Customer Market Mapping: Advantages and Disadvantages

According to the Federation of Small Businesses, SMEs makeup 99.9% of the UK business population - accounting for 60% of employment and around half the turnover.

This presents a double edged sword for B2B SMEs; your enormous potential client base is also being targeted by thousands of similar enterprises hoping to secure deals before you.

What is a Customer Market Map?

You may have heard of market mapping as a tool to analyse your competitors and their activity. On the flip side, a customer market map analyses your current client base, and every single company you could market your services to.

There are a few key terms you need to be aware of:

TAM - Total Addressable Market

• Every established business in you geographical region which have a demand for your products or services.

SAM - Serviceable Addressable Market

• The subset of your TAM which can be sufficiently serviced by your company, considering your resources and target demographics. For example, you may be ill-equipped to offer your accountancy services to a company in the FTSE 100.

SOM - Serviceable Obtainable Market

• A smaller set of your addressable market which your business could feasibly work with. This may be 10 or so companies in your SAM, and depends on how much work you can take on each year, along with your marketing abilities.

In summary, the goal of a customer market map is to identify the opportunities for your SME in the market, and give valuable insights into these potential customers for strategic planning and growth.

Disadvantages of Customer Market Mapping

A customer market map can provide crucial data for long-term decision making within your SME. However, it is not without drawbacks.

1. Requires Good Internal Data

If you don't keep clear and consistent records of the clients you have worked with, along with the services you have sold to them, it is incredible challenging to gauge trends in your track record, and understand who actually makes up your SAM. It is also impossible to identify your top clients, and target them with upselling and cross-selling initiatives.

2. Requires Reliable External Data

Manually researching every single business that you could target is an endlessly tedious task. Creating a customer market map requires data on millions of companies, which must be sourced from a proprietary data provider. Companies like Moody's Analytics scrape information from Companies House and can give you access to a filterable company database.

3. Requires Data Skills

The process of mapping your existing customers to an external data source will take a certain level of technical ability. Effectively cleaning and analysing may require coding experience, and visualising outcomes clearly may benefit from knowledge of common business intelligence tools. Unfortunately, many SMEs without in house data teams are unable to reap the rewards of market mapping without outsourcing.

4. Requires Effective Marketing

There is very little benefit to creating data-driven plans to target your potential customers and develop existing relationships if you cannot seal the deal. Customer market mapping is best suited for SMEs who are looking to scale but unable to identify where the most opportunities exist, not SMEs who have a long list of ideal clients that are ignoring their cold emails!

Advantages of Customer Market Mapping

There are numerous potential insights that can be gained from mapping your target customer base - provided you can adequately create and visualise your map.

1. Find Up-selling and Cross-selling Opportunities

One of the key steps in creating a map is consolidating your existing or previous clients. If your SME has multiple products and services you should visualise the total amount each client has spent on each service. This not only highlights your top customers but also opportunities to sell more of a product, or to reach out with an add-on.

2. Finding New Business Development Leads

Every business should have a long list of target clients for them to market and pitch their services to. By following through with a customer market map, and utilising external data sources, you can identify every single opportunity for your business to scale and expand.

3. Developing your Marketing Strategy

Lets assume your map reveals that 20% of your clients are in the AI space, and that these clients make up only 5% of AI companies matching your target size and location. Identifying so much potential could catalyse a drastic change in your long term marketing plan, with an overhaul of your entire online presence to attract more companies of this type.

4. Expanding Geographically

A customer market map highlights the countries and cities with the most businesses relevant to your products. For example, if you operate mostly in the capital but realise there are several cities nearby ripe with potential clients, you may consider setting up an office, or allocating resources nearby, to properly cater to that region.

Conclusion

If you would like to know more about how to implement a customer market map, we have an article on exactly that.

If you think this insight could revolutionise your SME, reach out to us at Floresco.ai, we provide bespoke solutions for businesses lacking in data professionals.