Want to Grow Faster with the same effort? Increase your Market Clarity!
How do you grow your business as fast as possible with as little effort as possible? As a growth private equity investor with strategic consulting services, we put a significant amount of resources against researching, addressing and testing this issue and believe that we are narrowing in on a simple but powerful assessment tool for it, discussed here.
The answer is increasing your market clarity. Market clarity is a simple metric that lets you know
- How clearly you truly “see” your target market,
- How clearly you design and develop your market “touch points” to create the best offering in your target market, and
- How clearly your target market participants “see” how your product and/or service is truly unique for helping them achieve their goals.
Give it a try by taking the following assessment:
Target Market Clarity- is the target market segment clear to us?: We have identified and prioritized one or more highly attractive target market segments where we truly have the unique insights and capabilities to capitalize on them and where we believe we can create and hold the number 1 market share.
Target Market Clarity Score: Score 0% to 100% where zero is “absolutely not” and 100% is “resounding yes”
Our Target Market Clarity Score:_____%
Target User Clarity- Are the target users and uses clear to us?: We have identified the people/roles in each of our target segments that come into contact with our product (e.g., install, configure, administrate, user by role) and have unique insights (throughout the product lifecycle) into what they need to accomplish, how they want to accomplish it, and what their criteria is for a great product that could help them accomplish it.
We understand the competitor offerings in detail for each of our target segments and have a unique understanding of their capabilities and flaws.
We understand how the each of the user roles perceive us and our major competitors with respect to the important user criteria.
Further, we know exactly what we need to do to align with the target users’ unmet, and perhaps unknown, needs and wants and get a “wow” from them.
Target User Clarity Score: Score 0% to 100% where zero is “absolutely not” and 100% is “resounding yes”
Our Target User Clarity Score:_____%
Whole Product Clarity- Is our whole product the clear winner in the users’ minds?: Our whole product (product, professional services, customer service, etc.) is highly differentiated and exactly matches what the target users want to accomplish throughout the product lifecycle (for each target segment), how they want to accomplish it, and we get a “wow” out of most of our target users.
Whole Product Clarity Score: Score 0% to 100% where zero is “absolutely not”, 50% is “we have the right product management process and product management lifecycle, including right whole product vision and roadmap and the answer will be “resounding yes” soon, and 100% is “resounding yes”
Our Whole Product Clarity Score:_____%
Target Buyer Clarity- Are the buyers and buying process clear to us?: We have identified the people/roles in each of our target segments and we have unique insights into their buying process, decision-making process, budgets, buying criteria, words, messages, content including free content and products) that will resonate with them and help them understand and choose among the options, the trusted people/places that that they go for information and guidance (a.k.a., trusted sources from their perspective, marketing/influence channels from our perspective) and the way that they like to purchase products like ours (a.k.a., buying channels from their perspective, sales channels from our perspective).
We understand the positioning, messaging, content (including free content and products), marketing/influence channels and sales channels of our major competitors in each target segment.
We understand how the each of the buyer roles perceive us and our major competitors with respect to the important buying criteria in each target segment.
Finally, we understand what we need to do to optimize the marketing and selling of our product to our target buyers in each target segment given the above insights.
Target Buyer Clarity Score: Score 0% to 100% where zero is “absolutely not” and 100% is “resounding yes”
Our Target Buyer Clarity Score:_____%
Our Marketing Clarity- Are we a clear and viable option in the buyers’ minds?: We have a brand promise, messages, content, and a pricing model that is valuable, relevant, highly differentiated, and aligned with the best available positioning with the target buyers (for each target segment).
We distribute our messages/content through the best marketing/influence channels to create awareness and influence our target customers for each target segment.
We have optimized our marketing funnel to maximize conversions of the best fit prospects for each target segment and minimize the resource drain for prospects that we do not have a good fit with.
Finally, we measure and monitor results and adjust our messages/content, our marketing channels, and our marketing funnel process to continuously improve our performance.
Marketing Clarity Score: Score 0% to 100% where zero is “absolutely not”, 50% is “we have the right marketing vision and roadmap and the answer will be “resounding yes” soon, and 100% is “resounding yes”
Our Marketing Clarity Score:_____%
Our Sales Clarity- Are we the clear winner in the buyers’ minds?: Our sales channels and sales touch points within each channel are tuned to the buying process, decision-making process, and buying criteria of the target buyers in each target segment and we reinforce the brand promise, product positioning and competitive differentiation throughout the sales cycle.
We have segmented our sales efforts to the relationship lifecycle with the buyers and to the unique market segments to ensure that we align with the buyers’ needs (e.g., new customer acquisition team, renewal team, account management team).
We have optimized our sales funnel to maximize conversions of the best fit prospects and minimize the resource drain for prospects that we do not have a good fit with.
