market expansion into new locations is a logical way to grow your business
because it allows you to scale your existing competencies by getting in
front of a new audience there are just too many costly mistakes
and missed opportunities at risk I'm Katie Katz and together in
association with SEMrush I'm going to walk you through the key
steps to consider before making the choice to expand into a new market
now before you start this process make sure you understand
product market fit in your own market this is critical before you can even
think about expanding into a new one ask yourself does your offering
genuinely satisfy a strong consumer demand what
can you learn from your current buyer's journey
are there any preferences behaviors pain points and goals
that are unique to your particular culture or region
you can bet that there are although that we live
in an increasingly global economy our world is defined by its diverse
populations with unique histories cultural beliefs languages the list goes
on these are in addition to differing
physical factors of each region for example germany has a strong gdp and
great spending power but if you are a surfboard manufacturer
looking to break out of the u.s you'd probably be better off looking at
a country like australia first since oceans are in short supply in
germany that is of course a simplified example
but market evaluation will help to guard you against expanding into any other
region in which you are not yet active simply
for the sake of it all right step one define your
evaluation criteria with a global mindset
i always like to say you can never be too organized
and any expansion plan should include well a plan
there are a lot of tried and true options for market evaluation
once you know that you have a dynamic product or service that sells and you've
nailed your message strategy in your existing market you're ready to
start your evaluations keep in mind that every region and
culture has unique opportunities and defining factors
but here are a few things that you shouldn't leave out of your evaluation
process is your business needed in the market
what is the level of competition what is the consumer spending threshold
are the benefits and pain points the same or different
what value add are you bringing to the table
once you know what you're looking for you can begin to research
which brings us to step two analyze internal data
for consumer behavior and funnel activity a great place to start your
data analysis is your own backyard use the tools you
already have in place to mine your own data for insights into
new market viability do you see a surge in leads from a
particular market despite not having heavily invested there
do you see a shorter sales cycle or a higher win rate in some countries
is the average purchase price higher in any given market
you can interview your sales and marketing team and check for preferred
analytics in your platform geo data most platforms
track traffic distribution by location so you can see
the what where when and why a lot of traffic
coming from one country coupled with encouraging engagement
metrics and lots of conversions might indicate that a market is hungry
for your expansion so number three research your
competitors top markets imagine you have a payment technology
platform and are competing against companies such as square
based on the geo distribution stats in sem rush's traffic analytics
you can quickly understand where your main competitor has a notable presence
the data on the screen shows square is performing strongly
in the us canada japan australia and the uk when you take a look at the
engagement metrics to see if those who come to square's
website are equally engaged around the world
some interesting insights emerge which brings us to
number four which is the competitive landscape
you can take your competitive research a step further
with a thorough understanding of where existing competitors fall
in the existing landscape semrush has a great tool for this in the market
explorer section called the growth quadrant
here is what a landscape looks like continuing with our example of square in
japan as the target you can see that square is a niche
player in japan with several regional competitors
among these you will see a local accounting software company named
free positioned as leader at this point you may wonder what free is doing better
than everyone else in this market you can dig into this by using the same
market explorer tool to analyze their traffic generation
and social media distribution strategies compared to market averages
further investigation could give you great insight into the tactics they
employ to attract and engage customers in this market you should also
pay attention to the game changers the companies in the upper left corner
may not have a great deal of traffic right now
but you can see that their traffic growth is higher than that of square
you will want to make note of these companies and their market potential
to help you identify your own potential opportunities in the future
but knowing the competitive information is just the first step
now you need to assess viability saturation and opportunity
so let's dive a little deeper into what that looks like with step five
estimating the potential market size you will obviously want to enter a
market that has the most significant opportunities for your business
so you need to know how to assess the market size google has a great tool
called market finder if you enter a domain it provides information about the
regional searches and automatically suggests categories
associated with the url for squareup.com it suggests e-commerce
and several more you can adjust those categories to the
ones that better reflect your business select the detailed research option for
a more comprehensive list of countries that you're considering operating now
you can assess each market for a variety of factors
including demographics search volume cost per click etc keep in
mind that this is just data for google however
and you may need to take other search engines into consideration depending on
the market that you're entering all right number six assess the
difficulty of doing business in the target country this information
is also accessible in google market finder in the third column
continuing with our square example japan ranks 29th out of 190 when it comes to
the relative ease of doing business there
there may be some friction here for some new entrants into the market
it's one thing to have a viable product but it's another finding customers who
are willing to pay for it in google market finder you will notice
the average household disposable income in japan
is much lower than in other markets such as the uk
or australia in this instance you would need to check the oecd data
or the oecd better life index to get a better understanding
of how japan's level of disposable income might affect your ability to
succeed in that market number seven complete a market
assessment decision matrix it's time to put pen to paper and assess
what you know expanding into a new market obviously
requires plenty of research to develop a solid plan
lucky for you sem rush built a very easy to use matrix that they share for free
click the link right here to make a copy for yourself
this matrix is a convenient way to gather all the relevant metrics in one
place to identify which country receives the
highest score and could have the most potential
dig into all of the steps we've already discussed
along with your regular marketing benchmarks to build out a comprehensive
picture of your market opportunities don't
forget to look at website performance keyword trends
domestic competitor performance and traffic volume you can use this data
to inform your strategy when it comes to identifying your target market and
benchmarking yourself against your core competitors
to ensure your readiness to launch now you're ready for step eight
use your data to take over the world in the past compiling and analyzing all
this data would have proven challenging if not impossible on your own today
however there are many market assessment tools at our fingertips to make the
process more accessible and insightful than ever
before by following the steps outlined here
you can start devising a detailed plan for expanding into the markets that will
be most effective and rewarding for your business
we hope you enjoyed this guide let us know about your experiences
of researching and entering new markets in the comments below