Over the past several weeks, we have had conversations with an online fitness business interested in expanding its services into new geographies. The objective was to develop a “go–to market” strategy that would lead them to a successful launch so we provided them with a framework that we thought would be useful for you as well.
Keep in mind that this is applicable to any business, although we will referencing the fitness service we have worked on as an example.
Who is your customer in the “new” market?
This should be the very first question that needs to be answered. And in our opinion, it helps to try to forget as much as possible about who your customer is in other markets you are already working in.
It is easy to be biased about who your customer is in “market A”, but people can be radically different in “market B”, thus adopting a beginner’s mind is helpful for this exercise.
And how can you find who your customer is? Through thorough research, which is the initial step in our “go-to market” framework.
The “Go-To Market” Framework for your sport business
With this framework, the goal is to match the external environment with your internal capabilities to define a target market you will go after and a value proposition to meet their needs.
Again, the focus should be on finding the user that needs the solution you have to offer.
Let´s go into some detail:
The External Environment
The first step is to study, using third party information for the most part, what we define as the external environment. This is usually defined by four main pillars:
- Demographic profile defined by variables such as population, population density or age group structure.
- Economic information of the market including Gross Domestic Product, Income per inhabitant or unemployment rate.
From personal experience, we strongly recommend, if you have enough resources, to invest on a geolocation tool to carry out the demographic and economic analyses. Not only do they provide information of great value, they help you drill down on specific locations rather than focusing on general regions. Moreover, they also help you configure automatic reports based on the variables you wish to study for a given location. This is particularly useful to avoid unnecessary trips to places that do not meet the potential you expect.
- Trends, including general market trends relevant to your business and industry trends, which in this case, would be fitness related.
- Competition, which should include:
Direct competition in your industry
Substitute products: Which products may satisfy the same need your potential customers have although they do not belong in the same category as you. For example, would nutrition-based services be considered substitute products of a fitness service?
We also like to think that anything that takes time from your customers that they could be dedicating to you is a substitute product. For instance, Netflix could be considered a threat to an online fitness service.
We are aware though that this only provides information from third party sources, which usually is not enough. Ideally, once you have identified a target market, you will generate opportunities to establish contact with potential users and gather information from them directly. As such, be ready to adjust your initial hypothesis regarding who your customer really is once you can combine both sources of information.
The Internal environment
The second step would be to analyze yourself internally, focusing on:
The marketing mix (product, price, channel, promotion, people, etc.)
Available resources within your organization (team, assets, debt, capital structure, etc.)
Operations & processes: How do you execute on your strategy?
The brand promise: What problem will your brand solve in that market? Consider that not all markets share the same pain points…
As we previously mentioned, the match between the external and internal environment should help you define an initial target market to go after and as well as your value proposition to that target.
In summary, the question to answer is:
“Which group of people need a solution like the one you offer and are willing to purchase it from you instead of doing so from the competition?”
Establish touch-points with your potential market
The better you understand your customer will make it easier to establish relevant touch-points with those customers. Once you are able to generate initial leads, we recommend focusing on:
What is a “day in the life” of your target market?
What are their goals?
And their concerns?
What behaviors demonstrate a potential interest in your solution?
After recognizing the context your target market moves in, you will be able to develop a sales funnel for each potential customer segment you have identified, which will be the foundation of your actual launch into the market.
The marketing sales funnel
Essentially, the sales funnel helps you reflect on how you will go through the process of generating leads, converting them to your customers and maintaining them over the long term.
In this post we provided further detail on how to elaborate a sales funnel for your business. Feel free to check it out.
We do want to reinforce however, that it is key to develop a separate marketing funnel for each customer segment you identify as target.
Analytics & adjusting
Introducing a new product to a given market does not finish with the launch itself. You will need to analyze the initial phases by focusing on the main KPIs for each phase of the funnel:
Awareness: How many people did you impact with your initial efforts?
Consideration: How many leads did you generate?
Purchase: How many people did end up purchasing your service?
Retention: How long do those customers remain loyal to your business?
Referrals: Arguably, one of the most important KPIs for a business. Is your service good enough for others to talk about it?
During an initial product launch, constant analytics is critical as it is what will help you adjust and adapt your service offering and your marketing funnel as much as possible. In this stage we recommend identifying one main KPI for each phase of the funnel and focus on improving it. Trying to gather too much information will delay the decision making, the adjustment of the service or target market and ultimately, risk the successful launch of your business.
Expanding your sport or fitness business into a new market can be a daunting challenge. The key is to fully understand the new market, its macroenvironment and the potential audience you wish to go after. The framework we shared with you in this article has been of great help to organizations we have been involved with in the past and should be of help for your business as well.
We hope you found this useful and please feel free to reach out if we can help you design a tailored approach to your brand, and help you take your sport or fitness business to the next level.
Meanwhile, keep safe.
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