WRITTEN BY ERICA FOSTER, FLUVIO CONSULTANT
Have you ever worked with a product that has a very broad set of potential customers? Or do you have so many potential customers that you don’t know where to focus?
One Fluvio client faced this same challenge. They had a fantastic product with several potential markets to consider. We were tasked with figuring out which markets to pursue.
I was stumped on how to narrow down this big blue ocean, until I came across a tool typically used by product teams called the Market Attractiveness/Fit Framework.
It reminds me a little of BCG’s Growth Share Matrix sprinkled with some of The GE McKinsey Matrix (or maybe that’s just me!?).
Basically, it’s a tool that helps create a prioritized list of markets to focus on and eliminate opportunities that aren’t a good fit. It goes a little something like this:
Research & Identify potential markets to consider
Score Markets based on various factors (growth, competition, capabilities, etc.)
Markets are plotted on the Attractiveness/Fit Matrix
Core Markets/Big Bets are identified
I’ll take you through each step, with modifications of the framework I made to reflect a PMM’s point of view.
Step 1: Research & Identify potential markets to consider
I’d recommend planning for a 2-3 week period of gathering and synthesizing research for market consideration. You can’t just pull markets out of thin air (I tried, it didn’t work), so spend some time scheduling prospect and customer interviews. Listen to those backed-up lists of sales calls you have on Chorus or Gong. Slice up a new Salesforce report to see what industries are trending well for closed-won deals. And if you’re feeling ambitious, take on a few surveys to validate any assumptions you have about potential markets that may be a good fit for your product based on industry trends.
For the client I mentioned, prospects from medical device companies were interested in our use case, so we tossed those on the list to consider. We also saw that cyber security companies were trending upward in closed-won deals, so added that one too, and so on.
Once you feel good about the list of markets you want to consider, you can start scoring them.
Step 2: Score markets based on *reasons*
Again, throwing your thumb into the wind isn’t an effective way to find a reason a market is attractive or a good fit. So I came up with some scoring guidelines for each criteria that make up an overall Market Attractiveness Score and overall Market Fit Score.
First, calculate the Market Attractiveness Score.
Market Attractiveness Score = Opportunity Score + Competitive Score
Add 1 for each ‘yes’ to the question below to get a score from 1-5. I realize some of this is a little subjective, but that’s why we did so much research in step one, so you can make informed subjective decisions.
Next, calculate your Market Fit Score.
Market Fit Score = Positioning Score + Capability Score
Same deal, add 1 for each yes to the question below to get a score from 1-5.
I’d list the markets and scores in a table like this:
Taking it back to the Fluvio client example here, we realized that the medical device market presented several different challenges around data privacy and regulations. This influenced the capability score and thus the overall fit score to be lower than we anticipated.
Step 3: Plot your markets on the matrix
Now that you have potential markets identified and scored, you can plot them on the Attractiveness/Fit Matrix.
The y axis indicates the market attractiveness scores on a scale of 1-5 (low to high), and the x axis indicates the market fit on a scale of 1-5 (poor to good fit). Here I’ve sized the bubbles based on TAM size, but that’s up to you if you want to get fancy with it or not.
Step 4: Identify Core Markets and Big Bets
Here’s where it all comes together. You can overlay/circle on a whiteboard/etc. these three sections onto your matrix.
Core Growth Strategies are the markets in the top right corner of the matrix (in the darker blue below). These are your top opportunities, least risky, and high potential return.
Big Bets are the markets in the top left-ish (light blue area), and indicate markets that are strategic moves, attractive opportunities, but a little riskier in nature due to the fit.
Do not pursue markets that fall in the red section. These markets aren’t really attractive, and you have a lower capability to execute on them.
I hope the next step is obvious, but I’ll tell you anyway: list out all the markets that fall into Core Growth Strategies as the next priority to pursue. Then, list out your Big Bets as those longer-term opportunities to consider as a part of your strategic roadmap.
From my previous example, our client could see the cyber security market was a core growth strategy for them and validated moving forward with that market was the highest priority. From the matrix we could also show that the medical device market was lower on the fit score, and therefore we knew that it was a big bet, and they’d need some product and data enhancements to justify the pursuit.
Using this framework to approach our client’s problem, we were able to bring them on the journey with us, refine it with them, and show them why pursuing specific markets as a part of a growth strategy made sense. As a Product Marketer, the journey is just as important as the final outcome -- this approach makes it easy to bring people along for the ride.