5 Great Market Analysis Tips for SMB Sales Management

You cannot sell anything unless there is a market willing and able to buy it. You also cannot sell to a market without understanding it.

Yet so many small-to-medium-sized businesses (SMBs) have not analyzed their market in years, if at all. They may have lucked into an offer that put them on the map, but they do not really understand why their offer connected, and how to repeat that success.

In operating a business this way, SMBs tend to stagnate, struggling forward on a fraction of their revenue potential. They risk becoming a statistic — one of the thousands of SMBs that close their doors permanently every year.

The solution: study your market. Gain understanding of who is buying from you. Do the same for those who are not, so that you can sell to them, too.

In this article, we break down five great market analysis tips for SMB sales management that every fractional sales management services agency utilizes:

• Identify your target market.
• Analyze competitor strategies.
• Leverage low-cost market research tools.
• Focus on local market dynamics.
• Regularly review and update your analysis.

There is a lot to discuss, so get ready to take notes.  Let’s go!

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Understanding Market Analysis for SMBs

Market analysis is the process of gathering data about a market and attempting to draw insights from that market. A “market” may be a geographic area, a target demographic, a set of buying behaviors, or a combination of the above.

Market analysis usually involves some or all of the following:

• Understanding your customers: This includes current customers, as well as non-customers who could be converted.
• Understanding the competition: What makes them different? What are they doing versus what they are not doing?
• Understanding your market positioning: What role do you fill in your niche that competitors do not or cannot effectively fill?
• Pricing strategy: Determine what prices will be competitive and attractive to a given market.
• Designing strategies: Create sales and marketing strategies around your understanding of a market to increase revenue.
• Managing risk: This is essential in the face of shifts in economic conditions, market behaviors, and competing offers.
• Identifying expansion opportunities: Look at similar and accessible markets, or new ones that can be reached with different messaging.
• Making investment decisions: This is especially important regarding assets, acquisitions, and other allocations of capital.

Market analysis is not just for big enterprises. Even basic market analysis can help SMBs make informed, strategic decisions that set the company up for success.

1. Identify Your Target Market

It is never too late to start thinking about who exactly it is to whom you are selling. It is a mistake to think of your customers as faceless ATM machines. People are buying your product or service. If you are not constantly face-to-face with them, it can be easy to forget this simple fact. Even if you do see customers every day, you still have not put in the effort to identify the patterns that unify them into an identifiable target market.

Hopefully, you have been collecting data about your customers, including the following:

• Age
• Gender
• Income
• Educational level or background
• Occupation
• Marital status
• Geography
• Lifestyle (hobbies, interests, values)
• Personality and psychological traits
• Behavior (spending habits, buying behavior, loyalty)
• Attitudes toward your market or industry
• Decision-making process
• Influencers they follow

If you do not have this data, there are ways to reverse-engineer these data sets from your customer list. You can also use qualitative observations to start putting together a picture of your ideal customer.

Whether assembled through data or intuition, what you are building is called an Ideal Customer Avatar (ICA). Companies often give their ICAs a name, a bio, a detailed description, maybe even a headshot pulled from stock imagery of smiling people. This way, whenever you design a new product, offer, or marketing message, you can imagine not how some faceless market will react, but how “Kirk” or “Maria,” your ideal customer, would react.

2. Analyze Competitor Strategies

You do not necessarily have to do all the work of market analysis yourself. Often you can copy from competitors. Especially if you have a big, enterprise-level competitor in your market, they have probably invested significant resources into market analysis. You can follow in their footsteps of success through competitor analysis.

As soon as it’s practical, someone on your team should become the “competitor whisperer” of the company. This is someone who lives, breathes, eats, and drinks the content of your competitor. See what messaging they consistently use and tend to target. You can glean much about what your market responds to from the messages and offers that are regularly put out into the marketplace. If possible, opt into their marketing funnel and even buy their low-ticket offer so that you can look further down their funnel at their mid- and high-ticket offers.

Once you identify their go-to strategy or messaging, you can go toe-to-toe with them and compete for the same market. You can also look for more opportunities in who they do not target. If their messaging leaves a big market segment underserved, that may either be an unproductive market within your niche, or a treasure trove of potential customers waiting for an SMB like yours to speak their language. 

3. Leverage Low-Cost Market Research Tools

SMBs sometimes think they cannot afford the high-tech market research that enterprises can. However, it is amazing how much insight you can gather from low-cost or even free market research tools. Some of the resources that are easily accessible to almost any SMB include: 

• Google Trends: Tracks searches for specific keywords in a specific area over time.
• Google Keyword Planner: A segment of Google Ads that lets you assess the volume of and competition for various keywords. 
• Social Media Insights: Analytics tools built into most social media platforms that quickly parse your audience. 
• Surveys and Questionnaires: A basic 2-3 question Google Form included on your “thank you” page, posed to your social following, or blasted out to your email or text message list can start filling your coffers with valuable data. 
• Competitor Analysis Tools: Helps unearth your competitor’s web presence, targeted keywords, and sources of traffic. 

4. Focus On Local Market Dynamics

Most businesses serve a local demographic. Even in the Internet Age, the majority of commerce happens face-to-face, powered by familiarity, affinity, and trust (the proverbial axis of “know, like, and trust”).

If you serve a local demographic, focus on area dynamics with local market analysis. Interview your local customers, peers, and business leaders. Local business and trade organizations like the chamber of commerce can serve as a valuable source of local insights. Local libraries are surprisingly robust in their accumulation of data relevant to a local market.

5. Regularly Review and Update Your Analysis

The most important thing to remember is that markets are dynamic. One of the biggest mistakes that a SMB can make in market analysis is only doing it once and not revisiting it. The market could move on and you would never know it until your sales projections started lagging.

Whatever market analysis strategies you rely on, put it on your calendar to review and update quarterly or annually at minimum. This is your chance to discover how your market has changed. 

Not only will this help you keep your current offers relevant, but it also opens you up to opportunities to develop new offers to meet the evolving needs and behaviors of your market.

Summing Up

If you have not analyzed your market recently (or ever) it is time to start. SMBs that dedicate themselves wholeheartedly to understanding their markets will have a competitive advantage in their niche. Applying the market analysis tips outlined above, they can effectively target messaging, achieve product-market fit, and consistently develop new products and services to serve their current market and open up new ones.

Have burning questions about SMB market analysis? Not sure where to start? Digital Authority Partners (DAP) can help. Contact us today to turn a level up managing your small-to-medium sized business!