Author: animeshjmathur

Customer segmentation by usage

differentiation, Marketing, Positioning, Product Management, Sales, segmentation

One of the flaws of identifying a niche by doing pure demographics is painting all customers with the same brush.

My suggestion for identifying a niche is to first segment by demographics and then segment by usage.

Lets say you are a company which provides backup and disaster recovery services. There are a whole lot of companies who can put on their brochures that they provide backup and DR services.

All it needs is a company which has some backup software and access to the cloud platforms to say that you could provide a DR solution.

So how can you differentiate your company’s offerings.

How about offering DR to users of ERPs in zones which are prone to hurricane activity. You could talk about how you are geared to move complete IT operations of your customers to another site in case a hurricane strikes.

Your messaging then becomes very specific to those kind of customers. You then look at what all are the possible options that the customer has to achieve the same objectives. Something similar to what Clayton Christensen speaks about the job of the Milkshake

Based on this you further fine tune your niche and accordingly build your messaging and your go-to-market plan.

This was a B2B example from IT. Tomorrow we will take an example from the consumer side.

Till then.

Carpe Diem!!!

Growing your business in the niche – Part VI – identifying your constraints

differentiation, Marketing, Positioning, Product Management, Sales

In part V we spoke about identifying different channels to reach your prospects.

To grow any business you need to identify the one key constraint which could hold you back.

In professional services its your time, in manufactured products its the time of the slowest machine, products which are dependent on natural capacity like farm produce or eggs are dependent on the the capacity of the farm or number of hens respectively.

If you can plan your business based on the constraint – highly recommend reading the Theory of Constraints by Eli Goldiratt and his second book The Goal – then you can take better decisions.

So if you are in professional services, and you can only work 8 hours a day, you need to figure out which is the niche which can help maximize the return on your time. If you’re a property / real estate agent then you need to focus on the segment where you can get a higher value for your listing as in designer homes versus condos.

Or you build partnerships so that your constraint can be a leverage to someone else.

Till next time.

Carpe Diem!!!

Arrogance versus Self Confidence

arrogance, jealousy, mindset

I thought of taking a break from just talking about marketing.

Those of you who follow my blog know that I like to identify the differences between words in English and how they get used. An Oxford dictionary is still among the prized possessions in my library.

I was listening to a talk by Sean Stephenson on the Ilovemarketing mastery program by Joe Polish and Dean Jackson.

He brought out an important point on Arrogance versus Self Confidence.

Which led me to the dictionary again and this is what I got at the meriam-webster site and I have taken it from there and posted below

Definition of arrogance

: an attitude of superiority manifested in an overbearing manner or in presumptuous claims or assumptions

Definition of self-confidence

: confidence in oneself and in one’s powers and abilities

Sean’s take was that people with confidence have a tendency to always want to improve themselves and keep increasing their capabilities which increases confidence further.

On the other hand people who are arrogant are always trying to prove a point to others or to themselves.

What was more interesting was what he mentioned after this. Can people who are confident about themselves come out as arrogant to others.

As per him if someone thinks of your self confidence as arrogance, then it means they are jealous of you. Which is the price for being successful.

Bottom line is if people are jealous of you then you know you are being successful. And if people are not jealous of you then maybe you are not playing a big enough game.

Till next time.

Carpe Diem!!!

Growing the business in a niche – Part V – Identifying channels

differentiation, Marketing, Positioning, Product Management, Sales

You would have noticed, I have not spoken about advertising as part of product management launch or sustenance. That is because I believe that broad level brand level advertising is a big waste of money. Especially when you are a startup or a small company or a company launching a new product.

It is always better to utilise the funds that you have to keep improving the product based on incremental customer feedback. My agenda would be to operate on a shoe string budget and let your marketing and sales fund your business

This situation could however be different, if you have Venture Capital funding and the agenda is to create awareness even if you lose money on every transaction. Some products which follow the so called “network effect” could definitely make use of this kind of product launch.

Which brings me to todays rant for growing your business in a niche, using different types of channels/partnerships or media to reach out to your customers based on your acceptable cost of acquisition.

Yesterday we identified that if you can sell 10 deals at a gross margin of $10000 per sale you make $100000/- as the first time GM on every first deal with a customer in the first 12 months.

The next piece of arithmetic – after all, all business is arithmetic – you need to be aware of is – to get 10 deals in the first 12 months how many prospects will you need to reach and how many times to be able to get 10 of them to do business with you for the first time.

Which brings us to the next concept of what Dean Jackson calls “invisible” or “visible” prospects. Like the picture above if you know in which forest you will get the tree, the forest is visible, the specific tree has to be found. If you have chosen banks as your prospects to whom you would like to sell your product or service, then they are semi visible. You can identify the banks but within that, the exact person is a little difficult to ascertain. On the other hand if you are selling eggs in a locality, then you know the 2000 houses in the locality (visible prospects), you need to just reach out to them.

On the other hand anyone could be a customer for paintings (invisible) and finding them from within a large population could be very tough.

For visible and semi-visible prospects I would suggest finding partners who are selling to those same customers already and figure out a way to share the margins with them. The number of partners you can and should build will be a function of the number you get from your Life Time value calculations.

One word of caution – partners take a long time to actually start giving you business – so you should see how you can get them business first,.so as part of what Robert Cialdini calls the principle of reciprocity, they feel obliged to start giving you business.

Tomorrow we will look at what other mechanisms you could look at for getting both visible and invisible prospects.

Till next time…

Carpe Diem!!!