An interesting Harvard Business Review report called ‘Selling into Micromarkets’ reviews a strategy that businesses can use to increase sales.
The central example is a chemicals and services company which doubled its sales growth within a year by splitting its existing markets into 70 micromarkets. It used big data to discover the sales potential of different micromarkets, before moving resources away from areas with poor potential and into high-growth spots.
The same publication called micromarket strategy perhaps the “most potent new application of big-data analytics in B2B sales”.
Key to opening up lucrative micromarkets is having access to a good source of data. This article will detail how you can start a micromarket strategy of your own using Red Flag Alert data.
What are Micromarkets?
In order to create micromarkets, a business must split its existing sales territories into smaller regions. These micromarkets provide the opportunity for organisations to find small pockets of growth from within their existing sales territories.
The first step is to define the best way to split sales territories into micromarkets. A building products company may base the micromarkets on physical location relative to its sales teams. An airline may base this on its flight routes. The ideal size of micromarkets will take into consideration the company’s goals and resources. Each business can look at its unique situation to split its markets up in a way that makes the most sense.
Once these micromarkets have been defined, sales managers need to discover what drives the spending of businesses in each region. By doing so, companies can determine which micromarkets are most likely to grow in the future.
Once a business has identified these high-value areas, it needs to look at the company’s existing market share in each area. If the business has a low market share in a high-value micromarket, it will need to look for reasons that could explain why.
Each micromarket is likely to have some differences. These differences can be seen in a business’s own dataset and in external data like Red Flag Alert’s – combining varied datasets provides the best overview.
A small, but high-ticket B2B enterprise software business that is struggling in one region may find prospects that are growing very fast but that typically use big blue-chip software providers – the sales and marketing strategy in this valuable area may centre on demonstrating why its service is superior to larger competitors.
If the reasons are easy to fix, such as low marketing spend or low sales rep coverage, managers can choose to prioritise these markets. On the other hand, if the reason for the low market share in a high-value area is more difficult to fix, such as competitors with lower pricing, they may want to focus on other areas.
How to Use Red Flag Alert to Build Micromarket Data
If you want to use micromarkets to drive your sales strategy, you’ll need a good source of data. Red Flag Alert can help you with the following parts of your micromarket strategy.
Define Your Micromarkets
Red Flag Alert data can be used to build customer profiles based on trends within your existing customer base. These profiles can show exactly the type of customer that is likely to buy from you.
For example, you may find that many of your customers have over a certain number of employees, operate in certain industries, or have strong liquidity. By combining all these trends into one profile, you can gain a good idea of the type of company that is likely to buy from you.
You may also notice the companies that buy your product can be split into several distinct groups. In this case, you can build a customer profile for each one.
Use the Data to Find High-Value Companies in Certain Areas
Red Flag Alert’s data can be filtered by location. By doing this, you can see how many businesses that fit your customer profile exist within certain areas.
Once you have this information you can begin to look at not only the number of potential leads in each micromarket, but also the quality of these leads. By working out your existing market share in each area, you can see the overall growth potential of each market.
Managers can then begin to allocate sales resources to these high-value areas. If an area has a lot of growth potential, the business can allocate more reps. In areas where the business already has a high market share, it can prioritise reps with good account management skills.
Create Sales Strategies and Support the Sales Force
After you have defined your micromarkets, you can group them into categories that share similar characteristics. Then you can create strategies for each group, for example, pricing or messaging.
Going back to the earlier example of a high-ticket B2B enterprise software business, they may compete with blue-chip clients by creating comparison documents or case studies that detail how their service differs from their larger competitors. Additionally, they may be bolder and use direct mail that asks if they are sick of the incumbent and offer a free switch over. The point is that by understanding the dynamics of the micromarket, highly specific tactics can be put in place.
Use Red Flag Alert to Build Micromarkets and Supercharge Sales
Red Flag Alert provides in-depth data that can supercharge your sales. The data is:
- Comprehensive: It covers every business in the UK.
- Detailed: The data covers all parts of a business, including in-depth financial information.
- Up to date: With data from ten leading sources, we update our database on daily basis with over 100,000 business changes, that’s 2M a month and 24 Million changes a year.
- Searchable: It is easy to search and filter Red Flag Alert data based on any number of criteria.
To find out more about how Red Flag Alert data can be used in your sales team, set up a consultation with Richard West on 0344 412 6699 or firstname.lastname@example.org.