You transformed your business idea into a full-fledged business, and you’ve seen some impressive initial growth. But maybe you’ve seen hints that sales are leveling off. That those couple of slower days from last month are now becoming more consistent. You’re still running a successful business, but to keep sales from flattening out over time, one of the best things you can do is start looking at other target markets—maybe even internationally.
When things are going pretty well, it’s tempting to just be a creature of habit—to rest on the patterns you’ve created that have served your business so far. Maybe your goal is to persist in the long term as a healthy, stable mid-size or small business. Maybe it’s to become an international household name.
Either way, doing market research on your existing customer demographic, as well as potential new markets, can help you set your product (or service) development strategy and to inform how you model different growth scenarios with your sales forecast.
If your mission is to scale your business and to pursue more aggressive growth goals, doing industry and market research will set you up for success.
How to develop a nimble growth strategy
As you strive onward and upward, and your company begins to expand, you need to be flexibile. Success comes from the ability to fluidly adjust your business plan to any new opportunity or emerging threat. One way to assess those opportunities and threats is to do a SWOT analysis. Having thought through all aspects of your business will be a good foundation for quality market research and vice versa.
I launched finder.com over ten years ago in Australia, and the company has since become the country’s number one comparison site, comparing anything from business loans and money transfers, to travel insurance and shopping coupons.
We expanded into the U.S. as our first overseas venture, then more recently, the U.K. (we won’t be stopping there, though!). These countries are all English-speaking, but the similarities end there. The learning curve was steep.
This is where doing your research comes in. Whether you already have a successful idea and are looking to branch out globally, or are wondering how to research your market, these are some of the methods I’ve learned along the way.
1. Define the problem your business solves and your goals
Defining what your service will offer in the new market, as well as your goals is the best place to start. You can do this using a simple Lean Plan and can download the template here for free. Or check out LivePlan to create a plan that grows with you. Either option is a far better alternative to a business model canvas if you’ve ever used that framework.
What problem are you aiming to solve?
This will generally be the same no matter where you attempt to expand. At finder, we offer the same thing across all countries: a comparison tool to help people make better-informed decisions.
Our goal? To become number one. Isn’t that every company’s dream?
2. Research and collect data
Primary market research tactics
From there, you can look into the different ways of gathering raw data on the new market. Some primary market research tactics might include surveys or focus groups including people in your target demographic to see how they respond to your product.
At finder, in the very early stages, we start with a skeleton or very basic, minimum viable product (MVP) website. That way, we can see which section of our site users click to and how many visit, to see if it’s worth expanding into.
We have skeleton sites all across the globe, gathering data from Belgium to South Africa. But this only works well for us because we’re offering a digital product—a physical one would do better taking a different route.
Secondary market research tactics
Trade associations, government information, and third-party research sites and online tools, both free and paid, can be helpful in secondary market research resources.
Some examples of free options are Google’s Marketer’s Almanac, which provides information on consumer browsing behavior, and Business Dynamic Statistics, which analyzes census data. The paid options tend to offer more detailed data. Userlytics is a great platform for user testing, while Survata is helpful when putting out surveys.
Of course, the software you choose can depend on the country you’re expanding into. We use different survey software, for example, when we’re gathering data for U.K. versus U.S. enterprises.
You might also consider acquiring industry benchmark data, especially if you’re considering international expansion.
Don’t drown in the raw data
Chances are, you’re going to end up with a lot of raw data from whatever method of research you undertake. And it’s easy to get lost in misleading numbers or stats as you try to make sense of it all. So, before going any further, organize it into a spreadsheet.
Excel is the most obvious choice here, but there are other, lesser-known software options, like SPSS Statistics or Minitab. Run summaries, create graphs and tables, break it down by gender, age, and whatever else is appropriate, and analyze it for trends. Once it’s all together, you can easily present it to the rest of your team and see where to go from there.
3. Deepen your research using your preliminary findings
So your company has set its sights on a specific demographic, industry or country. Now is the time for more in-depth research. It also pays to document every part of your process clearly, so you can come back and reuse (or refine) your process again if you decide to tackle a different market.
