Getting the Lay of the Land: Understanding Your Market

When you’re running a business the one thing you have to understand is the landscape you’re operating in: the customers you’re selling to and the forces that motivate them, the other businesses you’re competing with, and the financial conditions that inform the actions of everyone, as well the ways in which these all interact: in a word, your market.

Today we’re taking a look at the ways you can get an understanding of this landscape so you can navigate it successfully.

Your Customers

The first and perhaps most important part of the market is the big group that makes up your potential customers.This isn’t just the people already shopping with you – you need to understand the broad spread of everyone who fits the profile of a potential customer and the reasons why they do and don’t choose you.

Market research is your friend here. It can help you build that profile of a customer for your business, and suggest ways you can interrogate it further to get more useful information. Once you know the sort of person who’s likely to be spending money with you, you can drill down further into the reasons people choose your business above your competitors, and why people choose other businesses instead to refine your strategy for reaching and persuading the maximum number of customers.

Market research can also help you understand your business better. For all the money and effort you spend on efforts to build your brand, it’s what customers think that ultimately decides what your brand is like. Having a clear sight on how your business is received by it’s public is important for effective marketing.

Your Rivals

Working with specialists on an ongoing programme of competitor research, competitor benchmarking and even wargaming around key decisions. These projects help you understand, in order, who your key competitors are, how they rank against you in the key metrics that define success in your field, and how they’re likely to react to things you do, or developing situations in the market. For example if you foresee (as many do) an oncoming recession and a period of low liquidity and decreased revenue, it’s helpful to know how your competitors are likely to react to that as you make your own plans.

The Financial Weather

This is perhaps the most important thing to understand, as it informs your own budgeting, your customers’ behaviour and what your rivals will be planning. It’s the force that turns all these disparate actors into a big interconnected system.

There’s no sure way to see what’s coming but you can stay informed: keep abreast of the financial news, find projections with a good record and check in with specialists regularly, especially when you’re planning big projects or long term plans.