Tuesday, September 9, 2008

Focus. Focus. Focus

I have been thinking and talking a lot about bowling alleys lately. And I’m not talking about ten pin and funny looking shoes, but rather the marketing and sales strategy set out in Geoffrey Moore’s book, Inside the Tornado. Moore’s theory is in my mind, one of the most compelling marketing strategies I have seen for small companies or start ups with limited resources, and I fully grant to him all the credit here for this thinking. Many of the clients I work with today are in these strata of development, and I often find myself coming back to Moore’s theories and recommending to my clients these three words – focus, focus, focus.

With great apologies to Mr. Moore, let me summarize in my own words my understanding of a bowling alley (or niche marketing strategy):

Take inventory of your customer successes and double down where you have had success. This requires (shock and awe!) listening to your customers (easy peasy – bet your competitors aren’t doing it). Interview them. Understand their business, their industry, their regulatory environment. Get a handle on the reasons they began looking for products like yours in the first place. Intelligent niche marketing is not about feature function wars, but about understanding the customer’s problem and uniquely solving it. This is the fodder for your marketing efforts and fuel for your sales team. Then look for prospects of similar profiles and show them you’ve done it before and how.

Position your product or service (my background is technology so I will use that frame of reference) as a unique solution to a business problem. This requires you to have a sound understanding of the challenges in a particular market segment, understand the consequences (financial, reputational or otherwise) of failure, and position your offering as something unique and better than your competitors. In my last company we had great success positioning our technology as a remedy for Sarbanes Oxley compliance. We took the time to understand the pain IT staff were experiencing in meeting SOX compliance, the regulatory requirements and kinds of IT controls necessary to meet COBIT standards, and then mapped the capabilities of our software as a remedy to this problem. We also understood the consequences of non-compliance. This background knowledge + positioning drove a lot of business to our door.

Aim your focus and messaging on a distinct market niche – in Moore’s words – a beach head segment. This might be a type of buyer – for instance IT operations groups, or a vertical market – financial services, or better yet, a combination of the two. In the example cited above, we learned all we could about the IT organization and the influencers surrounding SOX compliance. This led us to build messaging and positioning for CFOs, CEOs and CIOS as well as IT auditors, external audit firms, IT control advisors. We also leveraged our own CFO as a credible thought leader on this topic.

Play where you have experience. I see too many companies chase a segment because they think they can solve a problem there – or worse, spread themselves too thin trying to position themselves too broadly. Customer experience and reference accounts are absolutely critical in executing a bowling alley strategy. Enterprise buyers of software systems – especially IT shops -- tend to be pragmatic in their decision making and somewhere in the buying cycle they will want to speak to references. By focusing on a particular segment, you and your sales guys are given the opportunity to deeply understand the challenges and pressures of that sector. This allows your sales teams to lead a deep discovery with their prospects uncovering hidden business challenges beneath the surface. And finally focus on a particular niche is fertile soil for (the nirvana of marketing in my humble opinion) word of mouth marketing as happy users of your product migrate between companies, attend local networking meetings and generally talk amongst themselves. Can you hear the other bowling pins falling?

Critical mass has a fly wheel effect. You have established your company as a thought leader in a niche segment. And you have built up a solid base of customers and reference accounts. This in itself will create a gravitational force that will bring prospects to your door.

Don’t think this is a forever thing, or misunderstand this means you are only a vertical play. Nice marketing is about focus. It is about acquiring deep understanding and the development of expertise to enable true enterprise solution selling. It does not mean you cannot opportunistically sell into other segments or refuse business. It’s just about turning up the volume in one particular area. It’s about solving a clear and present problem that is acute in that nice better than your competitors. And it’s about building that reference arsenal and knowledge that drives leadership in a segment.