As a small business owner, you’ve got to know what’s going on in the market landscape. It’s crucial to have a strong (and up-to-date) understanding of your market, competitors, and customer preferences to inform both your business and marketing strategies.
A strategy for being able to do this well is developing what we call a ‘market perspective’. It’s a synthesis of a broad set of observations, insights, and experiences.
While a market perspective can be documented, it’s not mandatory. Within this article, consider the market perspective as a metaphorical ‘sixth sense’—akin to a muscle that requires diligent care and strengthening for optimal performance.
It’s a plan for keeping your finger on the pulse of what’s going on in your market. And as a small business owner, you need that to be able to compete and win against your competitors.
I. The Importance of a Well-Developed Market Perspective to Your Marketing Strategy
A well-developed market perspective keeps a small business owner highly tuned into what’s going on in the market landscape. That ‘radar’ helps them make informed decisions, shape their marketing strategy, and stay ahead of their competition. Without a clear view of and into the market, it’s challenging to identify opportunities, threats, and trends that may impact their business. Moreover, a poorly developed market perspective can lead to inefficient resource allocation, missed opportunities, and ultimately, a decline in business performance.
If you’re working with a marketing agency, having a well-developed market perspective will help ensure their expertise in marketing and your expertise in your business align to create an effective marketing strategy with a high ROI.
II. The Necessity of Being Strategic and Intentional in Developing a Market Perspective
Being fully tuned in to your market doesn’t just happen by accident. Developing an effective market perspective takes some work, but even more so it takes awareness. You have to be strategic and intentional about the information you gather and the sources you rely on. This means carefully selecting your inputs (where you’re getting your information from), evaluating their relevance, and using them to inform your decisions. A strategic approach to sharpening your market perspective can provide you with a more accurate understanding of your market and help you make better business decisions.
III. Common Mistakes Small Business Owners Make in Developing Their Market Perspective
Many small business owners are unaware of the importance of developing their market perspective or they assume that market perspective is simply knowing your target market, ideal client personas, and such. These are such senseless oversights, and they are costly. Having a weak or no market perspective leads to missed opportunities, wasted resources, and a lack of competitive advantage.
Notice I didn’t say ‘could lead to missed/wasted/lack…’. It does lead to.. It’s not if, it’s when.
IV. How Small Business Owners Can Develop an Effective Market Perspective
To build an effective market perspective, small businesses should include each of these inputs:
- Customers and prospects: Obviously. Speak with them to understand their needs, preferences, and pain points. For example, conducting customer surveys or hosting focus groups can provide valuable insights into what customers value and what improvements they’d like to see.
Even better than surveys? Actual conversations. This information can help you tailor your products or services to better meet customer expectations, resulting in higher satisfaction and loyalty.
- Competitors: Monitor their marketing efforts, products, and partnerships to identify potential threats and opportunities. For instance, if a competitor launches a new product line, you might consider how it compares to your own offerings and whether it’s worth exploring similar opportunities. Additionally, understanding your competitors’ strengths and weaknesses can help you develop strategies to differentiate your business and gain a competitive edge.
- Your marketing agency: Your marketing agency plays a crucial role in helping you develop an effective market perspective. They (should) have expertise in conducting customer research, analyzing industry trends, and developing effective marketing strategies. They can help you identify your target audience(s) and create messaging that resonates with them, ensuring that your products or services stand out in a crowded marketplace.
In this relationship, there’s shared responsibility for both you as the business owner and your marketing agency for developing and using your market perspective as a part of your marketing strategy and plan. Making this a part of your working relationship ensures that your business stays ahead of the curve and remains competitive in today’s rapidly evolving market.
- Industry trends: Stay informed about new developments, technologies, and regulations that may impact your business. Stay up to date through industry content, like subscribing to industry newsletters, attending webinars, and following influential blogs and social accounts. Industry players can help you stay plugged in to the latest trends so you can adjust your marketing strategies accordingly. By staying ahead of the curve, you can capitalize on new opportunities and minimize potential risks.
