07 Sep The 2x TMC conundrum
What happens when you have two target market customers?
Businesses often say they have more than one target market customer. Which is a fair argument when you can make a case for equal expenditure comparative to other customers. But what does this mean for the resources you allocate to serving these customers?
If you allocate time, resources and people to serving both are you looking after them less well than if you focused on one?
Is your business set up to service one or the other better?
These are just some of the challenges businesses face when making strategic marketing decisions. I’ve often found though, that there is one common element in this debate…
Typically one customer will represent the way you have always done things, and one will represent the way you would like to do things.
In other words, you would like to focus all your resources on winning, retaining and doing the work for these fun new customers. But your balance sheet looks better making sure you focus on the ones you know how to serve well already.
It takes real courage to make the choice to say no to one of them.
The case for the existing customer – old faithful:
Your business already serves this customer well. Your services are set up to handle this customer, your systems and processes are proven and your people are familiar with them. You know what to do with this one.
But has this market of customers been steadily growing? Or is your growth slowing? Do you already have the majority of this customer?
The case for the new exciting customer:
New customer markets inject fresh challenge and energy into the business. Your newer staff can feel more connected to the growth and the journey with these customers. You have the chance to start with a fresh slate and do things the way you have always wanted to with the advantage of all your prior experience. But it’s risky.
Your older staff might not like this new direction. Your systems and processes aren’t proven or stable and there are bound to be mistakes.
The biggest mistake you can make is choosing which one to go with based on your current reality.
This decision needs to be made based on what you want for the business in the mid-term horizon. Think three to five years out. How do you want your business to look? Who do you want working for you and who do you want to be serving? Is there more opportunity in the future customer? The exciting new market?
Or are we staring down the barrel of a recession? Is it more prudent to focus on the safe customer and a steady balance sheet until we make it through another downturn?
Or does the impending downturn create a growth opportunity where you can secure new market share and come out the other side stronger?
You have limited money, limited resources and you are running out of time constantly. You can’t be all things to everyone, so think carefully about which target market customer has the best future and make sure you are cognisant of the wider economic environment and social changes.
Then be courageous and make a decision to throw your resources at your customer with the best future.