Whitespace announces another collaboration agreement, this time it's with Sideways 6!
You might think that your product or service has a huge potential market or could be purchased by a broad buying group. You may even have calculated the size of this market within the Total Addressable Market (TAM) slide within your investor deck and is a hugely impressive number that has your leadership team and, hopefully, potential investors salivating. Exciting times!
Not wanting to burst your bubble, but particularly in the early stages of your business, if you focus on this broader TAM it could mean the end of your business before it’s even moved off the starting blocks.
It’s all about focus
At BULLDOG & MAPLE, we work with a number of start-ups and mid-sized businesses and regularly have the same conversation with founders regarding defining who their customer is and what markets/verticals are the best fit for their products and services. These conversations almost always result in the same answer and the ultimate issue. The target customer base is too broad and they are trying to target too many verticals at the same time.
If your business has 100K+ employees and operates on a global scale, this might be a great answer to this question, but if you are operating with 15 employees on a recent £500K seed investment, this answer should be very different.
While you absolutely want to be listening to the market and testing/evaluating where you can get most impact and traction, during the early stages (and arguably at all stages of your business growth) you should be spending the time to define your ideal customer profile (ICP) and who are the core personas within these organisations that you should be targeting.
This clarity and focus will allow you to allocate your resources where they will have the greatest impact and not dilute the overall investment you have to allocate into sales and marketing.
Having the confidence to really focus your commercial efforts into engaging with the right kind of companies that can afford and will get the most value from your product/service will fast track your growth and help you to build a more sustainable business.
Ideal Customer Profile & Core Personas
A significant amount of the work we do with clients when helping to shape their marketing and commercial strategies is around defining their ideal customer and core target personas. This is hugely insight/research-driven, but some simple steps can help you define your ICP, etc at a top-level. This is a great way to get started. You can then work with a strategy partner, such as BULLDOG & MAPLE, to finesse these further.
- Ideal Customer Profile
- Industry – which verticals are the best fit for your product and services? Have the confidence to de-prioritise certain verticals/industries. Education and health, for example, can be slow-moving, complex and highly price sensitive. With this in mind, do you revisit these in 24 months?
- Number of employees
- Revenue/turnover
- Geography – focus on the regions where you can effectively support the delivery of your service and manage new business prospecting, etc. It sounds obvious, but you don’t want to be flying from London to Madrid and Oslo in the same week trying to support customers and win new business until your business has the infrastructure to support this. Again, have the confidence to focus and only start introducing new markets/regions when it makes sense and the appropriate resource is in place
- Personas
- Map out the decision-making unit – who is an influencer. Who is a decision-maker and signs the cheque? Who is the user? Is there a gatekeeper you typically face?
- List these personas and map out the specific challenges they face within their roles. What are their responsibilities? Where do they go for information and support? What are their typical job titles?
This process will really help give you clarity around who to target, how you can add the most value to these customers and, ultimately, shape where you place your investments in sales and marketing.
As mentioned previously, this focus will give you the clarity to grow a sustainable business for the long term and not be constantly distracted by every ad hoc opportunity or shiny object on the horizon that comes your way.
This post is part of a short series we are running with the folks at WhiteSpace. Watch this space for our next post that is focused on lead generation.
In the meantime, if you want to chat in more detail about developing your commercial strategy, improving the effectiveness of your lead generation activities or defining your ideal customer profile, please do not hesitate to get in touch.
Tim Bush, MD — BULLDOG & MAPLE