- Partners and suppliers: Gain insights into industry trends, challenges, and opportunities by regularly communicating with your partners and suppliers. They may have unique perspectives on market developments and can provide valuable information to help you refine your strategy. For example, a supplier might alert you to an emerging trend that you can leverage in your product development, giving you a first-mover advantage.
- Online reviews and social media: Analyze customer feedback, sentiment, and preferences to understand how your business is perceived and identify areas for improvement.
Monitoring online reviews and social media conversations can provide insights into customer satisfaction levels, common complaints, and your brand reputation. You can find the same type of information about competitors also. This information is key in creating an effective marketing strategy.
By addressing these concerns proactively, you can improve customer experiences and strengthen your brand image.
- Local and regional economic indicators: Keep an eye on economic trends that may impact your business, such as commercial developments, changes in consumer spending, employment rates, or government policies.
This knowledge can help you make informed decisions about business expansion, resource allocation, and pricing strategies. For example, if there’s an economic downturn, you might consider offering discounts or promotions to attract budget-conscious customers.
- Networking events and industry conferences: Events are great opportunities to engage with peers, experts, and potential customers to gather insights, build relationships, and stay informed. They can help you discover new ideas, identify partnership opportunities, and learn from others’ experiences.
For instance, you might hear about a successful marketing campaign that you can adapt for your business or learn about a new technology that could streamline your operations.
V. The Critical Importance and Benefits of a Well-Developed Market Perspective
A well-developed market perspective is a valuable asset and a critical necessity for small business owners. It provides the foundation for making informed decisions, refining your strategy (both business and marketing strategies), and adapting to changing market conditions. Here are some ways having a strong market perspective can give your business a significant competitive advantage:
- Informed decision-making: A comprehensive market perspective ensures that you make well-informed decisions based on data and insights, rather than relying on intuition or guesswork. This data-driven approach reduces the risk of poor decision-making and increases the likelihood of successful outcomes.
- Strategic advantage: By understanding the market landscape, you can devise targeted strategies that address specific opportunities or challenges, putting you one step ahead of your competitors. A strong market perspective allows you to anticipate and respond to changes in customer preferences, competitor moves, and industry trends, ensuring that your business remains agile and adaptable. You can be playing chess while everyone else is playing checkers.
- Optimized product and service offerings: A dialed in market perspective helps you identify gaps in the market, allowing you to develop products or services that meet unmet needs. This can lead to increased customer satisfaction, loyalty, and ultimately, higher revenues.
- Identification of growth opportunities: A deep understanding of your market enables you to spot opportunities for growth, such as entering new markets, expanding your product line, or forging strategic partnerships. A well-developed market perspective equips you with the knowledge to be able to ‘peek around the corner’ to see what’s coming, and then seize these opportunities and scale your business effectively.
- Improved customer relationships: By understanding your customers’ needs and preferences you can anticipate them. In turn you are building stronger relationships with them. A well-developed market perspective enables you to empathize with your customers and develop solutions that genuinely address their pain points, fostering trust and loyalty.
- Risk mitigation: A comprehensive market perspective allows you to identify potential threats and challenges before they become significant issues. By proactively addressing these risks, you can protect your business from potential setbacks and ensure long-term success.
- Resource allocation: A strong market perspective guides you in allocating resources effectively, ensuring that you invest in areas that have the greatest potential for growth and profitability. This strategic allocation of resources helps you optimize your return on investment and avoid wasting time and money on less promising opportunities.
- Enhanced competitive advantage: A well-developed market perspective can be a significant competitive advantage, as it equips you with the knowledge and insights to outperform your rivals. By staying ahead of industry trends, understanding customer preferences, and identifying potential threats, you can maintain a competitive edge and ensure your business’s ongoing success.
Developing a strong market perspective is critical for small business owners, and they must prioritize it as a fundamental aspect of their role to drive long-term success.
Having a keen market perspective can be their secret weapon. It’s what enables them to make informed decisions, refine their approach, and stay adaptable in response to evolving market conditions. And do it all better than their competitors.
By continuously strengthening this skill set, business owners can take a more intuitive and informed approach to their business strategy. This, in turn, allows them to understand their market, seize opportunities for growth, optimize their offerings, and establish a strong competitive advantage that fosters long-term success.