Pivoting your product to better meet the needs of you target customer is key, but before you do this, shouldn’t you know whether that target customer’s market is the most attractive one to serve? Gaining traction in the right target market is critical to ensure your efforts are rewarded.
I’ve talked about market sizing before and today I’d like to share with you an additional resource to help you get accurate data about your potential customers, their growth rate, and their income levels (spending ability). This tool works particularly well when selling to consumer end-users, but can also be very useful in B2B environments as well.
After the big reveal, I’ll look at a couple target customers that work in healthcare. Amazingly, you won’t easily find this weapon through a web search for “market sizing.” For some reason it isn’t frequently talked about on the interwebs. In fact, this site won’t show up in the top 300 results of Google. But trust me when I tell you there is a treasure trove of highly accurate data that you can use to identify your best target customer.
Drum roll, please…… badum, badum, badum, badum, Ttishhh
The secret weapon to sizing up your target market in the U.S. is delivered to you by the U.S. Bureau for Labor Statistics (BLS) website – http://bls.gov.
Now, let me give you an example of what you can find through BLS. Let’s say we wanted to compare the market opportunity for a product that serves Physician Assistants (PAs) and Registered Nurses (RNs).
We can go to the BLS website and lookup these two professions to see how much they make, how many of them are employed and what the growth rate is for each profession. The summary statistics for each is copied below.
BLS Summary for Physician Assistants
BLS Summary for Registered Nurses
With this basic overview data and lots of other more detailed data provided by the BLS we can create a quick and dirty analysis of the potential market size for each profession. Using your spreadsheet software you can simply multiply the number of jobs and the median (or average) pay to get your current market size. You can also add in the growth rate to see how much your target market will grow.
Given these two summaries and based on no other information, it appears to me that the registered nurse market earns about $177B, which is almost $170B more than the physician assistant market, which earns ~$7B. That’s a huge difference in potential earnings!
Once you have this data you can add more sophisticated market analysis, such as penetration rates, amount of disposable income, and future market size. However, if you simply want access to good data for understanding the current and future earnings of a particular target customer, then look no further than the BLS website as your starting point.
What do you think? How do you go about market sizing your target markets?