One of the simplest ways to identify new markets is through customer adjacency.
Customer adjacency occurs when companies identify other customer groups facing similar challenges to those already solved for existing clients.
In many cases, the underlying problem remains the same.
Only the type of customer changes.
For example:
A technology company that provides analytics for retailers may discover similar demand among logistics providers or supply chain operators.
A consulting firm specializing in construction projects may find its expertise equally valuable in infrastructure development.
In both cases, the core capability remains unchanged.
The expansion occurs because the customer base expands.
Advantages of Customer Adjacency
Customer adjacency offers several advantages:
Lower operational risk
Faster market entry
Greater revenue diversification
Because the company’s capabilities are already proven, expansion can occur more quickly than developing entirely new products or services.
Recognizing Customer Patterns
Companies often overlook adjacency opportunities because they define their business too narrowly.
Instead of asking “What industry do we serve?” they should ask:
“What problem do we solve?”
The answer often reveals multiple markets that value the same solution.
If you want help designing your category, apply for a Category Audit.
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