by: James Young
Associations need new revenue.
One way of doing this is to leverage existing value to create new products for our existing membership. Another is to use this value to identify and reach new markets outside our core membership. This article will focus on the latter to unlock growth.
In past articles, we have covered market-based topics from positioning your association for growth, competition, differentiation, understanding your customer, getting new products to market, and developing a value proposition.
In service of growth, this article will focus on using a toolset called the market opportunity navigator to identify and prioritize new markets.
The Product Community is a product development learning community designed specifically for associations.
The Importance of New Markets
“Focus is not about saying, ‘yes’; focus is about saying ‘no’.”
In the Product Community, we care deeply about the market. It’s our way of building member-centric products and experiences that create connection and grow revenue.
A market is a group of members or organizations that are interested in – and has the resources to purchase – a product or service. Last week we addressed the importance of understanding our market size, thereby teasing out our potential community and identifying the portion that can be realistically captured and served.
Membership is not the same thing as the market. Why? Because people engage with associations in different ways for diverse reasons, only one of which is membership. This creates the possibility for a multi-faceted value proposition and new opportunities for reaching new audiences. For instance:
- Some people like membership
- Others just want learning
- Some like publications and content
- Others like networking and peer mentoring
- Some just like to attend the annual meeting
That is, associations can have different markets (within, or outside, their membership) for each of their product lines – webinars, podcasts, membership, events, or learning, etc.
For example, membership to an association that serves cardiologists will be popular to heart clinicians, but content or programming from the same association could also serve cardiology healthcare teams, thereby including advanced practice providers, nurses, radiologists, and anesthetists.
Learning to create the right value (products, programs, or services) can spark engagement, create new and deeper connection, and draw new people who are interested in particular components.
This can help us move beyond our assumed (or assured) membership in order to attract and capture new markets. If properly designed, we can leverage our value to reach and tap the energy of these new markets to fuel our engagement, connection, and growth.
Why is it so hard to identify and reach new markets?
- We are monolithic. Despite creating and offering diverse content and experiences, our value proposition seems synonymous with membership or joiner-ship. Not a bad thing necessarily, but can be a deterrent to people who resist the traditional benefits model and who tend not to be joiners. Also, as discussed in last week’s article on the size of potential market reach, our traditional concept of market tends to be finite.
- We are broad. Despite framing our missions and markets as fairly specific (to particular industries, job types, shared interests, etc.), associations can be scattershot in our approach to understanding and reaching new markets. An all-things-to-all-people approach is the opposite of designing for growth. It is better to take a specific problem-based approach to the market (we will cover this in a future article).
- We lack intelligence. We tend not to have reliable market intelligence to make sound decisions. Associations notoriously struggle with maintaining good data, competition can be tricky to gauge, and we lack a reliable clearinghouse for association market data.
- We are risk averse. As volunteer-run organizations with revolving leadership, it’s hard to make strategic bets that will serve the membership community in the long run.
- We are incremental. We are also incremental in our approach to change. I favor incremental change only if it’s part of a set of integrated, strategic choices that we’ve made in service to focused growth. Otherwise, incrementalism often masquerades as random, fragmented, shiny-object decision-making without a guiding framework.
Let’s build off these possible barriers as we utilize a tool called the market opportunity navigator to identify, evaluate, and prioritize new market opportunities.
The Market Opportunity Navigator
“Research shows that entrepreneurs don’t spend enough time identifying and researching their market opportunities. Instead they jump at the first promising opportunity and fail to properly evaluate or leverage other options. This common mistake means entrepreneurs often choose the wrong market or lock themselves into one specific direction.”
Marc Gruber and Sharon Tal
Associations can reach new markets if we invest in – and learn to channel – the value we create to people or communities hungry for great content, good relationships, and deep impact.
The Market Opportunity Navigator is a framework to help associations identify, evaluate and prioritize market opportunities. It is based on three fundamental questions:
- What market opportunities exist for us?
- What are the most attractive market opportunities for us?
- What market opportunities should we focus on?
Before associations burn valuable resources to ‘go after a new market’ to, for instance, distribute its educational programs, widen its membership, or identify a specific target group, we are wise to uncover (and eventually attract) members who may have interest in our distinctive value proposition.
It is best to map out our landscape of opportunities first.
The market opportunity navigator is a tool used by associations to identify and explore potential opportunities in the market. It helps associations identify new areas of growth and develop new products or services that meet member needs or attract new members.
The market opportunity navigator was developed by Marc Gruber and Sharon Tal of the Swiss Federal Institute of Technology in Lausanne (EPFL). It is based on years of research into how successful organizations identify and exploit market opportunities.
Before jumping into the meat of the tool, associations are encouraged to make four lists:
- Identify member needs. This involves understanding the needs and desires of potential members. It is important to identify not only what members want, but also what they need, and what problems they are trying to solve. This step requires market research and a deep understanding of member behavior.
- Identify market trends. In this step, associations identify the trends that are shaping the market. This includes changes in member behavior, emerging technologies, and shifts in the competitive landscape. Understanding market trends is important because it helps associations anticipate future demand and stay ahead of the competition.
- Identify strengths. Associations need to understand their own strengths and weaknesses. This includes their technical capabilities, brand reputation, and market position. Understanding their strengths, helps associations identify areas to leverage their existing assets to create new products, programs, or services.
