already there. You also need to know whether a particular market is actually worth your time.
To help guide you through the process, here’s a market expansion strategy framework you can use.
Step 1: Build your ICP using reliable data
First, you need to develop an ideal customer profile (ICP) for your target market. This will help you understand who your target customers are, what they’re looking for and how to best reach them.
But here’s the thing: most ICPs are shallow. Despite it being one of the most valuable parts of your market expansion strategy, most businesses develop their ICP using firmographic characteristics that don’t tell you much.
And that’s a huge mistake!
Why? Because firmographic data isn’t reliable for such a high-risk investment as entering a new market. It only shows you things like company location, size, industry and annual revenue. And while that information can be useful, it doesn’t tell you anything about the factors influencing a company’s buying decisions.
This is where exegraphic data can give you a huge advantage as you expand into new markets.
Use exegraphics to build a reliable ICP
Exegraphics give you data on how companies operate and behave. For example, with exegraphic data, you can find out which companies are early adopters of cloud technology or which companies are in the process of expanding their data engineering teams.
How do you find exegraphic data? By scraping company information that can only be found on company websites, social media platforms and similar sources. Of course, your company can manually collect this type of data. It’s just extremely tedious and time-consuming.
With Rev’s Sales Development Platform, you can use AI technology to speed that data collection process up. And because the AI is constantly searching for new information, Rev allows you to build a living model of your ICP—what we call an aiCP—that evolves as the behavior of your ideal customer changes over time.
Having an aiCP means your market expansion strategy also evolves based on real-time data. And this is a huge advantage in the initial stages of market expansion when many companies get scared and divest too quickly.
Step 2: Understand the TAM/SAM for each potential new market
Oftentimes, companies also rely on firmographics to find the total addressable market (TAM) and the serviceable available market (SAM) in a new market segment. Typically, these companies use some database and say, “find me all of the companies in this vertical, this size, with this annual revenue…” And, then, they make a leap and decide whichever companies fit those parameters is their TAM.
But it’s not.
Just because a company falls into those basic parameters doesn’t mean they’re ready or likely to buy from you. You don’t have enough information to make that assumption. So, what can you do instead?
By using Rev, you can add some scientific rigor to finding your TAM. With exegraphics, we help you find the companies in the new market that are already exhibiting behaviors similar to the best customers you already have.
Sometimes, you might find that the TAM/SAM for a new market is too small. And that’s great! Because you can use that information to pivot before investing too many resources.
If, however, you find that a new market looks like it’s worth pursuing, you’ll have the data to continue building your market expansion strategy with confidence.
Step 3: Study the competition
Next, you should take a close look at the competition. The goal here isn’t to copy their strategies or even go after the exact same prospects. The goal is to figure out what your competitors do well, what can be improved and what you can do differently to stand out to your target audience.
As you look at the competition, consider the following:
- What do your competitors offer?
- What’s their share of this market?
- What is the quality of their products or services?
- What are their strengths and weaknesses?
- How are they marketing their products or services?
- Are there any gaps in their marketing?
- Does their marketing strategy appeal to your ICP?
- What’s their pricing structure?
- Do you have the resources to compete?
Step 4: Rank each potential new market for your business
Next, you’ll use your research to prioritize which potential markets offer the most opportunity for your business. Here are some factors to consider when ranking potential new markets:
- Does the market have enough potential customers?
- Is the market growing or shrinking?
- What’s the level of competition in the market?
- What’s the overall risk level of entering the market?
- What are the estimated costs of entering the market?
You can use these criteria to create a scoring system and rank potential markets from most to least attractive.
Step 5: Define new market success criteria
Before you begin any outreach, you first need to establish what success looks like in your new market. This will help you set measurable goals and objectives, and track progress over time.
Some success criteria to consider include:
- Revenue goals. How much revenue do you want to generate from the new market?
- Market share. What percentage of the market do you want to capture?
- Customer acquisition costs. How much are you willing to spend to acquire each new customer?
