How To Use AI To Validate a New Market Entry

In today's volatile sales landscape, diversifying into new markets is key. Doing so is a challenge for any sales leader, but AI presents an opportunity to can quickly test the viability of entering a new market. Here’s how.

Dan Moran
2023-09-20

Today’s selling environment is overwhelmingly defined by two things: shifting markets and economic unpredictability.

For sales leaders, grappling with relentless and compounding disruptions to break through to increasingly cautious buyers is a constant challenge.

As achieving consistent and predictable revenue growth in an established market becomes increasingly complex, one solution is to diversify into new ones.

Breaking into a new market is no small undertaking. Up until recently, introducing a product or service to a new market was a once-in-a-fiscal-year, swing-for-the-fences endeavor that dedicated entire business units to a strategy that may not pay off.

Or at least, it used to be.

With artificial intelligence, that’s no longer the case.

By leveraging AI technology, it is now possible to test the viability of a market entry quickly and with limited resources. For savvy and agile CROs, this game-changing can be put to use to quickly assess and validate whether or not it’s worth entering a certain market.

(To use an apt analogy, do a little prospecting to see if there’s gold in the hills before sending in the heavy machinery—and potentially coming up empty handed.)

Whether you're a CRO at a budding start-up or steering sales at a scaling organization, this guide will show you how to validate market entries efficiently and cost-effectively with AI.

Entering New Markets: What CROs Need to Know

Assessing a new market entry requires detailed planning and an airtight execution strategy that the executive team and board of directors can get around. Your strategy needs to address questions like:

Which market are you trying to enter?

This is the first and most obvious question. Where are you trying to penetrate?

It doesn’t always need to be a new territory or geographical location. Depending on the nature of your product or service—and especially if you sell SaaS that can be used anywhere—a new market could mean:

  • Industry: Entering new markets could be breaking into new industries. They might be already serviced by competitors whom you could challenge. Or they could be entirely unaware of your category, product, and the problem it solves. Demand generation is key here.
  • Segment: A targeted group of potential buyers with similar needs and challenges.. For example, if a SaaS product typically targeted towards B2B marketers pivoted to B2B salespeople through a new product offering or with new messaging.
  • Geography: Of course, there are geographical markets. Expanding into new national or global areas is more accessible than ever thanks to technology. But the challenges of doing so remain. A reverse example: Kleenex is pulling out of Canada due to the “unique complexities” of the market. Canucks who may shed a tear about the news will have to reach for a Scotts, instead.
  • Up-market/down-market: Moving into enterprise markets is a well-documented growth strategy for SaaS businesses. It’s notoriously difficult to pull off. Likewise, moving down-market with a product-led growth (PLG) strategy or freemium offering is a viable, but also difficult, shift.

Once the market you’re exploring clearly defined, it's time to turn to some other important considerations.

Assessing the Market and Competitive Landscape

It’s common for ambitious companies flushed with an exciting new plan to tap into an untapped market to underestimate the competitiveness of such a market.

Research into the state of the market and understanding the existing solutions are critical to success.

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Who are the major players?

You need to know who you’re up against. Identify your major competitors to get some insight into their go-to-market (GTM) strategy, and how they price their products, and how happy their customers are. Your ability to articulate why you are different from and superior to other available solutions is critical here.

How big is the total addressable market (TAM)?

Alongside the size of the addressable market, how many companies fall within your ICP? Understanding the average deal size and how many you expect to close is critical to forecasting success and actual revenue numbers in a new market. You can use AI to scope both market size and potential, and even create account lists to begin prospecting.

What are the major consumer trends?

Have your prospective customers ever heard of you? How do they experience the problem your product or service solves? What solutions do they use now? These are all key questions to address to position your offering to an audience who may not have heard of your brand, or the problem you are trying to solve.

How will you execute this market entry strategy?

