Concentrate to Dominate. How a bit of focus can lift your business performance

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1 Concentrate to Dominate How a bit of focus can lift your business performance

2 Become very focused on a couple of areas and learn to differentiate within the couple of segments. Over time you will learn what area is best for you and develop your platform to deliver better than anyone else. Have the budget then double it. - Market Measures 2013 participant 346 New Zealand companies completed the 2013 Market Measures survey. It benchmarks the way Kiwi technology companies take their products to global markets and looks at what attributes are associated with high growth, i.e. what kind of sales and marketing approaches make customer acquisition more efficient. These attributes were identified by taking all the variables benchmarked in the study and identifying statistically significant associations with turnover growth. The second of these attributes to stand out was market focus i.e. the more firms exported to specific country the higher their overall growth. How can focus lift your marketing performance? HARNESSING THE SUN The US Department of Energy has estimated that enough energy falls on the earth from the sun every day to power that country s homes and businesses for 30 years. If only it could be concentrated. We all know the immense physical power of being able to focus energy, and it is no different in marketing, of which the 2013 Market Measures provides further evidence. Data from the study showed that focussing on a specific country is associated with higher growth rates. Focus means consciously selecting a market, i.e. a set of connected businesses with a similar level of buying interest (not necessarily by geography, it could equally be by industry or some other factor), and concentrating your sales and marketing activity on it. Focus also means saying no to potential business. Selecting a market isn t easy. When you are striving hard to grow and expand, it seems counterintuitive to reject sales opportunities, but the reality is the wider you choose to spread your marketing effort the less effective it will be. It is one of the hardest marketing decisions you ll make. But all companies, no matter how large, have limited resources and these resources need to be 100% focused on as specific a market as possible to achieve the maximum gain. Everything becomes aimed at a particular group of customers the sales process, promotions, the support process, the product. You save time, effort and money and the focus makes things happen. Take the dreaded business concept of networking. Turn up at some event with a Page 1

3 few hundred people and it is very hard to get to know everyone there, and for them to know and like you. If you chose four or five people to get to know, a much stronger relationship would be likely. The more you focus on a group of people, the more likely they are to focus on you. Marketing your product or service is no different. This commitment to focus is becoming more important as customer choice is broader than ever. They have more information than ever before about those choices, and can access it every easily. In a world of empowered consumers and proliferating numbers of products, the answer is not to shout louder but to be smarter about your marketing. That is built around a great understanding of a discrete group of customers and focussing all of your efforts on them. Once you have prospered in that niche you can move on to the next. Two Kiwi tech companies that recently listed on the New Zealand stock exchange are examples of the power of focussing. Early in their history SLI Systems, a provider of online search products, sold to a relatively broad range of customer types across multiple geographies. They really started to gain momentum when they chose to concentrate on e-commerce firms in the US. SLI are now dominant players in their niche in the US, and are growing fast in other markets like Australia and the UK. Wynyard Group also went public recently. They emerged from that factory of innovation, Jade Software, taking some IP and smart people to concentrate on the risk and security market. Although it is early days for Wynyard, they have achieved impressive momentum. The focus strategy becomes important when you are exporting. By finding, focussing on and dominating a niche, no matter how small, you are much more likely to get sustainable growth. Trying to sell one product into five markets is the equivalent of selling five different products. That s because a product from a customer s point of view is not just what you have produced, but all the things around that, how they learn about it, how they assess and buy it, how they learn to use it and gain value from it how they continue to remain current with it. From market to market these needs can vary widely. Page 2

4 THE BASIC STRATEGY QUESTIONS Determining what to focus on requires thinking through some basic strategy questions. 1. What is the core customer problem your product solves, or to flip it around what is the main contribution your product makes to the life (or business) of a typical customer? For a software vendor it might be about helping a certain group of customers make specific types of decisions. What market segments have the highest demand for meeting this need? People reject focussing because they are concerned about what they might miss, but simply focussing on something is more important than making the perfect choice. You might not be harnessing the maximum energy from your marketing, but at least you are harnessing something and getting some momentum, and that s all anybody wants out of their marketing programme. 2. How attractive those segments are to your company? How large and potentially profitable are they, where are they, how easy are they to locate, what level of competitiveness is there etc. 3. What is your firm s capability? What sort of resources and skills do you have to maximise the opportunities, where do you have sales staff or channels, where are your best reference customers? Page 3

5 About Market Measures Market Measures was founded in 2009 by Concentrate Limited as a national study that benchmarks the sales and marketing activity of New Zealand s technology companies. The aim of this survey is to give Kiwi technology companies useful information for planning their sales and marketing strategies. Since 2011 Swaytech has supported Concentrate in producing Market Measures. In 2013 Market Measures principal sponsors are: This year s survey has also received support from The New Zealand Hi-Tech Trust, NZICT, The Canterbury Software Cluster, The New Zealand Software Association, Auckland ICT, Taranaki Technology, and Priority One (Tauranga). About Concentrate Concentrate is a marketing consultancy that helps Kiwi technology companies develop strategies for finding and penetrating profitable market opportunities. Using our industry experience and a set of proven tools we deliver market clarity for technology companies - practical, actionable insights into their marketing challenges. About Swaytech Swaytech is a marketing and communications practice dedicated to unlocking the innovation and growth potential of B2B focused companies. It offers a full range of services from public relations and communications, marketing strategy and execution, to print design and full web design and development. Page 4