Marketing Stamina & the Single Target Market – 2

B2B, Marketing, Marketing Stamina, single target market

To continue where we left out in yesterday’s post – you look for the highest yield within a niche and then focus on that for the long term till you get to dominate that market.

We looked at the examples of how even till today P&G’s Tide detergent powder is about keeping the Clothes whiter than white – even though they have been doing this for my guess is at least 40 years. And they have huge departments whose only focus in life, is to ensure people’s clothes stay white.

So they have segmented the market for washing clothes (usage) – between the ones preferring detergent powders to another who prefer liquid detergents. Then within detergent powders they go to the single target market of washing just white clothes

In case of B2B we look at the different possibilities of usage – so lets take an example of productivity applications. So you have applications via the web in a SAAS model on a monthly small license fee or with on-prem one time perpetual license. You could have within the productivity applications market, sales person productivity also…..so you have CRM companies bundling word processors and spreadsheets into their CRM so that the sales person doesn’t need to move out of the CRM at all.

So these companies are only targeting the sales person – anyone who’s not a sales person and not utilising “their” CRM is not a focus. This way they are ensuring that they are focussing on a very small segment of the market and working to utilise all their energies and funds in trying to dominate that market.

By focussing this way you will be able to play a longer game.

Till next time then.

Carpe Diem!!!

Marketing Stamina – Revisited

B2B, life time value, Marketing, Marketing Stamina, persistence

On the 28th of October last year I had put up a post on this topic. If you are interested, you can have a look at it here .

The reason I felt a need to revisit this topic, came up because, I was analysing the average time it takes to get traction for a new product or service in the B2B market. If you are in the technology market space I would highly recommend you read the book Crossing the Chasm by Geoffrey Moore. It will give you a more detailed context to what I am talking.

However coming back to the B2B market – the key issue that needs to handled is corporate inertia. In most cases the people in these companies are fighting so many battles, that they don’t want to touch anything that’s not broken. Also because there’s so many approvals involved, they don’t want to risk the product / solution Not Working in their environment. Especially in case of technology solutions, most companies prefer to work with “n-1” technology because it’s stable and working. They don’t want one more fire in their hand.

The other thing which plays a role in my opinion, is that the customer wants to see your resilience. They don’t trust anyone approaching them new, for the same points as I listed above and in most cases they are already covered with an existing vendor who is providing decently good service. So until and unless the incumbent screws up some time soon, they won’t look at you.

So does it mean that you can’t get into business for the B2B segment.

You absolutely can, if you can plan for the long term. You ensure that you have enough persistence and finances to last you for a long duration. While I learnt the term marketing stamina from Dean Graziosi, I learnt the application of this idea through Dean Jackson. His thought process is like this – if you know the turnover rate of any market – say 5% – 10% of the people will change to a new vendor every year – and you have a focussed list of 1000 prospects then over the next 5 years at least 250 – 500 prospects.

Now depending on what you sell and what is the Life Time Value of a client, you will need to have the staying power to last through the 5 years with consistently reaching out to these customers. If you don’t plan for this, you will be in for a rude shock and you will do things out of desperation, which is never a good thing.

Till next time then ….build your marketing stamina before getting into a new market.

Carpe Diem!!!

The best companies who could use my marketing advice

B2B, Business, Customers, ideal customer, lead generation, Marketing, Riding the elephant, single target market

I keep talking about a lot on the way you should identify the market, how you should target a segment and niche it . I talk about the challenges that come up when targeting the B2B space for a complex sale and how you can go about addressing them.

While most of whatever I talk about is overall good marketing practice, this is specially useful to people who own, run or work for companies who are less than $50 million in revenue, sell mid to high value products in the B2B space.

If you sell low dollar value items, then maybe a few things – especially about mapping different people in the organisation or structuring a value proposition or identifying the ecosystem may not completely be of value to you.

If you have already crossed the revenue of $50 million then chances are that you already are doing things and putting up systems which have helped you reach such a large turnover.

Its the companies, who are reaching about half a million dollars and want to break into the million dollar league and build processes which bring regular leads, who can benefit most from what I write. These would be my Ideal Customers.

All the concepts whether its the Single Target Market or the “Riding the Elephant” can provide immense leverage to companies who want to grow dramatically.

Till next time then.

Carpe Diem!!!

The calorific value of a rat – in marketing

B2B, Leverage, Marketing

A lion is fully capable of killing a rat and eating it. But it doesn’t waste its time in hunting a rat. This is because the calorific value of the rat is so little that it will spend more energy in hunting for the the rat. So it focusses on killing deer and antelopes.

I got into a deep discussion with my team on this topic today. I have quite an energetic team which does not accept my arguments on face value. They have to be satisfied with data to prove my point. So today’s post gets inspired by them.

You need to choose the markets in which you operate. If the payoff is not enough calories (large enough market which can give us sustained business) or there’s no strategic benefit to target a market, its better to avoid that market.

I would go one step further and want to identify first the most profitable market in what I want to sell. Lets take an example in the B2B space only.

Suppose I have only 2000 customers in my territory who are big and profitable who outsource a managed services contract for their IT infrastructure. Also suppose I know that there will be a turnover of 5% every year whereby these companies will choose a new vendor, which means 100 customers will identify a new vendor. Each customer can get me a sustained profit of say $100000/- per annum , so even if I am able to pick up 20 of these 100 customers (20% of the customers who will decide) I am able to make about $2m in profits per year from these.

Now on the other hand there are also another small 100000 customers who outsource some project implementation in IT. Also suppose I know that at least 10% of these will outsource – which means a 1000 customers will buy some project implementation. So you have a larger number of prospects to whom you can possibly give proposals. Most people would like to address this because there is a higher absolute number and therefore the chance of success seems higher.

So let’s go one step further and assume that here also we will have a success rate of 20% so out of 1000 possible customers you can get 200. This number is 10 times higher than the 20 customers you were looking for the managed services example. Now lets understand the amount of profit that we can generate is $1000. So after executing these 200 orders you will be making $200000/- or ten times less than if you were focussed high value customers.

The amount of effort in executing 200 deals will be much higher than in executing 20 deals and the customer satisfaction issues will also be much lower.

Its the same logic that the lion uses for arbitration and targets the deer rather than the rat for its meal.

Always look at leveraging the highest and best use for your effort wherever – in marketing or otherwise – the lion teaches us the same lesson.

Till next time then.

Carpe Diem!!!