"Our service is useful for all types of companies!"
"We will miss out on revenue if we focus on a single market!"
"Our sales teams are adept at selling into different markets - they create our differentiation!"
These are the assertions of the product or service focused organization, and by taking this position, many such companies will fail to grow even when market conditions point to a new opportunity.
I spent many years leading a marketing organization that sold products into virtually every market segment in the United States - from lettuce farms to legal firms and in every strategy session where the topic of market focus came up, we had the same argument: “If we focus on a single market, we will miss the opportunity to sell more products to more companies."
Recently though, I spent time doing a bit of product strategy work for a company that is focused on a single market, and it quickly brought me back to the truths I had learned earlier in my career about the power of market focus.
Here's why it matters:
Product or Service Differentiation -- The last 10% of the product development or service delivery mile is where differentiation happens. It's the naming of the tab or button in a software application. Or the features of the data exchange that meet specific regulatory requirements. It's the standardized reporting the customer needs and the unique knowledge base of the people serving the customer. Companies that sell across many different markets tend to focus on the 90% of the solution that can be used by every company. And they pay the price with a lack of differentiation and heavy competition - by focusing on the 90%, you look like 90% of your competitors.
Brand Awareness -- One of the biggest challenges for product companies is making their brand known across many segments. But individual industry segments are a close knit group, and often talk about the latest gizmo or trend that is sweeping the market -- for example: every major player in the food service industry has probably considered using digital menu boards at some point. But you can be sure that every brewpub in America knows who DigitalPour is…
"Helping Bars, Tap Houses & Growler Stations Maximize Sales
and Profitability with a Customer Facing Digital Beverage Dashboard"
Now compare this with the branding of a "product focused" digital signage company:
"When it comes to digital signage, it’s what we do. One system
supporting all components of your digital signage network and
delivering a unified experience."
See the difference? If I'm opening up a taproom - I know where I'm looking first for my digital signage... to the company that speaks my language!
Buyer Behavior -- Once you have discovered and documented the key buyer personas in a market, you can be relatively certain that buyers in all companies in the segment will act with relative consistency. The Director of Nursing in every hospital is almost surely dealing not only with patient care, but with employee retention, new graduate training, and improving the patient experience. They will have similar decision making and budget authority. And they probably get insight and information from the same two or three associations. Rest assured that if you can navigate the buying environment for one Director of Nursing - the cycle will be similar for all of them.
Repeatable Selling Opportunities -- Market focused product teams are in tune with the trends and needs of the market segment for which they are developing solutions. They know that if one food processor has a challenge caused by changing regulations - then they all do. Solutions that solve the problem for one account can be sold over and over and over again until every company in the market comes up to speed. Where there is industry change, there are repeatable sales opportunities.
Product or service focused companies can greatly improve their likelihood of success by concentrating their teams on the market segments that offer the best growth opportunities. It is the responsibility of Marketers and Product Managers to identify the best segments. These members of your team must understand the nuanced product features and market lexicon and become deeply intimate with the buyer personas who influence or make purchase decisions. In the end, this effort leads to repeatable revenue, faster growth, and a more competitive company.
To learn more - download the Issue Brief - "Why Your B2B Marketing Team is Failing".