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Your Ultimate Guide to Sizing the Market

Assia Salikhova — Tue, 25 Aug 2020 01:45:44 +0000

Your Ultimate Guide to Sizing the Market

Pop Quiz! Which one do you agree with most about sizing the target market??

You only need to estimate the size of your target market when you are starting out in business.
The size of the target market does not matter because we are so good that business keeps coming to us through word of mouth.
Knowing the size of your target market is essential for every business. You have to review your understanding of your target market at least once every few years.

If you agree with the first or the second statement you have a fixed mindset fuelled by the illusion that nothing changes and the market is the same as when you started in business. You would believe me when I say 2020 is different from 2019, yet may struggle to see the difference from the year you started in business.

If you agree with the first or the second statement and feel that after 10, 20, 50 or 70 years in business you no longer need to understand the size of your target market, then you are not alone.

You belong to the vast majority of business owners who are focused on the sole task of running a business day to day.

You are lucky, because you keep getting business without even knowing how large your target market really is.

If you think for a moment that this is just a New Zealand thing, think again. The world is full of businesses like yours, who would agree with one of these two first statements.

Why Does Knowing the Size of the Market Matter?

If you agree with the third statement, you have a growth mindset – well done!

By agreeing with the third statement, you are likely to have the desire to grow your business, and it’s likely that you’ve read a fair few business books.

Which ones?

Any. There must be hundreds of business books out there that say you have to understand your target market and have a fair idea about its size. This allows you to create better sales and marketing strategies and have a more realistic financial projection.

I treasure every connection with a person who has read these books and knows this fundamental of business. In over 20 years on New Zealand market, I’ve learnt that these people are far and few in between.

Wouldn’t you agree?

Do you feel that most business owners have read this in a book, or learnt it at University, or at some stage of their career?

I used to think this back in 2005 when we made the life changing decision to redirect the focus of our Art Studio to develop New Zealand’s largest business database. This would allow us, our clients, and anyone who needs it, to discover the size of the market available, and consequently how large their target market could be.

We thought we were building a tool for every B2B business. But it turned out that the fundamental idea about the value of knowing the size of one’s targets market, requires a lot more education.

Let me share a real-life story first, which happens more often than you might think – with some variations.

Imagine you have a product or service that is so specific, that there are only 10 companies in the whole country who you can target.

When you are not aware about the size of the market, then you will likely waste time and money by:

Printing 1000s of promotional material,
Hiring a team of sales professionals,
Arranging a call centre to set appointments,
Planning a Direct Marketing campaign,
Etc

When you are aware that there are only 10 companies that can ever possibly buy from you and that you have competition on top of that, you will conserve a lot of time, energy and money by acting smarter:

Reviewing your financial projections to understand if your business can survive if only one out of those 10 companies will buy from you … after 3 years of courting – because this is how it can easily go.
Re-thinking your value proposition and reviewing if there are other markets you can approach.
Innovating ways to WOW these 10 companies and the right people involved in decision making.
Investing a lot more time, effort and money to have one-on-one conversations with the right people. This is where corporate gifts or unusual direct mail is not an overkill, but is rather an essential part of getting your foot in the door.

Can you see how knowing the size of the market is 10 companies leads to a completely different set of actions and saves resources, time and money?

Fortunately, most businesses are in a better position. Even when your market is limited, you still have 100s or even 1,000s of companies you can target.

And that’s great!

The moral of “Why do you need to know the size of the market” is still the same, whether your target market is 10, 100, 1,000 companies or more. You can still waste resources when you are not aware of the actual size of the market. You might not get a precise figure because that’s challenging, but at least a reasonable figure that you can work with.

Read on to discover where and how you can get a better understanding of the size of your target market.

When you know the size of your target market, here is what you can do better:

Better forecasting. You and your accountant can make much more accurate financial projections, do realistic forecasting and project growth of your business based on more accurate raw data starting from size of the market, and your target market as you understand it.

Better budgeting. It goes without saying that when you are in control of numbers you can budget better. It all starts from how realistic your financial projections are based on market realities: size of the market + your historical ability to generate revenue + costs vs margin

Better marketing. The choice of marketing strategy and tactics depends on the actual size of the market. What’s the point in having a billboard or placing ads (any ads) targeting everyone when you only need to reach to a couple 100 or a couple 1000 of companies and people that are out there.

Better brand awareness. By knowing the size of your market, you can choose the best ways to build brand awareness with people who are directly involved in making purchasing decisions rather than to a random crowd who has no interest in your brand.