This is the big question. One your executive team and board will expect an airtight answer to. The main strategic considerations include:

  • Budget: How much cash can you dedicate to this initiative?
  • Timeline: How long until you see results? The ideal outcome here is a definitive answer as to whether this market is worth entering. Which requires:
  • Clear success/failure criteria: What data do you need to see to either commit, pivot, or shut it down? It’s okay to rule out the plan if the data doesn’t back it up. Especially when you can test quickly and cheaply using AI and the steps below. 
  • Size of the prize: How big is this market? Quantify the size of the opportunity.
  • Business goals: The overarching objective of a market entry is revenue growth. It’s important to always tie the strategy back to projected revenue growth. 

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Market Entry Methods: Which Is Best?

Established GTM motions that have worked for you in other markets may not always be as successful when testing the waters of a new segment. When entering new markets, here are some strategies to consider:

Establish a dedicated local team

Setting up a dedicated presence or team in the new market is easier than it used to be thanks to tools like Deel or Omnipresent which allow you to hire locally without establishing and incorporating an entity.

Pros: Boots on the ground gives you the direct line into the culture, climate, and nuances of the market. Establishing a presence, whether physically or virtually, builds rapport and trust among your potential buyers.

Cons: Super expensive to set up, and a longer time-to-value. Difficult to pivot or pull back, both from a financial perspective and the human toll of laying off people/teams if things don’t work out.

Inbound Marketing

This strategy involves creating content for your target persona and distributing it with the goal of getting ideal customers to come to you.

Pros: Inbound prospects are typically more educated on the problem you solve and the solution you provide once they reach the sales team, which makes for higher quality leads. Good inbound marketing builds trust and affinity with potential customers, and results compound over time which bring long-term benefits.

Cons: This approach can yield longer initial results, meaning there’s longer to wait to see an ROI. Inbound also demands continuous effort and adaptation to stand out and capture in a crowded content landscape.

Outbound Sales

While outbound can refer to marketing too, in this approach we’ll discuss outbound sales. Think prospecting leads who haven’t heard about you with cold emails, calls, and social selling.

Pros: Immediate reach leads to faster brand awareness, precise targeting allows you to put a relevant message in front of the right people, and it’s easy to track and measure results.

Cons: Traditionally, this approach is resource intensive and expensive. Lower conversion rates are possible due to the cold nature of the outreach. Reps only have one shot to get it right with potential customers—if you lose their trust they won’t come back.

Why outbound is the only way

Despite the potential downsides, outbound is the smartest go-to-market (GTM) strategy for entering new markets. Especially when you have AI to empower your efforts.

  • Unlike inbound methods that rely on customers coming to you, outbound allows you to be proactive and tailored and quickly build demand with the right audience.
  • The higher costs traditionally associated with this approach can be massively reduced by smart automation and AI tools.
  • Feedback is immediate so you can adapt your approach on the fly, and targeting is precise. It’s also easy to quickly test multiple messages to identify what cuts through the noise and generates demand in unfamiliar markets.

Instead of waiting for the market to discover you, outbound ensures you hit the ground running.

How To Use AI To Validate a New Market Quickly

Here’s how you can quickly test the viability of a market entry by researching your ideal customer, locating ICP leads, reaching out to them with different messages, and collecting the data you need to make an informed decision—all with the superhuman speed and efficiency of AI.

1. Determine your ideal buyer

Your target customer in a new market will be different from who you and your team are used to selling to. 

Even if it’s a relatively straightforward geographical expansion you’re considering, the culture and customs of this new locale are likely different enough to avoid making assumptions.

AI can help you create hyper-specific ideal customer profiles (ICPs) that you can use to target your approach.

Tools powered by machine learning models can analyze vast amounts of data at rapid speeds, identifying patterns and insights that might be imperceptible to human analysts.

When combined with existing customer data and basic firmographic and demographic information, AI can help you transform your assumptions of what your ideal buyer in a new market looks like into a highly detailed ICP. For example, AI can help surface and locate intent signals such as:

  • What tools are in their tech stack
  • Hiring and headcount trends and shifts
  • Common pain points or challenges
  • Recent fundraising

The output of this phase is to create a clear picture of who you’re selling to. Next, it’s time to find them.