- Identify unmet needs. Finally, associations need to identify unmet needs in the market. These are needs that are not currently being addressed by existing products or services (whether offered by an association or not). Identifying unmet needs is important because it represents an opportunity for associations to create new value and differentiate themselves from the competition.
Once an association has gone through these four steps, they can start to identify potential market opportunities. This may involve developing new products or services that meet unmet needs, leveraging existing strengths to enter new markets, or adapting to emerging market trends.
How it Works in Practice
The Market Opportunity Navigator is a tool that helps professional associations identify new market opportunities for their services or products. There are typically three discrete stages:
- Market Opportunity Set. Assessing an association’s unique abilities and identifying valuable market opportunities stemming from these capabilities.
- Attractiveness Map. Evaluating possible market opportunities to reveal the most promising options.
- Agile Focus Dartboard. Building a smart portfolio of backup and growth options around the chosen market opportunity to consciously avoid lock-in and remain agile.
Here’s how it works using an example of an association that serves graphic designers:
- Create a Market Opportunity Set: The association could brainstorm a list of potential markets where graphic design services could be valuable. Some examples could include small businesses, startups, non-profits, and educational institutions. They could prioritize these markets based on factors such as market size, revenue potential, competition, and alignment with the association’s mission and values. You can do this by talking to your members, researching trends in your industry, and analyzing the needs of potential customers. Once you have a list of markets, prioritize them based on their attractiveness and feasibility.
- Make a List of Who You Won’t Serve. As important as it is to identify potential markets you serve, it is equally important to identify markets that you won’t serve. This might seem like an exercise in folly, but it is important to be explicit as it will help tighten up your market opportunity set. In a possible market for graphic designers, we could choose not to serve: c-level leaders, international audiences, or non-English speakers. Making a list of who won’t serve is also an entre to designing specific market segments.
- Build an Attractiveness Map: Once you have a prioritized list, create an attractiveness map to visualize the potential of each market. An attractiveness map is a visual representation of the potential of a market opportunity based on the level of challenge involved in pursuing the opportunity, and the potential payoff.
- The map is divided into four quadrants: Gold Mine, Moon Shot, Quick Win, and Questionable. The y-axis represents the potential of the opportunity, with higher potential opportunities located towards the top of the map, and lower potential opportunities located towards the bottom. The x-axis represents the level of challenge involved in pursuing the opportunity, with easier opportunities located towards the left of the map, and more difficult opportunities located towards the right.
- The Gold Mine quadrant represents opportunities that have high potential and low challenge. These opportunities are considered the most attractive and are typically the ones that should be pursued first. The Moon Shot quadrant represents opportunities that have high potential but high challenge. These opportunities are riskier, but can offer great rewards if successfully pursued.
- The Quick Win quadrant represents opportunities that have low potential but low challenge. These opportunities are often easy wins, but may not offer significant long-term benefits. The Questionable quadrant represents opportunities that have low potential and high challenge. These opportunities should generally be avoided, as the potential benefits may not be worth the effort and risk involved.
- Create an Agile Focus Dartboard: Using the output of the attractiveness map, create. The agile focus dartboard is a visual tool used in product development to help prioritize ideas and opportunities. The dartboard is divided into three concentric squares, each representing a different level of priority for the opportunities:
- Pursue Now. This is the innermost square and represents the ideas that are the highest priority and should be pursued immediately. These are typically the ideas that have the highest potential for success and are aligned with the company’s current goals and resources.
- Keep Open. The middle square represents ideas that are worth exploring further but may not be a priority at the moment. These ideas should be kept in mind and revisited later when there is more time or resources available.
- Put in Storage. The outermost square represents ideas that are not a priority and should be put on hold or discarded altogether. These ideas may not align with the company’s goals or may not have enough potential to justify further investment.
- Iterate and Refine: Finally, use the Agile Focus Dartboard to guide decision-making and to experiment with new opportunities. For example, consider developing a targeted marketing campaign or partnership to reach out to small businesses or startups and measure the response to gauge the feasibility and attractiveness of the market. Based on the results, they could adjust their focus and priorities accordingly. As you learn more about each market opportunity, you can move it to a different square or abandon it altogether.
Overall, the Market Opportunity Navigator can help associations identify new opportunities for growth, align their resources with the most promising markets, and make data-driven decisions about where to invest their precious time and resources.
“The entrepreneur’s dilemma is focus, focus, focus – but on what?”
People want to be connected.
Connection – to content, to experiences, to peers, to opportunities, to trends – is the value driver and central kernel of a vibrant association market presence.
We believe associations need a strategy to develop and deliver regular, fresh new products, programs, and services to drive this revenue. If approached with the right focus, the strategy will create new energy and diversify revenue.
The market opportunity navigator is a useful tool for associations to take a structured approach to identifying and exploring market opportunities. By following the steps, associations can get better at identifying opportunities, avoiding common pitfalls, and minimizing the risk of failure.
For example, associations may be tempted to focus too narrowly on their existing products or to pursue opportunities unaligned with their strengths or capabilities.
By using these tools, associations can have a more thorough sense of what’s coming and how to best manage growth.
About the Author
James Young is founder and chief learning officer of the Product Community®. Jim is an engaging trainer and leading thinker in the worlds of associations, learning communities, and product development. Prior to starting the Product Community®, Jim served as Chief Learning Officer at both the American College of Chest Physicians and the Society of College and University Planning.