Before you sell, you need to decide to whom you are selling, what are you going to sell them and why they should listen to you. This is actually a tougher job than it sounds and some companies have teams or individuals dedicated to this role entirely. The nature of your product and business strengths tend to determine the type of company (enterprise, channel or small- to medium-sized enterprises, also known as SMEs, for example) and the industry or sector (FMCG, High-Tech, Travel etc.), what you need to do is determine the specific companies you will target and how you will target them. This is no easy task but doing it well makes your job an awful lot more straightforward later on. As a counterpoint, doing it poorly can mean you burn an incredible amount of time and money trying to catch up later.
Your aim here is to research, ask questions and gain a deep understanding of the companies you are trying to sell to. Broadly speaking, you are looking to determine The State of the Market.
The State of the Market
The precise nature of the market you are trying to sell to will always vary. It might be a particular industry vertical (‘retail’ for example), it might be a geographical area (Western Europe) or it might be defined by a particular set of event-based characteristics (companies having undertaken M&A activity in the last six months). The truth is, it doesn’t really matter. Your job is to become an expert in this market, its companies, products and people.
A lot of your work here will be in front of a computer screen, reading reports and analysing data. However to truly understand a market you also need to get out of the building and talk to people. You may be more comfortable with one than the other. If that’s the case, you need to get comfortable with the other.
Breakdown the State of the Market into the following sections:
1. Define the market as specifically as possible
2. Determine who the major players are
3. Identify market influencers
4. Identify common issues and opportunities across the market
5. Determine how you can resolve or take advantage of these issues and opportunities
Each of these sections requires effort and I will show you the optimal ways to spend your time now.
Define the market as specifically as possible
You have your loose market based on a defined set of characteristics such as products they sell (industry vertical), physical area of operation (geography) or something else (recent company activity such as a merger or acquisition). Now you need to break the market down yourself to understand how everything fits together to see if you can spot common themes or trends, or even to see if there is a particular subset of the market that you should be focussing on. At the end of this section, you should be able to draw a map of the market with example companies, demonstrating how they fit together and why each particular area might be important. I like to actually produce this map so I can always refer to it.
How do you do this? It is straightforward really. Ask questions and find out the answers.
Let’s assume you are looking at a particular industry vertical. Ask the following high-level questions to begin:
1. What are the defining characteristics of this industry vertical?
2. Who are the well-known players?
3. What do they provide and to whom?
4. Why does this vertical exist?
Then, delve deeper:
1. Are there different sub-sectors within the vertical?
2. Are there key players in each sub-sector or do major players work across every sub-sector themselves – or is it a combination of both approaches?
3. Looking at the well-known players, who are their main customers?
4. Who are their main suppliers?
5. Do they have core products?
6. What is a typical customer journey?
7. What is a typical product journey?
8. What innovation is occurring?
9. Who are the new entrants to the market and what is their USP?
10. Is there anything else about the specific market I should consider?
There are resources available to you today that you can use to really understand all of the above. Just like the buyer can find out about you, you can find out about them. Start with the key players and their websites – look for case studies, webinars and whitepapers. Then look through the highlights of their annual reports. Look for common themes and search for stories around those themes. You will be doing a lot of this work online but if possible take the opportunity to get out of the building and talk to people in the industry.
Case Study: You need to get out of the building
Early on in my sales career I had a meeting with our senior management team. I was relatively new to the company and had an idea for which I wanted their support. The London 2012 Olympic and Paralympic Games were a few years away and I believed there were significant opportunities for our SaaS-notification and messaging product at The Games. The UK government was pushing out a lot of press on the fact that The Games represented a fantastic opportunity for companies to provide their products and services. They were committed to ensuring that a significant portion of the contracts on offer did not go only to the big Business Process Outsourcing (BPO) firms but would go to SMEs. If we planned this right we stood to make a lot of money.
They supported me and I set about building a plan that would give us the greatest opportunity for success. I spent months researching, learning, trying to understand how government contracts (or quasi-government contracts) worked, exploring every avenue for how we might win business using the wealth of information that existed on the web. There was a lot out there and I dedicated myself to it. The one thing that I did not do however was get out of the building and talk to people. Steve Blank (a serial entrepreneur and author of several books on entrepreneurship) advises all start-up company founders to get out of the building and start talking to people, particularly potential customers, as soon as possible: the earlier the better. This very same philosophy can easily be applied to salespeople. The best way to understand a market is to speak to people in that market. Imagine that you are trying to launch a business in that market yourself and get out there. Yes, the background research is important, but if you don’t ask people questions it will be that much harder to find out the truth.
