The most significant opportunities in business are often the most elusive. In design, we often interpret white space as merely the breathing room between elements, but white space is itself an element—one which shapes the framework of all others. Likewise, in business, white space both outlines the tested market and is itself a potential market.
True innovators recognize white space for what it is—an area of pristine marketing opportunity— and seek to harness it first.
What is white space in business?
In a mature market, competition can dampen the usual attempts to innovate your product or brand. However, there are always new areas into which you can develop. White spaces are untapped areas of opportunity that require an innovative product or marketing strategy to exploit.
| White space opportunities | Pitfalls of saturated markets |
| Create a new product or service geared toward an underserved segment | Create an undifferentiated version of an existing product in a saturated market |
| Expand into a geographic region with little to no competition | Expand into a competitive market without a unique value proposition |
| Launch a marketing campaign to reach an overlooked demographic | Launch a generic marketing campaign that attempts to connect with too broad an audience |
| Offer a novel customer experience based on known customer behavior | Offer the same customer experience as competitors |
What is white space analysis?
White space analysis is a strategic and creative method for revealing innovation and growth opportunities in your market. It involves exploring beyond the current industry paradigm, where conventional sources of inspiration may fall short. For example, studying other businesses’ success might help you understand their process, but you also risk overlooking the roles that circumstance (and luck) played in innovation.
So the fruits of white space analysis will be unique, hard-to-predict ways to enhance the value of your business. These broadly fall into two categories:
| Objective product solutions, which require you to redesign your product | Subjective perceptual solutions, which require you to redesign your marketing |
|---|---|
| Identify pain points and fix them in your products: -Introduce new features or functions -Improve product design -Expand product line -Improve packaging quality | Identify pain points and redefine them in your customer experience: -Introduce new brand messaging -Reposition product design -Rethink product ecosystem -Improve packaging presentation |
How to do a white space analysis
1. Understand your business holistically
Before you can identify white space opportunities, you’ll need to understand your business as a whole and what makes your position unique. Reflect on how your customers, employees, and competitors currently engage with your product and brand, and how these interactions impact one another.
| Product (objective) | Brand (subjective) | |
| Customers | -Do our products address the needs, preferences, and pain points of our target segment? -Do our products address needs, preferences, and pain points we didn’t plan to? | -How does our brand identity influence how customers perceive our products -Does our brand identity appeal to a segment that’s different from our actual customers? |
| Employees | -Do employees understand and agree with the value proposition of our products? -Does our strategy enable employees to deliver on the promises of our products? | -Do our employees align with our goals and mission? -Do our company culture and employee benefits align with our brand image? |
| Competitors | -How do our products compare to our competitors’? -What industry trends or developments are our competitors embracing or rejecting? | How does our brand identity differentiate us from competitors? -How can we evolve our brand identity and stay relevant in a changing market? |
2. Identify white space opportunities
External white space
External white space opportunities are innovation areas outside the current industry boundaries. To identify these requires the in-depth competitor analysis you began in step one.
Examples of external white space opportunities include (but aren’t limited to):
- Gaps in the market, where there’s little to no competition, or where customer needs are being underserved.
- Emerging market trends or spaces, like newly available geographic regions or demographic segments.
- New distribution channels, like ecommerce platforms or strategic partnerships.
- Cultural changes, like changes in customer preferences, values, or lifestyles.
Internal white space
Internal white space opportunities are innovation areas outside the current boundaries of your operations and/or product ecosystem. To identify these requires the in-depth employee analysis you began in step one.
Examples of internal white space opportunities include (but aren’t limited to):
- New systems, as in alternative workflows, production schedules, or company hierarchies.
- Product ecosystem changes, like new or updated products or features to meet evolving customer needs.
- Work environment, as in allowing employees to work on related side projects, adding new perks and/or benefits, or implementing a deep work culture.
- Sustainability initiatives, like altering product materials, embracing a hybrid work model, or going carbon neutral.
3. Synthesize and enact
Visualize and summarize your analysis for shareholders and employees. By this stage, you’ll be exceedingly familiar with the boundaries and dynamics of your business, so demonstrate clearly that you’ve charted opportunities beyond those boundaries and explain how you’ll adapt your business dynamics to capitalize on them.
With your employees, develop a plan to implement your new innovative strategies using the most promising product and brand solutions.
Tips for an effective white space analysis
Survey customers
Your customers, particularly loyal ones, are very good at identifying product and brand issues (but not necessarily solutions). Survey current, past, and potential buyers for feedback on product likes and dislikes, and how your brand differentiates itself against competitors. Compare this feedback to purchasing data, product usage, and other customer behavior benchmarks—disparities between feedback and behavior present white space opportunities.
Be honest and flexible
Involve your employees in white space analysis and listen to their suggested problems and solutions. Be willing to adapt your products or reorient your brand towards new customer segments. Embrace a long-term mindset when pursuing white space opportunities.
Don’t underestimate brand solutions
When faced with a product issue, the intuitive response is to improve the product itself. However, adjusting brand messaging is often far less expensive and can have a greater impact on sales. Product improvement is important, but reframing potential issues into customer benefits can also reveal further white space opportunities for your business.
| Objective product problem | Low-cost change | Subjective brand solution |
| Packaging is uninviting or expensive | Use more affordable packaging materials | Packaging is more eco-friendly |
| Brand is seen as low- or middle-brow | Change product aesthetics and/or charge higher prices | Your product is more premium |
| Customers don’t browse for long in-store | Offer comfortable chairs, magazines, or WiFi | Your store is more accomodating |
| Customers don’t ask for help with product issues | Issue staff uniforms or advertise real person support | Staff are more knowledgeable or exclusive |
Be unpredictable
You can’t glean white space opportunities from data alone. In fact, the impact of innovation is proportional to how unpredictable it was—if a strategy was predictable, you and your competitors would have already implemented it, with little impact.
Successful white space analysis involves creatively and strategically thinking outside industry boundaries. You can begin this inquiry in several ways:
- Focus and simplify. Redesign, consolidate, or ax different parts of your product ecosystem to strengthen your brand and encourage new customer behaviors.
- Play leapfrog instead of catch-up. Instead of spending resources to catch up when you’re behind, create the next evolution of an industry standard.
- Borrow from other industries. Consider how to incorporate aspects of other successful industries—even completely distinct ones—into your business.
- Rethink the customer experience. Rethink each step of your customer journey and how customers interact with both your products and brand.
- Rethink the employee experience. Redesign your work environment, policies, benefits, and culture to encourage wellness, engagement, and creativity.
Business checking that’s ready to help you take the next step.