Better sales strategy. Even if you are a well-known and influential brand, you can only grow so far. Imagine that you currently service 10% of the local market, then you definitely can aspire to double sales. But what happens when you service 55% of the market? There is no way you can double your sales! In fact, you can barely grow in this situation and have to put serious thinking about making efforts in order to capture more of the market share vs exploring other locations or offering different products and services to your existing customer base.

Action time.

With all the valuable information you have so far, are you ready to take action and uncover the true size of your market?

If you already have a strong knowledge about what kind of companies you want to target, then you can submit an enquiry following this link right now and get an email with information about the size of your market based on your target market criteria.

If you are not quite sure how to define your target market – which is very common – then read along. You will get to know how to understand your target market better, so you can come close to this very important number: the size of your target market.

Ask and You Shall Receive

The size of your target market, is not hiding from you on purpose.

All your business has to do is ask for it.

FAIR WARNING. There is one challenge on the way.

You have to define your target market, otherwise sizing the market becomes mission impossible.

LITTLE KNOWN FACT: Most businesses find it really hard
to define their target market and choose
to leave this matter in the “too hard” basket!

Every day I get the chance to speak to at least one business which says exactly the same words: “Our target market is very hard to define, because we offer a highly specialised product/service”.

And every day, in response to that, 9 times out of 10 it only takes 15-20 minutes to define their target market at a reasonable level. Certainly, there is room for improvement but we have been able to uncover the base of who their target market is.

Guess what? My observation is that most people don’t know how to go about understanding their target market. While they can do it in 15-20 minutes with me or one of our data consultants, they certainly need hours doing it on their own.

You may have heard from other marketers that identifying your target market is a matter of careful research and various considerations.

While this is true and you can invest a hefty sum in market research, the idea about the usefulness of focus groups, and other types of research originates in business to consumer (B2C) marketing.

When it comes to business to business (B2B) marketing, education, socio-economic parameters and even gender plays less of a role in the way companies go about their purchasing decisions.

Think about when a company imports tools and consumables for hairdressers, then that means that the hairdressing industry is their ideal target market. Full stop and no questions asked.

Then, of course one can look into products more carefully to assess if beauty, medical and some other industries may benefit as well. They may be useful to be included in their target market, but definitely only as a second choice, right?

Over the years we’ve created a lot of useful resources to help you define your target market. I’m not inviting you to do any heavy lifting of trying to estimate the size.

I’m merely asking you to decide for yourself: who do you want to target?

Then leave us do the rest.

Take a few minutes out of your busy day to specify who you want to sell to. From there we will help you to get an assessment of the size of your market.

Here is how.

Download a simple two page crash course on defining your target market the right way.

It will prompt you to answer a handful questions on two pages, and then get ready to enquire about the size of your target market by following this link. In our experience, this is a great activity to do with your sales and marketing team to make sure their feedback and opinions count.

If you feel that this two page crash course is a it too brief to your liking, you can download ANZSIC 850 industry types from here and go over the whole list. While it will take a bit of time, it will also allow you to define your target market at a deeper level. Allowing you to get a more precise, and ultimately a more accurate sizing of your target market.

What about the size of the market?

While this article is about identifying the size of your target market, it’s not possible to measure the size until you understand what is your target market.

That is why the whole previous part was about identifying your B2B target market, along with the tools we have to help you get going.

If you don’t understand what kind of businesses are in your target market, how can anyone even start thinking about the size. Because there is nothing to measure, isn’t it?

Once you know the type of companies you want to target, then we can help.

As suggested earlier, all you need to do is to submit an enquiry following this link to the whoiswhere team and we would be delighted to identify the size of the market list that we can offer. The larger the companies you want to connect to, the more chances that we can offer you; as much as 94% of New Zealand market. Of course, there is less data for smaller businesses.

Is there a better way to identify the size of your target market?

It would be unfair of us to claim that whoiswhere™ is the only place you can get an idea about the size of your market. There are other ways to establish it as well.

The important thing is to be clear about what the limitations are for the source you are using.

Here are some alternative suggestions where you can source your market size, which you might want to examine, and a brief description of limitation of each source.

New Zealand Companies Register

This is the most official resource when it comes to New Zealand business’s. It lists every registered company, trust and incorporated society in New Zealand and is updated daily.

Did you know there is an average of 4,000 new companies registered in NZ every month?

The limitations of the Companies Register that nobody is talking about:

There is no legal requirement to register a company in New Zealand, so you can be in business and employ staff, without even being registered.

The implication of this limitation is that not every business can be found in the Companies Register. Some would argue that every serious business is registered, we have facts and figures to show that this is not true. There are plenty of well-established companies that trade without being a registered entity.

