Understanding your market and its dynamics is crucial to your overall success. There are many different ways to define that market: industry, geography, business/professional trade, age, sex, affiliation, product/service need. To be more successful, you need to identify that market, determine what the market needs are, how best to promote, sell and service to that market, how to appropriately price your product/service, and identify who your competitors are and how they are approaching your market. With more accurate information, the less you will need to spend to achieve your success.

Market Analysis

A market is defined as all the customers and prospects that will ever have an interest in or purchase your product or service. What is your market? How do you define it? What are its key characteristics? If you have multiple products and services, you may have multiple markets. If so, are these markets the same? Is the definition of your market the same as your competitors? If not, why not and how is it different? Are your markets growing, staying the same or contracting? Can anything be done to make them grow faster? If so, what? If not, why not? Are your markets new or mature? If they are new, what are you doing to educate your potential buyers?

Knowing which markets to offer your products and services is not enough in this high-speed, quickly changing information age. You need to identify which channels to use to promote, sell, service and up-sell your products? How much money you spend in each channel will be determined by analyzing your market and your competitors.

Industry Analysis

There are many different industries. There are typically identified by their NAICS and SIC codes. Which are your target industries? How large by sales, profits and employees are your target industries? How many companies represent the majority of these industries? What percentage of their budgets are spent on product/services that are related to your offering? Which are the largest companies in those industries? Which of these companies are recognized as industry leaders? What are the current and future needs of these companies? How quickly are these needs changing? What are the preferred sales and marketing channels for them? Who are the key decision makers both within the industry, and within the major companies? What are the typical steps in the average sales cycle and how long do they take to complete? These can vary by industry.

With this type of information, you can construct better, more focussed and successful marketing and sales campaigns? Likewise, you can prioritize your target industries, and pursue them in the sequence that will have the most success for you. Treating all potential customers and industries within your target market equally will unnecessarily increase your marketing and sales expense.

Prospect & Customer Profiling

Who are your key prospects and customers? How do you describe them? What motivates them to purchase your offerings? What turns them off? Why wouldn't they purchase your offerings? Are there opportunities to up-sell some of your other products to your existing customers? Should you consider offering them other new products/services that you might develop or purchase from a third party?

How are current customers needs changing? What channels do they use/like for sales and service? How well do you meet their needs? Is it be cost-effective to make the improvements that they ask for?

Customer profiling involves the identification and characterization of your customers and prospects. With sufficient profile information, you can improve your messaging and the focus of your campaigns. These improvements will directly translate to better sales funnel rates.

Customer profiling also identifies those types of customers and prospects that cost too much to either sell or service. Every company has them. Would it be better suited for those costly prospects and customers to be directed toward a competitor?

Prospect profiling improves product and service positioning, and influences market/sales channel selection and methods. Customer profiling also improves customer retention, and identifies areas for cost-effective product and service improvements.

Competitive Analysis

Today's competitor could be tomorrow's partner. Can you identify who all of your competitors are in each market area? Does this list include both the public and private, global and niche player, or only those that you are concerned about today? Who are your fastest growing competitors and why? Who are the most vulnerable? Which competitors are failing and why?

To successfully compete in your market space, you need to know the strengths, weaknesses, opportunities and threats (SWOT) for each of your key current and future competitors. When you are competing for a key customer, it is insufficient to simply know who your competitors are. Instead, you need to know how your offering compares to theirs, and where each product is best. With this type of knowledge and the proper sales techniques, you will maximize your chances for success.

Initial competitive analysis involves three steps. First the competition by market segment needs to be identified. For new, emerging markets, this can be the most difficult step. This list also should include the potential competitors. These are the companies that can quickly reposition themselves, as soon as you demonstrate that a market is viable and lucrative. In the second step, each competitor is profiled. More information is collected on the close, key competitors and on those that could quickly emerge as a key competitor. In addition to basic company information, the profile includes their SWOT, their current marketing and sales channels, and ideally, their estimated market share. The third and final step involves comparing and contrasting their offerings with yours, and determining who/which are stronger/weaker in each of the key, customer determined categories.

Competitive analysis enables you to gain a competitive advantage. You will know when and where to compete. To keep this competitive advantage, it is important to keep your competitive information up-to-date. Depending on your market and its rate of change, this may sometimes be a challenging task.