Which Escalator Are You Riding?
By John Lenker | Updated 28 May 2014
Does it ever feel like marketing is an uphill battle? Well it kind of is. If you think about it, your business’ situation can be characterized by one of four conditions: Just Starting, Gaining Ground, Standing Still, or Losing Ground. As marketing consultants, if we know the condition of your business in these terms, we can make some educated guesses about what the contributing factors to that condition are.
Step one in smart marketing planning is Market Opportunity Analysis, and involves determining whether the external forces inherent to a market opportunity align with the forces at work within your business.
If your business is gaining ground, then our job as marketing consultants is to make sure that you understand why things are working in your favor. Armed with this knowledge, you can anticipate changes in external forces and make adjustments before your progress either stalls or reverses. The key is to know how and when to innovate to keep an advantage as more competitors pile into a lucrative market opportunity.
If your business falls into one of the other three categories, we start by asking two questions:
- Is the inherent force of the market opportunity you’re currently pursuing working in your favor?
- Is the opportunity a good match for your business based on its capabilities and resources (internal force)?
These questions help us assess whether you're investing in opportunities that maximize your profitability.
You Market on Escalators
It may seem like an odd metaphor, but the opportunities your business pursues are the escalators it rides in the attempt to gain the high ground of market share and profitability. It’s essential, therefore, that you know which direction the market forces are moving so that you understand how they’re impacting your efforts.
Escalators basically have three energy states: They’re going up, they’re stuck or they’re going down. We’ve all wasted energy walking up stalled escalators, but every once in a while we’ll see people attempt to climb descending escalators. It’s fascinating to watch them strive to overcome the energy working against them. See this principle in action:
It seems obvious that you shouldn’t pursue market opportunities that are either stalled or on their way down, yet we find businesses doing this all the time. My question is: Why do businesses so often pursue market “opportunities” that have energy states that actively work against their efforts?
Sometimes entrepreneurs misfire by launching enterprises too late in the product/service lifecycle. Sometimes established business owners fail to innovate in their market-spaces because they only know how to do what they’ve always done and they don’t understand why this approach isn’t profitable anymore. In either case they don’t fully realize that more efficient and higher-success-probability alternatives are likely somewhere close at hand. What it comes down to is knowing where your offering lives on the product/service lifecycle continuum developed by Raymond Vernon.
If you’re following a trend that is on its way up, then great; it is simply a matter of making sure that what you’re offering is differentiated and that you know how to attract, gain, and hold consumers who contribute to your overarching business goals. If, however, you’re riding an opportunity that is either stuck or is moving the wrong direction, then you need to realize that what you’re offering is either rapidly becoming or has already become commoditized in your market-space. If you find yourself in this situation, it’s essential that you begin looking for other escalators to ride. That is unless, of course, your business centers on playing the high volume, low margin game.
Market to Your Strengths
If your business is gaining ground, you’ve done a good job of multiplying the internal forces of your abilities and resources with the the external forces at work in the market opportunities you’re pursuing—at least for the moment.
If you’re just starting out or are either standing still or losing ground, however, it’s essential that you do two things. As outlined above, you must first make sure that you’re pursuing a market opportunity that is on its way up and not stalled or declining. Second, you must take inventory of your strengths, weaknesses and other internal factors in order to ensure that you’re truly in the best position to take advantage of the market opportunity you see.
It’s not always easy to be honest with ourselves when we take this inventory—especially when we get our hearts set on something. We may genuinely see a golden opportunity in a market-space, but we don’t realize that we’re either not well positioned or don’t have the practical ability to pursue the opportunity. Reasons include being under capitalized or under-qualified.
Now let me acknowledge that there are plenty of industries and market-spaces where there’s room for many competitors to thrive. If you’re struggling, it may just be a matter of collaborating with us to make some simple adjustments. Having said that, there are cases where a business needs a more fundamental market opportunity analysis in order to determine the market escalators that you are most poised to climb. This is why Lenker Consulting exists—to help you think through your market opportunities and overcome the forces that work against your efforts to attain higher levels of success.
Please contact us. We’d love to offer you a free initial consultation so that you can see how we think and how we might collaborate with you to help your business gain the high ground.
ONE: If you’re gaining ground in your market-space, congratulations. It’s likely that there’s energy built into the product/service lifecycle that is working in your favor and that you’ve effectively employed your unique abilities. There are two things to keep in the forefront of your mind as you climb: First, it’s essential that you understand how you’re differentiated from competitors who are also trying to ride the opportunity. Second, it’s essential that, when the momentum in the market starts to shift, you’ve identified ways to innovate so that you can ride a new product/service lifecycle curve without missing a beat.
TWO: If you’re just starting out in your market-space or are either standing still or losing ground, make sure that the market opportunity genuinely represents an opportunity for you based on your unique abilities, qualifications and resources. You must also be certain that you’re entering early enough in the product/service lifecycle that the opportunity’s momentum is helping rather than diminishing your success.
While there are many factors that ultimately contribute to the current condition your business, how you got to where you are is largely determined by how clear you are on the following:
- Why you offer what you offer and to whom, when and where you interact with your consumers and what you should ask them to do in each of these interactions in order to successfully drive the relationship forward.
- How you should design your products, services, and messaging to provide experiences that successfully influence people to say “yes” to you at every point of interaction.
When we explore these areas of inquiry, they should reveal just how strong a given market opportunity is and how well suited your business is to effectively leverage that opportunity to maximize your success.