Question

Topic: Strategy

Target Market Hell

Posted by Anonymous on 1/3/2005 at 6:14 PM ET 250 Points
Hello:

I'm the CEO of a technology consulting company located in NYC, New York. We help our clients to grow their businesses through the appropriate use of technology.

That said, we need help determining a target market to implement in 2005. The dilemma is, should we pursue small businesses/independent professionals or mid-market firms in verticals that we've researched and found to be attractive (finance and health care, etc.)?

Our background is with small businesses and independent professionals but we'd like to 'upgrade' our client base and we're really getting tired of 'fighting for dollars'.

Here are some of my musings (which may or may not be on-target):

If we go for the small business/independent professional market:
-the sales cycle is shorter
-we can keep our marketing materials as is
-they cost less to reach
-we can use this market to 'ramp up' and reach the larger markets later on (maybe?)
-our fees would be less but we could probably make up for it in volume (probably?)
-we can use our existing marketing campaign
-a good deal of client education would be required because this market is not 'sold' in a wholesale way about the benefits of approaching technology in an organized, proactive fashion

However, dealing with larger clients would mean:
-longer sales cycles (red-tape and bureaucracy, etc.)
-we need upgraded marketing materials and image (not that hard but would require time)
-would cost more to reach them
-we don't have much experience with these size clients
-our fees would be higher but there would be less clients (I'm assuming this but could be wrong.)
-our marketing plan and approach needs to be kicked-up
-less client education would be required because this market has already identified a need for the services we offer.

Or, maybe...is there a creative way that we can target both? Or, would that approach be bad for branding?

Anyone have any ideas for an approach/solution? Thanks in advance for any clarity you can offer. I hope this post wasn't too confusing. :)

-webchhk
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RESPONSES

  • Posted on 1/3/2005 at 9:16 PM Author
    Richard:

    Wow, I wasn't thinking about it like that. Thanks for the alternate perspective!

    Let's say we go with your approach, what should our marketing materials look like/say? I mean, with that approach we essentially have two target markets...so who are we 'talking' to? How can we talk to both without sounding confused and muddled in our message?

    Thanks again,

    The webchhk
  • Posted by ReadCopy on 1/4/2005 at 5:28 AM Accepted
    It might be useful for you to look at a small piece of analysis.

    Create a 2 x 2 matrix.
    Down the left hand size mark off how much your customers spend with you .
    Across the bottom, mark off how much you customers have to spend on the services you provide.

    You should end up with a simple matrix that shows your customers and more your customers who have a lot to spend on your services, but spend little with you.

    Many are surprised at the potential within their exisiting client base. I am not suggesting that this should be your only strategy, but you should be following a "wallet growth" strategy.

    The old addage is right, its easier to get more from exisiting customers than it is from new ones!

    Good Luck
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