And there is at least one whole industry in New Zealand where hardly anyone is registered.
The other limitation is that the entities listed in the Companies Registry might be not actively trading even when they are active. There is absolutely no way to establish if a company is actually operating by checking the register.
Most companies don’t have any additional information about what industry they operate in, or how large the company is. There is now an option to voluntarily share this information. However, from what we have understood the number of companies who have shared any kind of additional information stands at about 10%.

Last but not least, and the most disappointing of all, is that most entities listed do not have a phone number or other ways to reach out to them. In fact, there is very little information listed for the majority of companies apart from who owns them.

You might ask, but what about the registered address?

Great observation.

Often the registered address is the address of an accounting or legal firm, which completed the registration and has nothing to do with the actual company.

In fact, it could be in a different city, or even a different island (for example, an Auckland company can be registered by an accounting firm in Timaru).

If it is an address of one of the Directors, then it’s usually a residential address and also has little to do with the location business is operating from.

In conclusion, the Companies Register is a fantastic tool to find if the company is in liquidation, check how many years it has been in business, or check the spelling of a Directors name. But beyond that, it absolutely cannot help you size the market.

In fact, even using the total number of registered companies (around 500K) as an indication of the total size of New Zealand market is not possible, because according to our research over 50% of them are not individual trading participants in the market. They’re family trusts, property trusts, and other 0-employee holding companies.

StatsNZ

The source of official New Zealand data. StatsNZ produces a lot of useful information that every business can benefit from. It’s official. It’s current. It’s based on the best statistics and information that you can get hold of.

The limitations of StatsNZ that nobody is talking about:

It is statistics, i.e. it’s accurate on a nationwide level.

So when an accountant in Timaru registers a company operating in Auckland, from a statistical view point this company is counted as a business in Timaru.

This happens more than you might think, and affects the results of you market size if you are interested in a particular location.

Another example is 1000+ businesses counted against the address 105 The Terrace, Wellington. No, you didn’t miss the largest building in NZ with hosts 1000+ companies. This is the net effect of a legal firm which has registered over 1000 companies – with the registered office as 105 The Terrace.
Part of statistics is to use the industry classification to understand the market. Assigning an industry to a company or other entity is an interesting and somewhat blurry process, which might require additional work to understand.

Reach out to me directly if you want to know more about the relationship between statistics and real life. You really have to understand the source of StatsNZ information to make sure your conclusions are relevant to the reality of businesses you can identify and trade with.

Statistical data does not go down to the micro level of individual business, so it might be all good and well to establish the size of your target market, and then what? There is no way to identify who these companies are.

Bottom line? StatsNZ is a much better source of information than the Companies Register to help you size the target market.

The biggest downside?

It does not provide you with actual details of the companies in your target market. And let’s face it, understanding the size of your market is very important. Once you know it, the next logical step is to find out who they are!

Business Databases

There are a number of databases in New Zealand and we have an overview of what they are, how much information each one provides, and how to understand which ones will be a good fit for your project.

Find out How to Choose a NZ B2B Business list here.

The limitations of Business Databases that nobody is talking about:

Most databases don’t even tell you what they are doing to ensure that they have a good market coverage. This means any number of businesses, in any niche they have, are hard to understand in relation to 100% of the market.

For me this is the fundamental challenge of any business database.

What is the relation to 100%?

Because if I don’t know the relation to 100% then what is the value of any list.

Over the years I discovered that many business owners are not worried about it.

Until they want to grow. Or until their overseas head office wants to assess the potential of the market.

If you were ever in a position to understand the true size of your target market in New Zealand, you would know that it’s a hard and un-rewarding job. Mainly because there is no one to turn to for the answers.

In reality though, that’s a lie. In 2005 we recognised this problem, and established the whoiswhere business database in an attempt to record all businesses based in commercial premises. The aim is to get as close to 100% of all businesses based in commercial premises as possible.

Yes, this does not cover all businesses in New Zealand.

Yes, not every business in commercial premises has signage, and without the signage they are invisible to the world and to our street walkers.

Yes, some signage in New Zealand is in a foreign language and we can’t always capture it.

But, despite all of this, whoiswhere is the only database in NZ and Australia, which is focused on getting to know every business in commercial premises.

We are doing this expensive and labour intensive work to be able to say, we know more commercially located businesses in New Zealand than anyone else. Yes, it’s not 100%, but it’s as close as we – or any other database – can possibly get it.

This is the reason why we typically have 40-60% more businesses than any other business database provider.

Many business databases do not distinguish between a head office and a branch of the company. That effectively inflates the numbers, doesn’t it?

