Market Gaps: 10 Ways to Spot Untapped Customer Needs
How do product managers identify market gaps?
This is the main focus of the article, so if you’re after the answer, we’ve got you covered!
Let’s get into it!
- Market gaps are the disparities between what customers need and want, and what the market can deliver.
- A market gap can be caused by missing functionality or poor user experience.
- Canva identified a market need for a user-friendly graphic design tool for non-designers and DocuSign for a secure solution to sign and manage digital documents and contracts.
- Tracking user behavior in-app enables product teams to find ways to improve product experience.
- You can collect feedback from your customer base via in-app surveys, feedback widgets, interviews, and by monitoring social media mentions and reviews.
- Your colleagues, especially customer-facing ones, can offer valuable insights into unmet user needs and shifts in the markets.
- Market research techniques, like industry-specific surveys and customer segmentation analysis, can help you find underserved user groups in the market.
- Keyword research and industry reports are two ways to track market trends and identify arising opportunities.
- Competitor analysis enables PMs to find areas where rivals fail customers and develop sound positioning and differentiation strategies.
- Study successful products from international markets to see if you can replicate their success in your local market.
- Industry events, like Product Drive, are an opportunity to catch up with the trends in the sector.
- Use predictive analytics and follow thought leaders in your niche to stay ahead of industry changes.
- Legal and economic changes result in market shifts, so follow them closely so as not to miss the opportunities that they present.
- Before implementing the ideas to fill market gaps, validate them thoroughly.
- Want to see how Userpilot can help you find market gaps? Book the demo!
What are market gaps?
A market gap is a discrepancy between customer needs and expectations and what the existing products in the market offer.
What could lead to market gaps?
The obvious reason is the lack of products or features that adequately address user requirements or pain points. They could also result from inadequate user onboarding leading to low feature discovery and adoption, ineffective marketing strategy, and poor user experience.
As such, product gaps are opportunities for SaaS products to improve and grow.
What are examples of market gaps?
DocuSign has recently saved me hours if not days.
When putting my flat on the market, I was able to sign all the contracts electronically within minutes.
The alternative would have been to wait for the documents to arrive by post, sign the paper copies, and return them in the same way. Or drive to the estate agent and attorney offices to do it in person.
Fortunately, DocuSign once recognized there was a need for a secure and efficient electronic signature and contract management solution.
Canva is another one.
Do you remember life before Canva?
The only way to create professionally-looking graphics was with Adobe tools, like Illustrator. The catch is that the Adobe suite is expensive and has a steep learning curve.
10 ways to help you identify market gaps
How do you search for market gaps?
Here are 10 tried and tested ways to do it!
1. Track in-app customer behavior to find fresh ideas
Take funnel analysis as an example.
By focusing on these areas of product experience, you can boost customer satisfaction and retention.
2. Collect and analyze customer feedback
Want to know how to better meet your customer needs?
Trigger surveys to spot market gaps
Collecting customer feedback in SaaS is easy.
With tools like Userpilot, you can effortlessly create and trigger in-app surveys and collect user insights.
Do this regularly to track changes in user sentiment so that you don’t get blindsided by new customer needs and miss opportunities to serve them better.
On top of that, trigger contextual surveys to collect feedback on specific product aspects. Launched a new feature? Trigger a CES survey to identify opportunities to make it easier and more intuitive to use.
Q1: How easy was it to complete ‘Task X’?
Q2: How could we make it even easier for you?
Collect passive feedback through an on-demand widget
Don’t rely only on feedback solicited actively.
Instead, enable a feedback widget inside your product to give users a chance to submit their feedback when they need it.
Such passive feedback is much more valuable because users give it voluntarily and at a time when it suits them best.
Interview existing customers
Another good way to identify emerging market gaps is by interviewing your customers.
Make a habit of interviewing continuously so that you can stay on top of changing user needs.
Ask them to tell you about their experience with your product as well as other products – what was satisfying about it, and what wasn’t.
Don’t expect your customers to tell you exactly what solutions they need but analyze their feedback for ideas of new problems that could be worth solving.
How do you recruit your interviewees?
Reach out to them in-app and offer some incentive, like a voucher or limited-time access to premium features.
Practice social listening
And it’s not limited to your own product. Listen to what they have to use about your competitors to identify their weaknesses that you could exploit.
How do you tune in to what users are saying on the grapevine?
The easiest way is to use a monitoring tool like Brand24 that allows you to track and analyze mentions of your (and other brands) products, and keywords across the web.