Your preliminary research should be different from your in-depth study. You have a few options here, but I’ve found that using a mixture of tools tends to work better than just using one. The online tools mentioned above can help gain more in-depth knowledge, but this is where you shift gears a bit. Instead of relying on data and the internet, it’s time to get a proper feel for your new market directly.
There’s no better way to do this than visiting and interacting with your new audience. If it’s in a new country, I would recommend traveling there at least twice before setting up. Plan ahead and fill your time productively.
I ended up going to the U.S. three times so I could be on the ground and get a real feel for the place before launching. I looked into where to set up, which meant researching the areas that attracted the best talent. I also gained an understanding of the local news—how it differed from Australia and what stories were attractive—and could see first-hand where we might run into issues. And, of course, let’s not forget the importance of networking.
Making contacts in the industry, market, or country you wish to launch is invaluable. From wherever you’re based, you can use LinkedIn to connect with people in that industry, or even business owners, and build a relationship from there. Then, when you land, you already have the bare bones of a network. Something as simple as buying someone a coffee can provide a huge return on investment.
4. Learn about your competitors
Chances are, there’s already going to be an established company you’ll be competing with during and after you expand.
This is where competitor analysis comes in. You can learn a lot by keeping a close eye on your competitors, seeing what they do well and what they don’t. Perhaps you can come in and do something they tried, but better.
It’s easier to map this using a competitive matrix to understand how you compare and to identify your competitors’ vulnerabilities and strengths.
Start by identifying your top three competitors and go from there. Analysis can always be purchased, but it is possible to do it yourself.
Common questions about your competitors that you need to answer
- What is their range of products or services?
- What is their target audience compared to mine?
- What are the positives and negatives, from the point of view of their consumers?
- What is their competitive advantage?
- What is their marketing and promotional strategy?
- What percentage of the market share do they control?
- What is their company structure like? Are they growing?
But, how do you get this information? Gather all you can about these companies. Look at where they advertise and what products they feature, set up a Google Alert to track their media mentions, see if they’re mentioned in any databases. If they’re a publicly held company, you can find annual reports.
It can even be as simple as talking to an employee at a convention or event, though by no means should you ever use an alias or be dishonest to gather this information.
5. Make mistakes and adjust
You won’t get it perfect the first time. Probably not even the third, fourth, or even tenth time. Each country is different, so prepare to bumble along at times. Remember that each mistake is the opportunity for new learning, and if you’re not making mistakes you’re not trying hard enough.
At finder, we consider ourselves very knowledgeable about personal finance, which includes money transfers. We have entire pages on it.
Yet, even we make mistakes. For example, when launching in the U.K., we outsourced work to a lot of freelancers around the globe to get things up and running. When payment time came around, we lost a lot of money to wire transfers and were hit by terrible currency exchange rates. As we’d used these options before, we had thought they were the most convenient.
In hindsight, we should’ve taken the time to research and switch to a better provider. Indeed, when we conducted a study of money transfers, we found that banks charge a higher fee than the global average when transferring money across borders.
Use your research to inform your business plan
Use what you learn from your market research to develop a more nimble business plan that guides your strategic growth. Start modeling different sales projections, using what you know about customer demand and competition.
But don’t just stop there. Make doing market research an ongoing part of your process. And review your Lean Business Plan, especially the financials, monthly, so you’re able to identify opportunities and weaknesses quickly.
Entering into a new country is all new territory. Take eBay, for example. They tried to expand into China and failed miserably, relying too heavily on their strong brand name. Yet when they tried again with a different approach, forming a partnership with a local company, they had more success. It’s a learning process—everything won’t go smoothly at first.
According to a British Chambers of Commerce survey, 55 percent of businesses saw a positive impact on their bottom line within 12 months of expanding internationally. It may be difficult at first, but it’s impossible for me to regret taking finder global. And if you approach any expansion with a plan, you’ll likely feel the same.
Editors’ Note: This article was originally published in 2017 and updated for 2020.