Why prioritize your markets in your marketing plans?
Determining your business objectives and deciding which target markets to pursue can sometimes feel like a game of chance. We don't want to miss any opportunities, and so the temptation is to say yes to everything. "Fake it till you make it." But what is the real cost of pursuing every opportunity that may present itself?
When you pursue every opportunity in front of you rather than prioritize and focus on a niche, you miss the real value that you can provide to your clients and customers. When you try to serve everyone, you are unable to delight anyone. You will be busy, but not accomplishing much.
Or in the case of planting tomatoes, you get a lot of leaves, but no real fruit.
Prioritizing a market and the services that the customers in that market find important is a process of elimination. The question you may be asking next is how do you prioritize but at the same time diversify? What if in your hard focus on a niche you become a commodity and unable to expand into new markets?
The short answer is that once you have delighted that market and created evangelists for your company brand, that is what will give you the resources to penetrate the next market. Remember also that focusing on a niche doesn't mean you only do one thing, or the same thing, that you have always done. If you focus on the customer first, you will understand what products and services to provide to them to solve their problem.
Similar to when you prune tomato plants, you are removing the excess growth that would otherwise hinder the fruit that you want. Regular pruning of your products and/or services is what allows you to see the branches that bear fruit. It also enables you to see where problems might come up with pests or poor soil (or customer retention problems).
The next question is how to prioritize and focus your market analysis. Many marketing experts will tell you the following:
- Determine the market size. How much money is being spent or will be spent in your industry? How many potential buyers are there?
- Estimate the market growth rate. How many people are expected to buy? There are many free resources available to help you determine your potential market size and growth rate. The higher the growth rate, the better your chances of increasing your market share.
- Sales channel availability. Building brand-new channels to reach and serve new target markets takes time and resources. If your objective is short-term, then don't focus on market segments where you don't have existing channels. In short, if you want to sell to a market, look at your existing connections and start there. If you don't have the connections there, then you need to start building them or change your target market.
- Cost to serve. How easy is it to reach potential customers? How much time will it take to serve them? How much are they likely to purchase and how often?
- Cost of market entry. If you don't have the exisiting sales channels, what will it cost in time and resources to reach them and customize the products for the market?
- Competition. How many, and how large, is the competition for the product and service in the target market? If it is a new and emerging markets, high competitive density is a good sign of viability. However, in mature markets it should be avoided.
And while all valid and should be considered, it still doesn't tell you what you need to know in order to prioritize. Here is where the twist comes in.
Prioritizing the markets you should go after starts with you. What do you excel at, and who cares about that? And when you want to add more value to what you do best, what compliments that? What does your market, or customers, find most valuable? How do you discover that? Do you choose what products or services to offer based on what you competition is doing, what the latest trends are, or on what your prospects and customers are asking you for?
Share your tactics for prioritizing your markets, what has worked for you and what hasn't?