Understanding your total addressable market (TAM) is crucial for the growth of your business. It helps to determine the size and scope of your potential customer base and allows you to set realistic goals and objectives. It also aids with making informed decisions about marketing and product development strategies as well as pricing and distribution.
Defining your market today and understanding where your opportunities lie in the future helps your team focus on the right customers and competitors at the right time.
An economic downturn can make this exercise difficult. Inflation, rising costs, global conflicts, and the still-felt effects of the pandemic have led to budget reallocations and cuts.
Luckily, there are actions you can take today to grow your market and your business.
Become More Visible
When economic times are hard and budgets are tight, the gut reaction of many companies is to slash advertising spend. But reducing ad spend is associated with declining sales and weakened performance in the long run.
We are moving into the next era of digital business. Maintaining a prioritized investment in marketing will separate out the market leaders from the rest of the pack.
Laurie Buczek, Vice President, CMO Advisory Practice, IDC
Try to maintain your share of voice by using affordable online advertising like Pay per Click (PPC) and display as well as social ads, and include some of these strategies to increase visibility when budgets are tight:
- Develop a strong digital presence by optimizing your website and social media accounts.
- Use Search Engine Optimization (SEO) to optimize your website and online content to rank higher in search engine results.
- Leverage social media. Platforms like LinkedIn, Instagram, and Facebook can help you reach a wider audience and increase brand awareness.
- Build your relationship with existing consumers through relevant and impactful messaging and thought leadership. Third-party content, for example, analyst briefs and whitepapers, will establish you as a leader in your field and give you instant credibility.
- Network with other businesses at industry events and local business associations to expand your reach.
Even though the first instinctive action in an economic downturn often is to cut spending, this can be a flawed approach. Now more than ever you should take a data-driven approach to understanding your customer.
Connecting with consumers in an empathetic and insight-driven way is key. Buyers want to see the impact your products or services are making on their business.
Take these steps to better understand your customer:
- Analyze your data: Analyzing customer data such as purchase history, demographics, and online behaviors can help you gain insight into your customers’ preferences. This can help you identify trends and patterns that can allow you to tailor marketing activities to different segments.
- Create buyer personas: By creating personas, you can better understand your customers’ needs, preferences, and behaviors, and tailor your marketing, sales, and tone of voice accordingly.
- Use customer feedback: Feedback can easily be gathered through surveys, reviews, or customer support, and will help you to improve your products and services and address any issues or concerns.
Use Data to Investigate New Markets
If your current market is saturated or unable to commit to purchasing, it’s a good idea to branch out to other markets or regions, or even demographics to remain competitive.
When Walmart founder Sam Walton was asked what he thought about the recession, he famously said “I thought about it and decided not to take part.”
If you, like Mr. Walton, want to outsmart the potential recession, you should use a data-driven approach to research potential markets and define your new niche instead of trying to compete with everyone in your current market to stand out and appeal to a more specific audience.
Then, analyze customer behavior to understand how potential customers in the new market currently behave, what products or services they already use, and what factors influence their decision-making process.
Finally, develop a market entry strategy based on the insights you have gathered, and remember to stay focused on your goals, continually improve your offerings, and differentiate yourself from your competitors.
Leverage Digital Marketing
During an economic downturn, many businesses rely more than ever on digital marketing to reach a larger audience and increase their TAM at an affordable price. IDC’s Marketing Investment Planner for 2023 identified digital as the predominant type of programming, with display ads at its highest spend over the past 11 years.
Advances in emerging technologies like artificial intelligence (AI) and the shift of the consumerization of B2B buyer behavior have heightened the need to move beyond the classic marketing playbook of database and email marketing. Budgets for content syndication, search engine marketing (SEM), and building customer intelligence and analytics have grown, and the marketing mix has shifted towards the digital-first buyer.
Your digital playbook could include some of these strategies:
- Use social media and assets like IDC’s social tile to reach a larger audience to expand your TAM, drive brand awareness, and attract new customers.
- Optimize your website or organic search with search engine marketing (SEM) techniques like keyword research, content optimization, and link building. This can help to broaden your TAM by driving more organic search traffic to your website.
- Use visually attractive assets like videos to generate new leads and stand out from the competition.
While you can’t change the fact that some consumers are tightening their purse strings, you do have a choice about how to pivot your business accordingly. In fact, with proper planning, resource allocation, and strategy shifts, smart brands not only can stay afloat during turbulent times but can increase their market share.
Partnering with the right analyst firm can help you reach your goals in a much shorter time and within budget. Find out how IDC’s Emerging Vendor Solutions will help you grow your business today.