Step 6: Create a target list of accounts in the top-ranked new market
Your list is your strategy. So, once you’ve identified your top new market, you want to start with a high-quality target account list. Remember: you don’t need to guess which accounts to target. Use exegraphic data to your advantage.
Rev’s AI technology uses that data to create a comprehensive list of all of the companies that show signs of being a good fit for your company’s product or service–even if those companies are outside of the industries you’d normally target.
That way, you don’t waste time and resources pursuing companies that aren’t likely to buy from you. It also means you’ll find new opportunities for deals with companies you might have otherwise never considered.
With Rev, you’d also get to see a Rev Score—i.e. how likely a company is to be a good fit—for each of the accounts on your list. This insight helps you prioritize accounts and increase your probability of early success as you begin testing the new market.
Step 7: Create a SWAT team to test initial messaging and engagement
By starting with a SWAT team, you can get a sense of whether there is genuine interest from potential customers in the new market. In other words, you can further minimize the risks associated with expanding into new markets!
Plus, you can start small. Your SWAT team only needs 2-3 employees who are company specialists in sales, marketing, product and customer success. The goals of this team will be to:
- Validate the new market before investing additional resources
- Develop early messaging and some marketing collateral
- Test various engagement strategies
- Collect data to fine-tune outreach efforts
- Create a set of processes that your marketing and sales teams can eventually follow (if you decide to pursue the new market)
Step 8: Measure early results and iterate
After a few months of testing, your SWAT team should have a pretty good idea of what’s working and what’s not. At this point, you can start to think about putting more resources toward your market expansion efforts.
But before you do, analyze the data and consider the following questions:
- Does the market show signs of promise?
- Are companies responding to your messaging?
- Are there any areas where you can improve your approach?
- What is the quality of leads coming out of the market?
- How many deals were you able to close?
- What types of deals did you close?
- Was the quality of deals in line with your expectations?
If you’re happy with the results of your market expansion efforts thus far, then it’s time to start thinking about the best fit market.
Step 9: Select the best new market fit
Now that you’ve done a bit of testing, it’s time to decide which new market is the best fit for your business. Which market showed the most promise in terms of potential customers and sales?
Start by evaluating your metrics with questions like:
- Which market had the highest number of new customers or the greatest increase in sales?
- Which market had the most engaged customers or the highest website traffic?
- Which market feels like the best strategic fit for your business?
- Which market represents the greatest opportunity for growth?
Once you’ve decided on a market, it’s time to start developing a marketing and sales plan to target the rest of the accounts on your list.
Step 10: Develop a marketing and sales plan
Now you’re ready to strategically create a marketing and sales plan that targets your ICP in a way that’s unique from your competitors. This plan should include a mix of online and offline channels. Some channels you may consider include:
- Paid advertising (e.g. Google AdWords, Facebook ads)
- Search engine optimization (SEO)
- Content marketing (e.g. blog posts, eBooks, infographics)
- Social media marketing (e.g. posts, influencer outreach, paid social media ads)
- Public relations (PR)
Once you’ve identified your channels, you need to create content that resonates with your target market at every stage of the customer journey and develop a strategy for promotion and distribution.
Exegraphic data also comes in handy here. Because instead of creating a marketing plan to appeal to a static profile, you can use exegraphics to inform your strategy with insights, such as:
- Whether a company’s director is an early adopter of new technology
- Which departments within a company are currently shrinking or expanding
- Where and how a company communicates its value to the public
- How many people work on a company’s data engineering team
- What are the core functions of newly-hired customer service reps
By knowing this information, you can personalize your marketing message and offer to each company, increasing your chances of success.
Expanding into new markets can be a stressful endeavor if you’re relying on outdated methods for developing your ICP, target account list and outreach strategy.
But by using Rev to collect exegraphic data on your best customers and build a dynamic aICP, you can minimize the risks involved and ensure the market is worth pursuing before fully investing your resources.
Want to see how it works for yourself? Get a free ICP audit to find your next best customers—before you even enter the market!