Measuring Early Traction in the Japanese Market
Introduction
Measuring the traction of the Japanese market can be difficult. Without clear indicators of market traction, it can also be difficult to make objective decisions about entering the market or to understand how the entry efforts are going. There are a few metrics and indicators that can help gauge the market traction and evaluate the Japanese market. These metrics will also help with entering the Japanese market in phases.
Indicators To Gauge and Measure Early Traction
Traffic and leads are important metrics to take a look at when considering entering the Japanese market. Though these metrics may seem like simple metrics, they provide a decent starting point for the Japan market entry.
Traffic
The first step would be taking a look at if you have any traffic from Japan at all. If there is no traffic coming from Japan, then finding other points of conviction for Japan entry will be paramount. This can be done by understanding the market needs and product positioning through research.
If there is traffic coming from Japan, doing a deeper dive on the traffic will provide context on what the Japanese market is interested in. Using tools like Google Search Console and Analytics, you should relatively easily be able to identify the keywords that people in Japan are searching. You should also see what the pages that people are landing on. This can be the starting point in understanding whether the market needs of your product. If you have access to tools like Ahrefs or Semrush, you can add a layer of thoroughness to the analysis and get a more comprehensive reading of the market temperature.
Leads
If you have leads coming from Japan, that’s an even stronger indication that there is a need for your service in Japan. Most end-users prefer to use a localized product, so acquiring leads at this juncture is a highly optimistic sign of interest for the Japanese market (many companies are using AI translations for localization, but it’s important to understand the limitations). It is important not to get too excited though. These leads are likely innovators and early adopters and have an appetite for testing out new tools. Engaging these leads and getting market insight can help validate the need in the Japanese market.
The first step is to understand where these leads came from. Some of the leads can come from unpredictable sources. For example, it may be that someone has written a blog post on it. Having some attribution set up can help with this, but not everyone has this set up. If not, reaching out to the lead can be another way to get qualitative information on the Japanese market.
If you have access to a Japanese speaker, it could help to set up a call and get the lead’s opinion on the climate of the Japanese market. The lead was actively searching for a service and signed up even though the platform was in a different language. Understanding their motivation and accessing their local market knowledge can be a huge shortcut. Asking the following questions can provide tremendous insight into the Japanese market:
1. Why did they sign up?
2. Is the issue they’re trying to solve ubiquitous in Japan?
3. Is there a current trend to adopt a platform like ours?
4. How did they come across the platform?
Though it’d be great to generate revenue from these early leads, rather than treating them as a sales lead, accessing their information on the Japanese market may come with a larger payoff in the long run. Leads give a tangible metric to measure traction. They can also provide qualitative information on the Japanese market.
Researching Market Needs + Competitors Entering the Market
If traffic and leads are things that you don’t have access to, market research is a good way to measure the potential traction. The availability of software is limited compared to the US or Europe. By extension, the availability of software available in Japanese is limited compared to software available in English. There may be a gap in the market (and there likely is) that can be filled by your product. To understand whether this gap exists, conducting research is paramount.
Another angle that can provide qualitative context on the Japanese market is researching whether competitors have entered the market. Competitors entering the market can be an indication that there’s some market demand. The competitor has likely done their due diligence to validate the Japanese market. Understanding their positioning can help provide context in your decision-making. Tools like Ahrefs and Semrush should also be able to show whether the competitor is getting traction from a traffic perspective.
Conclusion
Pipeline and revenue are the most tangible metrics to measure traction in the Japanese market. Revenue will naturally be the most important metric to measure the success of the Japanese market. The precursor to the revenue will be the sales pipeline. That being said, identifying a need in the Japanese market through comprehensive market research can provide a foundational step in validating the Japanese market. Traffic and leads can also serve as an early indication of the market traction. It’s important to understand these metrics before committing to setting up a local entity and hiring. If you are interested in exploring the Japanese market, book a free consultation here.
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