Single Target Market – Who’s not your customer

B2B, Marketing, Marketing Stamina, Product Management, segmentation, single target market

I keep harping about the Single Target Market whenever you want to enter a new market. The Single Target Market helps you define your segmentation or niche very crisply, including the use case. Sometimes though its difficult to identify this easily because you believe your service is good for different people and you don’t want to miss any market.

When I am going no where with this discussion, I change track and ask the people, whom do you not want to do business with. So to use the analogy of the picture above you could start by eliminating the blue and orange soft toys.

So from a B2B perspective, we first identify which is the geography we would like to start with so that we immediately focus our energy on the most efficient geography, then we identify who would be the lousiest industries to work with – this could be because those industries don’t have the need or they don’t pay well or they haven’t reached the level of supporting infra for your product or service to work etc. This way we eliminate more than half of the universe that we could target.

So now we start moving forward. Out of the industries that we are left which are the top 2 in terms of spending in the area that we operate. You fish where the fish are, why make life difficult. With this you eliminate may be the remanning 30-40% of the market. What is left then is about 10-20 % of the market from where you started.

Now between these, which companies can you easily make an entry versus some extremely large companies where the hierarchies are so huge that you will never be able to make an entry. Then you would like to eliminate the companies who may not be able to afford what you have to offer.

So from the whole universe where you could market or sell your product or service you have now come down to less than 5% of the market that you started with.

From here it becomes a choice of selecting the kind of customer you want to do business with. Then you have to be relentless in your focus on these customers and have the marketing stamina for the next 2-3 years if you want to make any meaningful inroads.

This is a counter intuitive way to move forward but if we don’t narrow down our choices we will not be able to dominate the market.

Till next time then.

Carpe Diem!!!

Single Target Market – Once Again – Testing

B2B, Marketing, Marketing Stamina, messaging, Product Management, single target market

In my post yesterday I wrote about how deep these three words – Single Target Market -are, for a product or marketing manager when they are launching a new product or service.

Even if you have a checklist based on which you identify a Single Target Market, you still need to test if there’s actually a need for your product / service in that market. “You have identified a niche in the market, but is there a market in the niche” I don’t remember where I first read this quote but its absolutely critical.

Before that you will need to test if the message that you are conveying resonates with the market. You will need to test if the medium you are using, actually takes the message to the market which people notice.

So testing, as I emphasised in my posts multiple times earlier also, is absolutely critical for your success. You may do as much analysis sitting on your desk, its only when the “rubber hits the road” that you realise how good your actual planning isarke.

If you have thought through the Single Target Market really well, then you would have also hypothesised about the conversations going on in the mind of the prospects at different stages in the buying cycle. However whether what you have sent out as a message is resonating or needs to fine tuned can only be figured out as you start playing in the market.

Similarly you may decide to send out pamphlets, to the audience, but the audience prefers to see a message on the social media platforms, that also needs to figured out.

Last but not the least – there’s a lead time – for any market to convert. In the case of B2B the lead time is actually very long – sometimes even upto two years. Reason being most B2B buying happens after a lot of effort where multiple departments are involved. So there’s lots of inertia as well as processes that need to be closed before another vendor is brought in. In addition until and unless the incumbent vendor has really messed up, the companies you target will not like to consider someone new. If you have a new technology which the existing vendors don’t provide, they may still consider you, but the process is still very long.

For this you need to have a lot of marketing stamina to not only test but also for conversion of prospects.

So while the Single Target Market can make your market entry strategy very structured, you still need to prepare for doing testing and tweaking your message or your medium.

Till next time then.

Carpe Diem!!!

Product management concepts for a consumer company -2

B2B, differentiation, differentiation, ideal customer, Marketing, Positioning, route to market, segmentation, single target market

Product management is actually a much stronger discipline with consumer companies – both in the FMCG and White Goods space. What has happened with the e-commerce companies is that they have actually taken the whole consumer marketing concept to a different scale. Having said that, all the companies which are successful even in the e-commerce space, have followed the basics of marketing / product management to the core.

What started this series of posts was the fact that while these companies were burning massive cash, they were still enjoying heavy premiums when they get listed in the stock market. So is it that they are blindly burning cash or is there a method to the madness.

I highlighted some of the concepts in yesterday’s post. Today let’s look at other things like Single Target Market. Amazon today is a very big market place where they sell their own products as well as provide a platform for others to sell and take a commission on items sold. But Amazon only started by selling books initially. They did not try to get into selling everything at once. And they just sold books first in the Americas before expanding.

Look at another company Uber – they were only the ride hailing App. They did not get into the Uber Eats or the Uber Connect till they had taken a dominant position in that market. Similarly Zappos – which is now part of Amazon – was only into selling shoes.

Generally when I talk of concepts and give ideas for targeting the customers, building partnerships, I speak from the perspective of a small or mid-sized company which is wanting to get into the market. So some of the ideas are very specific.

However the same concepts at a different level are also applicable over the e-commerce space. So while Amazon is a big daddy in the retail products space, a small start-up in India “Nykaa” started with just selling cosmetics and related products to ladies. Today if you want even a French perfume in India, your first port (in this case App) of choice would be Nykaa. Its become such a big brand for the cosmetics and related categories. Similarly in the fashion space its “Myntra”. These companies segmented the market even within e-commerce and specialised in certain areas and have made a success out of it.

So principles of marketing and product management won’t change, what could change is the scale, the risk and the delivery mechanisms.

Till next time then.

Carpe Diem!!!

Diversification is admission of ignorance

B2B, ideal customer, Marketing, messaging, prioritizing, Product Management, segmentation, single target market

A few posts back I had written a post on how giving too many choices actually reduces the chance of success.

I used to hear a lot of gurus in the stock market talk about being focused with not more than 10-15 stocks to get the best returns. If you read the Wealth Creation studies by Raamdeo Aggarwal, he gives a lot of examples of how being focused can give much higher returns. If you want average returns then you can just take an Index ETF.

The other day I was listening to an interview of Garrett Gunderson with Joe Polish on YouTube. And he happened to mention this term in passing and it kind of stuck with me. Garrett has written a very nice book Killing Sacred Cows: Overcoming the Financial Myths that are Destroying your Prosperity.

Even in marketing if you try to do too many things trying to see which will succeed is because you are not sure of yourself either on your offering or on your market or a whole lot of other things. Most of the time we try to do multiple things at the testing stage to see what sticks and what falls. But once you start seeing what sticks you need to start improving on that. You can’t be testing multiple variables simultaneously. It never works.

You cannot be testing multiple offerings in different markets and also seeing which message works. I have done this at different times and flopped badly. Sometimes these were done because I fell in love with multiple brands and thought I could get them launched at the same time but then eventually realized I could not do justice to all of them. It was definitely my ignorance then. At other times I was in a tight spot and had to somehow get something moving and thought at least if a try so many things simultaneously, I will be able to get success somewhere.

Eventually I have come down to some very specific things for B2B marketing. I need to identify only one target market and niche it as much as possible when I am launching a new product / service. If your segmentation is done well and then you get your database / list based on that you have already come a long way. After that you test your messaging.

The 80/20 that I have been talking about in the last few posts is exactly the opposite of diversification. Its about focus and the knowledge which comes from focus. Like the image above, a few colors in a pattern can give a good look but putting too many colors on the same rug, assuming some one will like some color is ignorance.

Whether its finance or marketing or even other areas of your life you can spread your self, diversify and be shallow and ignorant or go deep, focus and be knowledgeable and get great results.

Till next time then.

Carpe Diem!!!