3. Seek input from employees
Your customer-facing colleagues are also a great source of information about a potential gap in the market.
For example, the customer support and success teams deal with customer problems on a daily basis, so they can help you improve user experience, while the sales team can give you ideas for new features that customers are looking for.
Don’t stop there!
Talk to the developers and engineers. They may not have direct contact with customers but they may be familiar with market and industry trends that you could harness to make the product more secure, stable, and reliable, and consequently, offer a better product experience.
4. Conduct market research to find business gaps
Market research seems like an obvious way to find market gaps.
Basically, it allows you to gauge what’s available on the market and how well it addresses user needs.
What research techniques can SaaS PMs use?
- Industry-specific surveys focusing on unique challenges in your niche.
- Customer segmentation analysis to identify underserved user groups with unique needs.
- Interviews and focus groups.
- Commissioned research (from market research firms or academic institutions).
5. Monitor market trends to gain a competitive edge
Monitoring market trends is another way you can pick up new market demands and get ahead of the competition.
How do you do it?
In SaaS, your customers are most likely to look for products online. Use Google Trends to track interest in keywords related to your niche. If you see interest in certain terms picks up, investigate further to see what causes it.
Industry reports are another source of information about unsatisfied user needs and opportunities that they create.
Take the State of SaaS Marketing report published every year by Userpilot as an example.
6. Carry out a competitor analysis
Analysis of the competitive landscape is an essential part of market research.
Its aim is to identify your key rivals in the market, the functionality that they offer, and how much they charge for it. Most importantly, it gives you insights into what they do well and what they don’t.
Start your competitive analysis by looking at their websites. Collate the information about their features and map them with a problem that they solve.
Start using the tools to get an idea of their strengths and limitations.
Focus on what is missing or can be improved.
7. Take inspiration from international markets
International markets could be a good source of ideas.
Search global markets as well as local niche markets for successful products that don’t exist in your market.
What problems or needs do they address? Do users in your market have similar pain points? If yes, this could be an opportunity for you.
Want to know the best part?
If you build the solution, you can sell it using the data from the other markets to demonstrate the product value. It will also be much easier to price them than new revolutionary products because you can use the pricing of the other products as a reference point.
8. Attend industry events and conferences
Industry events and conferences are other opportunities to keep up with market trends and potential opportunities that could arise.
Don’t know of any events like this? Here are a few product management conferences worth checking out:
- Product Drive (Userpilot)
- Mind the Product (ProductPlan)
- ProductCon (Product School)
Apart from these, look for industry-specific events, like Chiang Mai SEO Conference or eTail for e-commerce.
Many of them offer online access to the keynotes and talks, so you don’t have to travel across the world to attend. If you can, it’s totally worth it though, because they’re also an excellent chance to check out your competition and network.
What’s more, there are plenty of webinars and online workshops that can help you keep your knowledge current.
9. Forecast changes in the industry
Keeping up with industry trends will only take you so far. Ideally, you want to stay ahead of them.
How can you do it?
- Use predictive analytics to predict future trends and consumer behavior.
- Stay connected with your customers as they’re often the first to pick up changes.
- Follow industry thought-leaders – they not only spot changes but often drive the change.
- Use AI and machine learning to analyze data for emerging patterns.
10. Monitor legal and economic changes
Upcoming legal and economic changes are other factors to look out for because they often bring about shifts in customer needs and market dynamics.
The introduction of new legislation or changes to existing laws could necessitate changes in your product to ensure compliance.
For instance, a new law requiring stricter data encryption might mean you need to upgrade your product’s security features.
During economic downturns, businesses often cut back on spending, leading to a decrease in demand for certain SaaS products. Conversely, in an expanding economy, businesses may be more willing to invest in new software, creating opportunities for growth.
Therefore, understanding these trends can help you anticipate changes in demand and adjust your product strategy accordingly.
Next steps: What to do after identifying market gaps?
Once you identify potential market gaps, you may be tempted to act on the insights right away.
Hold your horses for a second though!
For example, to validate a product idea, build a landing page, use paid ads to attract your target audience, and start selling the product.
If it’s a new feature you’re eyeing, don’t simply copy what your competitors are offering. Instead, get to the bottom of the user problem and look for innovative ways to solve it. And once you have a solution, run a fake door test to gauge the customer demand.
Market gaps are opportunities to improve your product, deliver a better customer experience, and drive business success.
If you want to see how to leverage Userpilot to identify market gaps, book the demo!