One of the first steps in marketing should always be to define your target market is.
When we first meet with a prospective company we ask, what is your target market? Often we hear back, “This solution is good for all verticals and sizes of companies”. As an initial strategy, focusing on everyone is not a great idea. Early stage companies are usually short on the two R’s, revenue and resources.
Focusing on a specific target market allows companies to have the best chance to grow revenue while making the best use of their internal resources. The big question is then, how do you pick the right target markets? Below you will find some recommendations on how best to pick target markets.
One of the first steps in marketing should always be to define your target market are:
Who Does Your Solution Benefit the Most and Why?
Customers are typically interested in solutions that help to grow their revenue, improve productivity, or decrease costs/expenses. You will need to determine the industries that your solution can quantifiably help the most.
What is the State of Competition in that Target Vertical
Some verticals have significant competition or strong competitors. It is better to find an initial vertical with fewer and weaker competitors.
Can you Generate Enough Revenue in that Target Segment?
Some solutions may be a good fit for a number of target customers, but the revenue generated does not allow your organization a sustainable business model. The clients might be too small or need too much customization to allow for profitable success.
The reason you focus on a specific niche segment is to gain some brand awareness in that group. You can leverage the closed accounts and start to build mindshare about your company and solution. When starting out it is hard to build credibility and belief in your solution. Reference clients and the awareness of your solution in a vertical can help grow sales faster. Once you have conquered a segment look to an adjacent niche where you can leverage your customer references and contacts.
Remember the key is to focus, focus, and focus.
As always, comments and suggestions are welcome.
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