This, unfortunately, is what happened to me. I stayed indoors. The weeks and months passed and I thought I was making progress. But I wasn’t. The plan I was developing was severely flawed. A lot of the available information on the web reflected how things ‘should have been’ not how they really were. This meant that when it came to execution, I was executing the wrong plan. As an example, yes, a lot of contracts were supposed to be going to SMEs, but the key piece of information I could have discovered by talking to people who know was that most projects would only be sub-contracted to SMEs. The bigger BPOs and technology companies would still be expected to ‘front’ the deal.
So ultimately I wasted several months, by which point a lot of these sub-contracts had already been awarded and the opportunity no longer really existed. I had lost my employer the opportunity to make millions of dollars because I did not get out of the building.
I would not make that mistake again.
Let’s take a look at how I previously established the State of the Market whilst I tried to understand the buyer.
Case Study: Establishing the State of the Market
This section can seem like it is going to be an awful lot of work. But it really doesn’t have to be. In a previous life I decided to understand the logistics and supply chain market to see if there was a revenue opportunity there. I took each of the questions listed earlier and set about trying to answer them using a combination of techniques. Let’s approach this now.
Question: What are the defining characteristics of this industry vertical?
Answer: The movement of goods from point A to point B
- By road
Answer: The management of resources necessary for the movement of goods from point A to point B, including:
Answer: Different companies specialise in different areas
Answer: Many companies are long established and have a long history
- Likely to have lots of different systems
- Likely to be quite fragmented
Answer: The movement of goods can be:
- Business-to-business (B2B)
- Business-to-consumer (B2C)
Question: Who are the well-known players?
Answer: The majors include (not exhaustive):
- Kuehne + Nagel
- DB Schenker
Question: What do they provide and to whom?
Answer: A range of services
- Warehouse management
- Movement of goods between companies, within a company or directly to the consumer, by different transport mechanisms
- Consultancy services
- Contract services
Answer: Major customers include:
- Retailers and marketplaces such as Amazon
- Technology companies such as Apple
- Grocers such as Walmart
Question: Why does this vertical exist?
Answer: Because it is more efficient for businesses to outsource logistics to professional logistics companies as they benefit from:
- Expertise and knowledge on a global scale
- Shared resources
- Economies of scale
Then, delve deeper:
Question: Are there different sub-sectors within the vertical?
- Often split by B2B and B2C
- Often split by transport mechanism (rail, road, sea, air)
- Often split by those companies that own their own assets versus those that use third-party assets to complete the job
- There are also technology companies in the sector providing software services with specialities including workforce management and transport management
Question: Are there key players in each sub-sector or do companies tend to service the entire sector?
Answer: A mixture of both. Some of the major players have subsidiaries across every sector. Others specialise in one area only
And so I go on, you get the idea. At this point, all of the above really comes from information the major players in the industry push out to the market, either from their annual reports, in press releases or as case studies. You are just trying to get a feel for the market before you deepen your investigation even further by actually talking to people.
After this depth of research, you should be able to hone in on a particular area of your market or define it more completely. For example you identify that retail is actually made up of several more defined subsectors, including ‘online retail’, ‘bricks and mortar retail’ and ‘CRM providers’, all of whom warrant a slightly different approach.
Who are the major players?
Next you need to define who the major players are. Who are the well-known companies within the sector? You don’t need to do a lot of in-depth analysis as this stage. Just pick the biggest companies in the market. At this stage you are using these companies as bouncing off points to help you understand the market. Don’t think about companies you might like to sell to. Think about companies that will help you understand the market. Typically, you need to think about:
1. Which companies are the largest in the sector? Look at the largest by revenue, largest by market capitalisation, largest by workforce and largest by brand recognition
2. Do these companies form part of larger companies and do they have subsidiaries themselves?
3. What makes these companies successful?
Who are the key influencers?
This is where things begin to get interesting. Within any industry there are a range of stakeholders. We have already looked at some – the major companies that profit from the sector. These companies tend to lead from the front, often defining the agenda and driving everyone forward. But there are always a host of additional stakeholders that you need to understand.
