How to Validate a Market Using Sales Development
Breaking into a new market is tough. When you lack data in a new market, it’s easy to get lost in analysis and theory. This is where market validation comes in:
Market validation is a process for determining whether a customer segment will value, adopt, and purchase an offering. When penetrating a new market, we need a light-weight process to test our hypothesis: Will the market accept our product?
One proven way to test a new market is by using a sales development team. Sales development takes a different approach to market validation. You can use SDRs to explore your offering in the market without the limitations—and costliness—of a broad-sweep marketing effort.
If done effectively, a successful sales development outreach will improve your messaging and your targeting while acquiring real-time market data.
Sales Development Reps are perfect for testing the waters of a new market.
Why Sales Development Outreach is Good for Market Validation
Sales Development Reps are the frontline of any sales organization. As opposed to salespeople, SDRs aren’t closers and negotiators, SDRs are nurturers and investigators. They’re the ones who make cold calls and set appointments for sales. With each touch on a database, they are extracting tidbits of information that is valuable for their sales team.
However, there’s more to Sales Development than setting appointments. SDRs can also help you understand the why: Why doesn’t the customer resonate with our product and message?
Steps to Validating Your New Market:
Step one: Create your new database
The first step is to create a well-organized and accurate database for the new market. Consider what you already know, take what you know about your existing market and compare it against the nuances of the new market.
For example, let’s say we’re a software company that designs client management technology for banks and credit unions. We’re looking to expand our software sales into the medical industry. However, we don’t know if we’re a good fit for this new market. We understand that the personas aren’t identical and that we need to figure out which pain points are similar and which are different.
With this information, you can now build a strong database foundation to begin your sales development efforts.
Step two: Start talking with prospects
Remember, you don’t want to spend too much time in theory and projections, you want to get your message out into the market. At this step, we are trying to figure out if the message will be received, and if the pain points apply to this market.
Having direct conversations with prospects can be far more valuable than spending money on a marketing initiative before really understanding the market.
Use the prospects’ input to refine your messaging and adjust your targeting if necessary. Here are a few ways to gather information about your message:
Surveys can be an effective method of collecting data for refining your persona and their needs.
The goal for appointment setting is to convince the person on the other line to learn more and set up a no-frills call with your sales reps. This is very effective because it allows the prospect to speak about your product on their own time, on their terms.
Feedback from sales
If you can set appointments with your salespeople, but the SQLs aren’t turning into buyers, there is an excellent opportunity to learn about the quality of your product as it pertains to the market. Your salespeople can annotate the general interest of the prospect and quality of the conversation and help inform decisions about the database you are targeting.
These are the tools our SDRs use to extract information
- Lead Summary: An email that outlines how we got to the person, who they are, and what they are interested in.
- EBrating: a lead qualification process for eliminating unknowns to prioritize outreach.
- EBcomments: notes on the most recent and relevant interactions with a prospect.
Step Three: Evaluate your results
Now that you have a relevant database and have spoken with prospects, it’s time to take a step back and evaluate your results. Review what worked and what didn’t work in your conversations, use that feedback to improve your pitch and check that your personas are accurate.
What if my message isn’t working?
Let’s say that your carefully crafted value proposition isn’t getting any responses. Not even a proper objection such as “we already have a solution for that,” at best you’re getting “not interested” before they hang up. You may have an inaccurate database and need to pivot your strategy. If it’s not your database, you’ll need to start running surveys and write a new value proposition after collecting new data.
At EBQ, we treat this process as a short feedback loop that allows for process improvement. Our sales development teams have a biweekly CIM (continuous improvement meeting) with our clients to make sure the database and message are validated.
There are many different approaches to market validation, but using sales development outreach offers a lightweight way to understand how the market will accept your product.