Finding customers is a long and expensive process for startups, especially if they have little or no brand recognition. Once they do develop a customer base, the last thing they want is to lose it after one sale.
That’s why it’s so important to prioritize future-minded strategy over short-term opportunism -- even (or perhaps especially) during your startup’s growth phase. It sounds simple, but after running a business all these years, I still struggle with this.
Focus on finding secondary markets.
Exploring secondary markets for your product is a good way to firm up your long-term outlook. On top of that, once you expand, you’re afforded the luxury of an additional customer base to fall back on if you’re ever struggling with your primary market.
Every product has an inevitable life cycle: starting slow, accelerating, reaching a peak, slowing back down and then sometimes diminishing or disappearing altogether. This is why the most successful companies in the world are constantly coming out with retargeted second-generation products and looking to create new cycles with new demographics.
Finding a secondary market isn’t as difficult as you’d think. It can be as simple as adjusting your packaging.
Kellogg’s, for example, has mastered the art of selling nearly identical products to different markets. Although many of its cereals are quite similar in taste and appearance, the packaging sets them apart. It’ll either target kids with cartoon mascots or aim for adults by flaunting nutritional info.
Along the same lines, my company unlocked a brand-new market once we realized our health-testing devices could also be used on animals. With simple tweaks in packaging and marketing, we’re now a fixture in the human and animal health technology industries.
How to get started.
It’s never too early to focus on creating new products or repackaging existing products for new markets. Here are five steps for doing so:
1. Plan ahead. While you’re developing your startup, you should already be thinking about a secondary market. Position your product from the get-go knowing that you’ll want to expand, and build this plan into your overall launch strategy.
2. Define your secondary market. A secondary market can be as specific as an age group or as broad as an entirely new vertical. Use your company’s mission and goals, as well as market research, to drive just how vast your expansion is.
3. Walk before running. Make a timeline of your launch strategy, and take things incrementally. Don’t try to tackle everything at once; wait until you’ve successfully penetrated your primary market before diving into the secondary one.
4. Refine your marketing. Be prepared to adjust your marketing strategy once your secondary market opens up, but don’t do anything too drastic; you still need to appeal to your primary market. Funding a new strategy can be hard for many businesses with limited or no marketing staff, but the extra revenue that a secondary market brings in can reduce the impact of higher costs.
5. Stay focused. Always remember that your primary market is the core of your business. Never take it for granted, and never neglect it. Your secondary market is just that -- secondary. The best way to avoid neglecting your core market is by constantly listening to customers, using metrics, tracking sales and incorporating feedback into improvement. Consider having separate teams dedicated to each market that are both searching for ways to improve your product, customer service and marketing techniques.
As an entrepreneur, I know you’re faced with so many distractions every day. But if you can resist the temptation of short-term gains and focus on tapping into new markets, you’ll find yourself enjoying success long into the future.