2. Locate ICP leads

Data collection used to be one of the most expensive components of an outbound strategy. It was also a gamble, with questionable data quality the standard.

With AI, that is no longer the case.

AI tools can scan dozens of sources to get accurate contact data that match a given criteria. In this case, the ICP created in the step above. Leveraging AI at this step diversifies your approach and spreads out the risk of running campaigns with bad data, which can impact your sender score.

3. Prospect research

With a rock-solid picture of your ideal buyer, and good data on who that person is and how to get in touch with them, it’s time to do your homework.

With the capabilities of AI, researching prospects can take seconds instead of hours.

This is a critical step in the outbound process. You’re messaging strangers out of the blue about a product they’ve never heard about. You need to make it personal and relevant to them or you’ll never stand out from the generic cold messages flooding people’s inboxes.

AI-powered tools can scan publicly available information such as LinkedIn profiles, company reports and job postings, review sites, and relevant news.

From there, using the magic of large language models (LLMs), it can condense that research down into relevant insights that you can use as triggers for your outreach.

4. Personalized messaging at scale

What you say and how you say it is still the make-or-break element of outbound.

Prospecting has always been about the balance of personalization and scale. Now with AI, it’s possible to have both. Armed with your research from the previous steps, AI can create respectable messages that are unique to each prospect and personalized to their challenges and priorities.

The key here is to keep humans in the loop. AI augments your capabilities, but doesn’t replace human creativity or judgment. The burden also remains on you for credibility and accuracy.

However, the power of LLMs has carved significant time off this critical step in the process. Rather than dealing with a blank page, you now have an excellent first draft to tweak and refine and make it yours.

5. Multi-channel outreach

One of the downsides of the outbound approach is the noise.

Standing out and capturing your prospect’s attention is not easy. The best way to increase the chances of doing so is reaching out across multiple channels.

This part of the function needs to be automated to reach the kind of scale to get any meaningful data. Deliverability across each of these channels also needs to be solid to make sure your prospects actually see your message.

While outreach doesn’t rely directly on AI, and can be handled with standard sales engagement tools, AI still makes the difference in that the messages being sent are unique and personalized to each recipient. This personalization sends strong signals to email service providers that this is a legit message and not one of a thousand identical automated emails, and increases the chances of it landing in the inbox.

For a complete breakdown of what email deliverability is and why it matters, check out our ultimate guide to landing in the inbox every time right here.

6. Analyze & optimize

Good clean data is core to assessing the viability of a market entry strategy.

The ultimate goal of the strategy outlined above is to either validate or invalidate the move into a new market. Once you’ve run a pilot campaign, and you have enough volume for it to be statistically significant, you’ll have the data you need to commit or pivot.

Each data point gives you good insight into the reception of your product and messaging:

  • Email open & response rates tell you whether your message is resonating and compelling.
  • Booked meetings demonstrate their is demand for your solution in a new market
  • ICP analysis to confirm or refine the type of prospect to whom you’re reaching out

How to enter new markets with OneShot

If you’re thinking the above process is a fantasy, or years away from becoming a reality, let me assure you this is very much achievable with technology that exists today.

Because that’s exactly what OneShot does.

OneShot is the end-to-end AI-powered prospecting platform that runs your entire outbound sales motion.

With OneShot, you can quickly validate a market entry strategy by:

  • Creating a hyper-specific ICP based on dozens of parameters and buying signals and where you’re already seeing success
  • Sourcing ICP leads that match your ICP from multiple sources, leveraging AI to ensure data accuracy
  • Research prospects and uncover relevant insights you can use in your outreach in a fraction of the time
  • Create personalized messaging at scale with state-of-the-art generative AI that’s unique to each prospect 
  • Reach out across multiple channels automatically, with real-time monitoring to ensure your messages go where they’re supposed to and avoid the spam folder
  • Automatically adjust your approach as more data becomes available, and maintain full visibility into your entire outbound machine.

Want to see for yourself? Grab your personalized demo of the OneShot platform right here.

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