When I was a kid, my dad used to take me to St. Louis Cardinal baseball and football games and to see Blues hockey. I can vividly recall learning at a very early age when and how you pulled the goalie, sent the runner (that cost me a dollar on a sucker bet with my brother) and read the blitz. Driving to the game, we listened to KMOX, a giant St. Louis sports radio station. Radio personalities Jack Buck, Dan Kelly, Ron Jacober and many others prepped us for the game in excruciating detail. On the ride home, we listened again as they analyzed the results and gave us a better understanding for the next game.
We were able to go to so many games because we owned a family business. When your family is in business together, work, play and life are all mixed into a way of life (not the cell-phone-driven, reach-you-anywhere lifestyle that is so common today). Before every game, we went out to dinner. Giovanni’s on The Hill was my dad’s favorite place, but we went all over the city. Everywhere we ate, my dad scrutinized the service, the parking, the food, the restaurant layout, the décor, etc. He was constantly scanning the environment to garner new ideas and validate his own. My dad was not a big talker. So, when he spoke, I listened.
One of his favorite subjects was marketing, and his favorite targets were the big brands on display at the stadiums. In between teaching the concepts of icing, pass interference and squeeze plays, he shared his thoughts on the products and their positioning. I recall one conversation on the subject of Busch beer (mind you, I was a little kid and we were sitting in Busch Stadium). Out of the blue, he said:
“Anheuser-Busch needs to drop “Bavarian” from the Busch beer can.”
“What’s a ‘Bavarian’?” my astute young self asks in return.
“The name has no relevance to the target market.” he responded.
“Right. What is a Bavarian?” I asked again.
He went on to explain that the historic name complicated the message of Busch beer for its main consumer: working-class American beer drinkers. Most beer drinkers did not know where Bavaria was, nor did they care about the origin of the recipe. Thus, began my education as a marketer. Snacks, banks or car dealers did not escape scrutiny. (By the way, A-B dropped the word Bavarian from the name several years later for the very reason my father gave.)
I share this story because understanding your target market is the most basic of concepts in marketing and is the foundation of any strategic marketing effort.
The ironic thing is that this simple concept is the primary reason firms never reach their growth potential and waste so much time and money in business development. I have found that firms simply don’t do it at all, they hang out an industry “shingle” and stop there, or they get very clear on it but lack the discipline to execute.
Firms that don’t do it usually lack the knowledge, the resources or the will power to make strategic choices.
Strategic choices have opportunity costs. Choosing strategic segments means not pursuing or allocating resources to others. Many partners think that focusing on clear segments precludes avenues to other growth sources and the revenues needed to achieve or sustain their partnership. This is a fallacy.
Firms with an industry focus fare somewhat better because there is a clearer line of sight to the unique needs of buyers.
Unfortunately, firms choose too broad of industries (e.g. financial services vs. investment management, insurance, retail banking, etc.) or they believe that because they have two “financial services” clients in their client base that they are industry experts. Either way, clients can easily see the shallowness of the industry programs and discount the “expertise” and the firm.
Finally, firms that lack execution discipline often end up pursuing the “deal of the day.”
I think the best illustration of this is mid-sized accounting firms. The firms have a clear understanding of their value (an alternative to Big 4 cost and arrogance) and their target market (mid-sized companies that do not want the Big 4 cost and arrogance). BUT, in reality, there is an irresistible pull inside the firms toward “upstream” growth and the desire to be number five and not a “Tier 2” firm. Both of these unspoken insecurities/ambitions drive behaviors that contradict a very strong focus and market positioning.
If you have neither segmented your markets nor identified your ideal client, you have not unlocked the key to growth and brand strength—focus. More often than not, the specialist in a market wins. Look at how the mass market of beer has come full circle and niche “Bavarian-like” beers are driving market growth today. Identifying your ideal client allows you to hone in on his or her unique issues, understand them, speak his/her language and build scalable solutions.
When you specialize around a market, an attribute, an issue or a client, you become very, very good at it. Identifying your key market segments streamlines marketing messages, simplifies lead generation, guides straightforward marketing metrics and helps existing clients refer more people to you. Most importantly, it demonstrates to your clients that you see their uniqueness and understand their business.
Take a word of advice from my dad. Understand who your market is, drop what is not relevant to it and then relentlessly pursue it. Time will demonstrate the wisdom of your decision.