Let me explain: there is only one true head office for the Warehouse, Fonterra, McDonalds, etc.

I bet you wouldn’t be impressed if between the three companies above, you only found 300 contacts … not unless you specifically need that small number of contacts for whichever reason.

Can you imagine how inflated those numbers could be if 300 various business addresses were counted instead of 3 overriding companies?
Business databases are maintained differently. To ensure the accuracy of data you are receiving, you’d better check what the database maintenance routine is first.

The bottom line is that business databases are a really valuable source of information (that is hopefully accurate enough!) about the exact businesses in your target market.

They can also provide an indication of the size of your market, which you then can compare with StatsNZ to ascertain if you are getting access to sufficient percentage of the market.

Does that all make sense? Are you ready to take action?

Lets get going and use one of the links throughout this article.

Once you’re ready to gain access to best size of your target market, get in touch by emailing assia@whoiswhere.co.nz

Assia Salikhova, Managing Director, E-ideas Ltd

Boutique B2B Marketing Implementation Agency

www.e-ideas.co.nz
www.whoiswhere.co.nz

DDI +64 4 973 4949
M +64 27 231 8631

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Where to Put All Your Eggs into One Basket to Skyrocket Your Business

siteadmin — Sat, 15 Jun 2019 02:41:06 +0000

While putting all your eggs in one basket is a road to failure in many forms of investments, when it comes to your own business it’s not always a problem. In fact if you diversify parts of your business it could become far more expensive than if you just stuck to one thing.

This may sound like a shock to many, so let me explain, because it’s actually quite a simple idea that you probably practice yourself. Let’s get straight to the point.

Every dollar left in the business and used to purchase equipment, advertising, business/marketing advice, legal help, pay your staff etc, is technically an investment. Isn’t it? So as a business owner you have control over where to invest your money between all the areas which might need extra cash. Balancing which part of the business to invest in is an art and a science in its own right. Your accountant and your board of directors will be able to help with this.

This article is about something more important, which is better illustrated with an example.

Imagine you want to purchase (or rather, invest in) new equipment. You go to the market and review your options, then make a decision based on many factors.

What if you later decide you need two pieces of equipment? After all the hard work you did choosing your last machine, chances are you will get a second one from the same place without being anywhere near as diligent as the first time round.

And that’s understandable, why would you get both pieces of equipment from two different brands? Most of the time it makes no sense. Two different brands, means two different types of equipment, your people have to be trained twice, you have to deal with two lots of support personnel, you also might end up paying more for servicing two machines by two different companies. In one word: extra overheads which are impossible to justify in most cases.

Same goes for computers, software, etc.

What about business advise? Consultancy, coaching, marketing, etc.

It used to be in vogue to have your marketing taken care of by five different companies. You’d have someone for your website, someone for SEO, a third for digital, another for content, and a final one who did your strategy before everyone else came on the scene.

This may sound like you’re getting the best of every individuals skillsets. But the reality is far from this. It’s a case of you can have every piece optimised but the final product fails to deliver results.

If you look at this as diversifying your investment – i.e. choosing to not put all your eggs in one basket, then you will get the following very poor and rather costly results:

New or existing brand is not applied or not even used on the new shiny website, even the colour scheme could be different
Website message differs from Adwords, because the keywords analysis was not taken into consideration at all during website creation
Website content has no correlation to SEO and keywords analysis because the copywriter didn’t consider this
Sales script is way different from website message and from product description in the brochure
Ad hoc advertising in calendars or in print is completely different from the brand, website and social media
And social media paints the business as a completely different entity
Lastly the marketing strategy, especially when done by an outside consultant, is suggesting something completely different again, which is often ignored and not implemented because it’s been forgotten, was too costly or not important enough to be done.

It’s unlikely that a company would have all of the above going on at once, but it does happen. Often times there are at least a couple of the above in every business.

This is an observation only and a sad one at that because in an attempt to avoid jacks-of-all-trades, businesses end up working with highly specialised professionals who aren’t always able to act holistically with respect to everyone else. Business owners have a choice with how to deal with this:

Either stay strong and use one document, a marketing strategy, as the foundation for everything that will get done by other specialists
Do business as usual, spread their eggs in many baskets and settle for a varied and sometimes inconsistent representation of their company in different channels
Find a generalist with ideas and values aligned with their own, choose to keep all their eggs in one basket for the sake of consistent representation of the company, a consistent message, and well-orchestrated marketing effort. Then reap the rewards which only a consistent message can deliver.

Maybe I’m preaching to the converted, but that’s not what we witness on a daily basis.

