75 % or more of all companies in the upper end segment do not properly define their market – loosing business where its easiest to get it
One of the most common mistakes that companies make, often based on incompetent is to focus on the wrong target groups, if any. With out knowing your Targets, then 50 % of your working hours or more will be wasted.
I have always done my own preparations, since the quality of the work are crucial. Defining targets is about the work you put in to the details. I usually spend 2 weeks a year doing this, but in return, it saves you lot of time rest of the year, as well as improving your results enormously.
- Product Capability – Find out the product’s/solutions capabilities before defining your Target Groups, making sure you are targeting the right once.
- Identify total market – Start to identify and divide the total market potential according to industry standards, with out limitation. Use for e.g. Business Organizations to get the information. Just order the information needed for this purpose, which usually lower the price per post you order. I do order an excel list myself or comma separated list to import it in a third part software/CRM. The information i gather can differ, but is usually based on; Number of employees, Business Area, Adress, State, revenue and EBITDA, owners.
- Identify Segments – Use your list and divide it in segments, (quantity). The market is due to industry standard usually divided in three (1) segments, (Low-, Mid- and Upper end Segment), based on number of employees. Low – 1-50 Full time Head Counts, Mid 51 – 250 Head Counts, Upper 250 or more.
- Identify target groups – Identify Target Groups defined by Business Area Standard Codes, (for e.g. named SNI groups in Sweden), such as IT, Finance, Medical etc. When done create a detailed excel or likely and divide all corporations/organizations based on Size, Revenue, Area, Business, etc. Don’t forget to notify if it is a subsidiary which will be important when planning your strategy.
- Identify potential needs – Based on your list and ranking, start Create a table and (a) identify expected demands/needs that your product / solution fulfills for each target group, and secondly (b) create new solutions/services that can fulfill needs you haven’t thought of before. I usually use a point system, giving for e.g. ten points for for each identified need per target group, making it easier to fine the ranking list when done. The once with most needs you can fulfill, should likely be more interesting for you to target.
- Identify expected competition – Identify the competitors you will meet at that specific target groups to be able improve your propositions.
- Rank the Target Groups – Use your list ranking your target groups in prioritized order. I usually start with an Excel Spread Sheet, and it’s easiest is to first make a rough ranking to later enter and change it in more detail. Things to consider doing the ranking is among others things:
- Area (distance from you)
- Size (biggest is not always the best in terms om leed time, needs, potential margins, competition etc).
- Last Investment done in a competitive solution if they have any
- Most initial match due to your solution/product (initial need)
- Create value Proposition – Knowing what each target groups potentially needs/demands, the next step is to start planning a basic communication/marketing package for all those target groups, including your value points, a competitive business model as well as a strategic pricing included in the model for you to use in your communication, and start working with towards them.
- Prepare Marketing – Inform the marketing department in good time to create market packages / materials per target group.
- Strategy – Update your strategy to make sure you and your colleagues work in most efficient way. Decide how you will attract those groups in the best way. Arrange lectures, meetings, open house, guerilla events, or what ever you think is best. Go outside the box and always be very prepared and you will do great.
Once you have done it once, you will speed up next time, quite a lot. The step missing here is what is called product packaging and which in itself is both fun and important. This will be discussed in later sections. Product Packaging defines the basic product, add-on product, extended product, and value-added measures in a logical order. It works extremely well and it also requires the organization to understand why a price is communicated and why some parts can not be priced.
If you do all of this above, I guarantee that you will increase your Hit Rate % significantly, most certainly at least double it from last time. Then add Product Packaging, Strategic Meeting Planning, Strategic Business Models, tactical agreements and Strategic Pricing, and you’ll be the star.
Let me know if there is anything you would like to ask about,