Your product doesn’t have one market

It has one segment that needs it and many that don’t. Finding it is the job.

I work at an IT consulting company that also sells its own SaaS. One of those products is a point-of-sale (POS) system for SMEs and corporates. For the longest time, our marketing took a blanket approach: ads that spoke to “your business” without naming which business.

When we finally narrowed our focus, we chose the spaza market. It felt logical. It was a massive market with thousands of shops and seemed like an obvious fit. We assumed stock management was a universal priority and that sheer volume would drive growth.

The spaza market quickly punished that logic.

Leads came in steadily, but our sales team complained about their quality. The frustration hardened into back-and-forth meetings between sales and marketing. The prospects who took up the system complained that the pricing was too high, and many stopped paying after a few months. We ended up questioning our pricing model when we should have been questioning our market.

The first clue arrived in a marketing meeting where we analysed our past ads. Our best-performing ad, the one with the most impressions and leads, was not a polished corporate campaign. It was a simple photo I took of a client in their business serving a customer, captioned:

“It’s Friday, but we are out in Klerksdorp for a client setup for a point of sale system, great for spaza shops.”

That ad pulled in spaza owners because people respond to seeing people like them using a product. While the leads came in, conversion stayed low. The reason took longer to become apparent: spaza shops don’t buy software that manages money; they buy software that generates money.

The most popular systems in that market, like Flash and Kazang, are money-makers wrapped in software. They turn a local shop into a mini financial services hub where owners sell airtime, digital goods, and process card payments. The provider earns a percentage, the shop earns alongside it, and nobody argues about price because the immediate cash benefit is obvious.

We were selling a “money-manager”, a tool for stock control and profit tracking, to people fighting for daily survival. To a spaza shop, stock loss is a nuisance, but cash flow is life or death. Once they realised our software wouldn’t actively make them money, price became a roadblock.

While I was still processing this, I came home one evening after my wife had ordered gas. The delivery driver hand-wrote our invoice from a receipt book.

Immediately, the alarms went off.

In the gas sector, winter is the peak season. Using manual invoice books means that somewhere in that company’s office, someone has to wait for the drivers to return just to reconcile paper receipts and calculate the day’s sales. The manual system can’t buckle because the business can’t afford it, but it’s put to the test every day.

What made gas interesting was how it blended our B2C (Business-to-Consumer) and B2B (Business-to-Business) challenges:

The smaller players operate like B2C. The owner is the salesman, the administrator, and the delivery driver. A targeted Facebook ad can catch their eye and lead them straight into our sales funnel. The wholesale depots have formal corporate structures and teams. They need a classic B2B approach: tailored sales calls and face-to-face meetings.

To test the B2B route, I called the owner of the supplier my wife bought from. I knew they already had a POS system, so I didn’t pitch that. Instead, I sold a single feature to pique his interest: our CRM.

I told him their manual tracking was costing them money, and that our CRM would show him their business’s geographical coverage, how many clients they served, how much their best clients spend, and how frequently they buy.

That hook got us the meeting. We ran the demo, solved for on-site invoicing with instant sync for back-office people, and closed the client on three licences and a hardware upsell. He referred us to another operator, who signed for two licences and hardware, and chose to pay for an annual license instead of monthly.

The digital campaign for the gas market is running now, with a hook that targets their exact anxiety around asset loss:

“It only takes a few cylinders to wipe out your profits...”

At the same time, “Klerksdorp formula”, using real-world field photos of gas setups, is lined up to double down. The leads have already started coming. Among them is a business with 5,000 clients turning over close to R2 million a month, run entirely off a single, unbacked Excel spreadsheet. One crashed laptop, and the whole operation goes dark.

All being said, the sharpest signal was pricing.

In the spaza market, price was the objection that killed every deal. In the gas market, every client we have engaged has told us the price is too low, and extremely affordable compared to what they expect software like this to cost.

It is the same product, sold at the same price. The difference is that we found a segment whose survival bottleneck we actually solved.

Three Learnings from the Pivot

1. Assumptions aren’t data. The spaza market felt logical because of its size, but logical assumptions are where margins go to die. We assumed stock management was their priority; it wasn’t. We only found the truth by testing.

2. Study your winners. Had we not dissected our best-performing ad, we would have missed our most important insight: people want to see others in their industry using a system before they trust it.

3. Cheap clients cost as much as good ones. The energy we spent chasing low-yield spaza deals is the same energy we now spend closing annual licences with hardware upsells, the same effort, radically different margins, and a sales team that has its confidence back.

   
   

We didn’t find this niche because we were clever. We found it because a manual receipt book made us look.