We ourselves aren’t perfect at doing this, but we understand the challenge and are working to be better every time we do marketing for ourselves. We are working on a new message about us.

This message will be based on the fact that we are generalists representing holistic, action-oriented marketing fundamentals. Which are handpicked for each company based on their current position. Yes, we cover all of the below and actually more to ensure your company has a consistent voice, consistent representation, and the same tested powerful message.

Target
Connect
Follow Up
Support Sale

If you want to learn more, book in a no obligation consult with one of our specialists.

The post Where to Put All Your Eggs into One Basket to Skyrocket Your Business appeared first on whoiswhere.

3 Basic Steps to Secure and Grow Your Business Relationships

siteadmin — Thu, 02 Aug 2018 00:23:00 +0000

It’s about time we all admit that doing business is nothing more than an ongoing relationship building exercise. When you are in business, there is nothing more important than relationship building. And there are plenty of relationships to keep alive: relationships with your team, your suppliers, your customers, and of course with your family, and friends. Countless times the quality of these relationships determine if you make or break it in business.

Creating and nurturing relationships can be a pleasure or a chore. But one thing is certain: growing your business relationships is one of the keys to achieving business success.

1. Keep in touch

This is as basic it gets – relationships become stronger when you stay in touch. Surprisingly, the rapid growth of technology has made the situation worse. Do you recall times when salespeople used to send follow up thank you cards for years after major purchases? Nowadays many don’t even stay in touch via email.

Standing out from the crowd becomes remarkably simple: keep in touch, even if it’s only via a bi-weekly email.

2. Add value

Another text book step not followed often enough. Every business has a lot to share with others. Way too often we forget that things that are simple for us internally could be big news and a real revelation for others, adding value to their business, knowledge, perhaps even changing lives.

So while you’re keeping in touch above, make sure to add value by creating content that shares your insider business knowledge where appropriate.

3. Proactively make new contacts

Having good relationships with your suppliers and customers is great, but this really isn’t enough. Because when you want to grow your business you have to step up and find ways to meet new people and build new relationships, without necessarily for the purpose of making a quick sale.

While there are many ways to meet business people, the two most common ones are networking and a direct approach through mail, phone, email, or social media (LinkedIn). I personally believe in the human touch and a personal introduction on the phone seems to be the most human and respectful way to start a business relationship. Creating a habit of contacting just 5 new business owners a day is all but guaranteed to make your business a success.

This is because sooner or later you’ll connect with someone who needs your service today. And for everyone else – they will know you and your business. If you follow the first step and keep in touch with them, then when the time is right they will remember you and come to you.

Following these three steps will ensure you keep your current list of contacts connected, engage new prospects with valuable content, and create a long-term strategy for adding new relationships to your network.

Every business owner is capable of doing the above three steps, they are simple, straightforward and easy to execute. The only thing stopping you now is time, and if you find yourself short on time – you can buy some of our time to do it for you. If you’re interested, reach out and we can do all of the above and more for you.

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Data MythBusters: Role-Based Generic Emails in the New Zealand Market

siteadmin — Mon, 18 Jun 2018 02:53:00 +0000

We are often asked to deliver emails as part of our business lists and inevitably we end up having a discussion about role-based business emails and their place in our data as a legitimate method of contacting a business.

When you’re wanting to run a cold email marketing campaign, it might seem obvious to only want to email to personal emails. The logic is very basic here – a personal email goes to a specific person. However the not so obvious thing is that a lot of smaller businesses don’t have personal emails.

The reality on the market in NZ is that because so many businesses are small and have less than 5 staff, it’s very common for a generic email address to be used by the owner. In many businesses with 5 staff or less, a generic email is used as the main business email. And as the vast majority of companies in NZ have 5 or less staff. So we are faced with a world where role-based emails must be used for marketing purposes.

This isn’t to say that every small company uses a role-based email as the main email. It’s simply pointing out the fact that there is a large percentage where this is the case. And it’s a percentage that is simply too big to discount.

Unfortunately companies like Mailchimp have chosen to take a hard stance against these types of email addresses. Mailchimp will reject any email you try to import if it’s a generic or role-based one, and that gets very frustrating if you have clients who may have been purchasing for years from you using an info@ email. Fortunately not all companies are so short-sighted and there are other email marketing programs which will let you add in generic emails for your campaigns.

So the next time you consider purchasing an email list, reconsider discounting role-based emails. And if you’re not quite sure where to begin – drop us a line or give us a call. We’re in a privileged spot to see what companies are doing and what is working. And we’re happy to share this knowledge with you before you plow money into emails that might not even work for you.

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