I just hosted a webinar introducing the second edition of my book, 42 Rules for Growing Enterprise Revenue: Practical Strategies for Increasing B2B Customer Relevance.
Watch the webinar to get a quick overview of 7 strategies for becoming more relevant to customers:
- Selecting markets where you matter
- Focusing on customer interactions rather than your org chart
- Using context to define and articulate value
- Collaborating with customers
- Moving from products to solutions
- Exploring vertical market alignment
- Empowering your sales channels
Enjoy, and let me know what you think!
Ways to Matter More to Customers, Lilia Shirman from Laura on Vimeo.
When you are promoting something to clients because its been proven to work, its healthy to keep a lookout for exceptions.
Industry-targeted initiatives are a big theme in my work. I tend to promote specialization (of marketing, solutions, sales, etc.) as a path to B2B sales growth, a fact backed up by experience and extensive primary research. But I’m a contrarian by nature, so I’ve been looking for situations where it just ain’t so.
I found one in the clouds. Computing clouds.
The core value of cloud computing is that a utility model aggregates demand for computing resources across many users, creating a smoother demand curve than any single user can have alone. Which in turn allows cloud and managed services vendors to provide the resources more efficiently, with better utilization, and (so the claim goes), greater reliability. This concept is as old as Edison’s first electrical plant. Supply electricity to the cable cars with strong usage in the morning, the factories that run during the day, and the homes that need power at night, and you get a uniform demand throughout the day, despite fact that each segment individually creates a peak.
That’s why, if you’re offering resources in the cloud, your value is in having a diverse and balanced customer base. A service provider with too many retail customers, for example, is going to find themselves in a heap of trouble come November.
So how do cloud providers get a deep understanding of their customers without focusing in on target industries? A few initial thoughts:
- Understanding customers’ industries is still important for defining value to customers
- Providers acting as utilities must pick multiple segments at once – specifically ones they have very different usage profiles
- If a cloud operator doesn’t have the resources to dive into multiple industries at once, it should keep to horizontal marketing and sales
This is probably the most difficult for those at the top of the cloud stack – the SaaS vendors. Apps are less generic by definition than infrastructure and platforms. So I’m very curious to know what strategies SaaS vendors use to keep their demand smoothed out.
We just sent out a summary to the participants of this year’s Industry Specialization by B2B Vendors Benchmark Study. We had a record 120 B2B companies take part in this year’s study.
Companies see that greater customer focus, in the form of industry-specialized sales, marketing, services, and products will enable them to access more senior decision makers and increase deal sizes. Many are also responding to competitive pressures. The good news is that the investment is paying off.
The full report is due out next month, but meanwhile, a sneak peak at a few tidbits:
- 67% of B2B companies that already have some amount of industry specialization said they plan to further increase their focus on key vertical markets.
- It takes two to three years to begin to realize the full benefits of specialization.
- After 2 years, 70% of companies reported notable or significant impact on revenue from their investments in industry-specialized activity
- Industry alliances have a big impact on brand awareness
- Industry-specific case studies and quantitative ROI analysis were reported to be the most valuable industry-specific marketing tactics. Sales and marketing brochures were least effective.
What advice would you give small companies trying to prioritize target industries? Robbie Baxter of Peninsula Strategies, an expert in on-line, recurring revenue streams, asked me a this very interesting question!
At companies with a sales history, industry-specific activity and resources are focused in two kinds of areas: Where most revenue is coming from already (this is by far the more common focus area), and where there is greatest opportunity for growth in the future. There can be lots of complex analysis, but in reality few big companies do much proactive planning. That’s a whole other blog, though.
With a smaller company, the first part of that equation is missing. They don’t have the sales history, references, and channels to naturally leverage into an already-active vertical market.
So, here is a try at some things I’d look at as a small business deciding where to focus.
1. What industry will value what you do most? Where will you impact mission-critical results?
2. Over time, what group of customers are going to be needing you more and more (and feeling increasing pain you can solve) due to external pressures and trends in their industry?
3. Where are you best able to access the financial decision-makers? (This is a combination of your company’s existing connections and lists, and the target industry’s propensity for doing business with small companies.)
Note that its easier to find ways to reach financial decision-makers than to change the core value of what you do or convince an industry to focus on non-critical issues. Unfortunately, many small companies start with #3 as the first, not last criteria for selecting target markets.
Please comment with your own thoughts on selecting target industries at small companies.