1. Customers – customer opinion potentially influenced by other sectors
2. Suppliers to the market – like you and your company
3. Industry Analysts – a key group to study and talk to if you want to get ahead of the curve
4. Industry Associations
5. Media publications
6. Event organisers – and the events themselves
7. Independent consultants – frequently long standing industry veterans with a wealth of knowledge
8. Innovators – companies looking to make a name for themselves by shaking up the industry
Case Study: Who are the key influencers
There are lots of avenues to explore here but the best two starting points are media publications and industry associations. This is because most of the time they have commercial arms themselves and their knowledge, databases and contacts are for sale in one way or another. Take advantage of this.
Do a quick search online for media publications around the industry you are interested in: almost every industry sector will have several. Make a list of the top five or ten along with contact details for the teams responsible for selling advertising in their publications alongside anything else they might sell. Then simply ask them questions. Explain that you are a company new to the sector and are looking at marketing options. That includes print advertising, online advertising, webinars series, events, seminars, trade shows or whatever else they might offer. Then have them take you through what they put on, when they put it on and how much they cost. Simultaneously ask questions about their readership, what companies their publication is aimed at and what kind of coverage they get. Ask about editorial contributions, about your competition and anything else you believe might be useful. Remember that you are the buyer in this case so ask as much as you want.
Get on their newsletter distribution lists. Their events, seminars and webinars will more than likely have dedicated websites so make sure you explore all of those and sign up for anything free that makes sense. There is a wealth of information out there you just need to know where to look: this is a great way to start. Finally, most media outlets are happy to give you tickets to attend paid events as a trial. Take advantage of this and go to as many as you can. No doubt they will be looking for you to ultimately spend money with them. If you don’t have any to spend just yet, that is OK – who knows maybe you will if you make a success of the sector. If you do have money, put them in touch with your marketing team and remain involved with any discussions so that they view you as the expert within your organisation. The important point is that you now have easy access to their content and a direct line to key people there: use this direct line to bounce ideas around and ask questions.
Start to look for trends in their content, usually individuals that frequently contribute. These might be senior executives from potential buyers, independent consultants, industry analysts from companies such as Gartner or experienced journalists. Look for opportunities to drop an email to these people. A simple ‘Hi I read your article in this month’s Widget Weekly. You spoke about how widgets are becoming even more important in the 18-25 age group. [Insert question about the article]’ could go a long way.
It doesn’t matter if they don’t reply at this stage, just keep track of it and keep at it, eventually you will start getting responses or when you do meet them at an event you’ll have something to talk about.
Establish a relationship with as many of the outlets and organisations as possible – with some of them this can be achieved by simply enquiring after their services, signing up for newsletters, etc.
Identify issues and opportunities
When selling a product you need to think about what this means to the buyer. This usually means figuring out what is on his or her plate right now in terms of issues and opportunities and then figuring out how your solution can help them. We will look at how to do this in more detail later but for now you need to understand what some of the common challenges are across the industry. This is important for two core reasons:
1. It will help you to identify where you can best pitch your product
2. It will help you talk in the language of the industry
I can’t overstate the importance of the second point. Later on, when you pick up the phone and talk to a prospective customer, or when you bump into one at a conference, you need to be able to hold your own in a conversation. You need to be able to refer to common challenges and use words that he or she understands. This way when the time arrives for you to talk to the buyer, you are already talking in a language they are familiar with and you will be able to pinpoint specific challenges you can help them address. This is crucial, specifically when you are trying to initially make contact. There is nothing worse for a buyer than a seller trying to sell something irrelevant to them with language that means nothing to them. There may be a good product hidden away but as a buyer you just do not have time to investigate. However if a buyer receives information specific to their lives and challenges, in a language they can easily understand, it becomes much easier to say yes.
So how do you do all of this? Use the information you began gathering on the major players and key influencers. There is a wealth of knowledge out there already, across:
1. Company blogs
3. Analyst reports
Work your way through all of these and start building up your knowledge.
Identify where you can help
I don’t mean you need to put together exact proposals at this stage – each company will be slightly different and your approach should be too. What I do mean is have an initial stab at looking at challenges the industry is facing and determine where your product or solution can help. Combine this with your map of the market and you should be able to determine where best to focus your time and energy.
Check out our Go-To-Market Strategy Advantage Plan for a quick reference guide on this, then move on to the next part of the process - selecting the right buyers. Alternatively, get in touch with us and we'll figure it out together.