We have optimized our sales approach through appropriate indirect sales channels (e.g., VARs, Affiliates, OEM) to help them optimize their approaches to the target buyers.
Finally, we measure and monitor results and adjust our sales processes to continuously improve our performance.
Sales Clarity Score: Score 0% to 100% where zero is “absolutely not”, 50% is “we have the right sales vision and roadmap and the answer will be “resounding yes” soon, and 100% is “resounding yes”
Our Sales Clarity Score:_____%
Brand Clarity Score- Is our brand promise clear to the target customers?: Each of our market touch points (marketing, sales, product, professional services, customer service, business development, etc.) are all highly aligned with and reinforce a simple brand promise that we make to all of our target market participants (note: in my mind, branding is about consistently delivering the brand signals through all the touch points, not about spending a lot of money on advertising). The brand promise is valuable, relevant, and differentiated in the minds of our target customers (users and buyers) and aligned with their needs and wants.
Our most important touch points (branding signals) in the minds of the buyers and users are particularly well developed and we are very consistent in their delivery.
Brand Clarity Score: Score 0% to 100% where zero is “absolutely not”, 50% is “we have the right brand vision and roadmap and the answer will be “resounding yes” soon, and 100% is “resounding yes”
Our Brand Clarity Score:_____%
Now, use the components to calculate your market clarity score
Calculate your Market Clarity Score by multiplying all of the components:
Our Target Market Clarity Score:_____% multiplied by
Our Target User Clarity Score:_____% multiplied by
Our Whole Product Clarity Score:_____% multiplied by
Our Target Buyer Clarity Score:_____% multiplied by
Our Marketing Clarity Score:_____% multiplied by
Our Sales Clarity Score:_____% multiplied by
Our Brand Clarity Score:_____%
Our Market Clarity Score: _______% (note that if your answer is not between 0% and 100% then you made a calculation error)
Interpreting your Market Clarity Score
Each of the components of your market clarity score is like a filter that reduces the ability for you to see your customers clearly, reduces your ability to have a clearly differentiated and valuable brand in your target segment or reduces the target customers’ ability to see your differentiation and brand clearly. Any individual filter can dramatically reduce your overall growth prospects (although in some cases you might still get lucky and stumble into a good situation even without high market clarity).
Score 0% to 25%- Don’t despair as all companies start at 0% and you could be a diamond in the rough, particularly if you already have a good economic model. Focus most of your resources on the high impact filters and, possibly all of the filters (the ones closest to zero) and the diamond could really start emerging.
Score 25%-50%- This is a pretty standard score for early companies. Work on the high impact filters and you should see significant improvement, particularly if your economic model is already working. If your economic model is really working well, you could put more resources against methodologies to scale, organizational and operational development, and growth, but you will still benefit by improving your market clarity.
Score 50%-75%- this is solid performance, but working on the higher impact filters should still improve your growth and improve your economic model. If your economic model is working okay, then you should might also more of your effort toward improving methodologies (that generate consistent touch points) for scalability and on your organizational and operational development and consider putting more resources toward growth.
Score 75%-90%- this is excellent performance and if your economic model is working then you may want to move much of your effort much more toward improving methodologies for scalability, your organizational and operational development, and putting much more resources toward growth.
Score 90%-100%- this score is probably created because you were overly optimistic with your scores. Ask others in your company to score the company as well and you will probably find that you get a more realistic score.
We have found that one of the largest impediments to success of young companies is low market clarity and one of the biggest mistakes that companies make is focusing too much on expansion while their market clarity is low…the result is (more often than not) lower than anticipated growth, wasted resources, and in some cases downsizing in order to increase market clarity and then starting the expansion again.
We have also found that some companies get lucky with their approach despite low market clarity, but the growth generally slows at some point and they need to increase their market clarity in order to get the growth back. Unfortunately, it is really difficult to change momentum and some companies never do get back on a fast growth track once they lose their momentum in the first place.
Finally, we have found situations where a company gets going with really clear market clarity that comes from the founding team, but as the company grows the founding team gets busy with management activities, the market clarity goes down, and the growth slows at some point.
I am sure that there are a lot of other scenarios, but the key learning that we have had over time is that you can design for growth by creating high market clarity. Ultimately, the best first goal for all emerging growth companies should be to create and maintain high real market clarity and to work hard to maintain it throughout its life. As you penetrate and own target segments, expanding to the next priority target segment and/or expanding your product offering to your target segments are good ways to continue on your growth trajectory…of course, you will need to maintain/increase your market clarity in all of your market segments if you want to continue to won them!
btw, if you are seeking venture capital financing, having high market clarity will really help you get a growth capital investment and having a strong hypothesis with a good set of facts that make the hypothesis plausible will help you get an early stage venture capital financing completed.
let me know your thoughts…