Marketing advice is very easy to dish out. Do you ever get the impression though, that those giving the advice rarely (if ever) have to convince a sceptical CEO or backers to actually accept that advice?
Take for instance, the line, “Define a specific market segment and focus on it”. For the vast majority of tech solutions aimed at the commercial market, this piece of advice will be a sound one. From a marketing perspective, it’s not difficult to see why this makes sense – not least because the sheer amount of resources required to make any kind of headway with a mass-market IT product are vast in comparison to attempting to engage with a smaller audience.
Now look at it from the perspective of a business owner itching to unleash his project on as many people as possible. Generally, choosing a niche market effectively eliminates marketing it to whole swathes of potential customers; a fact that’s often cheerfully glossed over. It’s a big ask. Choosing the right niche is vital if your product is going to compete effectively and increase its market share, but glib analogies talking about the merits of a larger slice of a smaller pie might not be enough to convince those in your organisation who are instinctively drawn to a more spray and pray approach. To back up your efforts, bear in mind the following…
Software-as-a-Service: a game changer for IT marketing across the board?
Regardless of whether your particular product fits the SaaS model, it’s increasingly likely that your customers will increasingly be using off-premise, mostly cloud-based software in their organisations. This means they are exposed to a certain way of doing things, including how tech providers engage with them. A very recent PwC white paper demonstrates some of the implications of this for software companies, including how marketing is likely to adapt. Increasingly, maximising customer retention will be coupled with the need for more personalised sales to lower the cost of acquiring customers. In short, your competitors are likely to be working hard to determine the most appropriate channels to market to tightly defined groups.
Having got those customers on board, the emphasis switches to building a strong partnership with them; understanding and responding to their needs with the aim of maintaining the service contract. It’s personal, it’s focused on customer success (rather than merely product expertise) and it’s likely to be viewed either consciously or unconsciously by your customers as what to expect from a tech provider.
How do I build market share in 2015?
Never before has it been more important to resist trying to be all things to all people. To engage effectively means identifying the concerns of your customers and understanding the specific stages a customer goes through before making a purchase. Customers are looking for something more than a sales pitch: they have very specific need states and questions they expect you to answer. Say you are developing a case management system that could in theory be pitched to a wide range of professions. Market research quickly reveals that what accountants require for customer success is markedly different to what lawyers expect. You then find that what litigation lawyers require from software is different to what conveyancers need. You may also discover that the best channels to reach these various sub-groups are subtly different.
Choosing a specific niche or niches then becomes tied in with questions of resources. Do you have the horsepower to be able to curate very focused content aimed at answering the concerns and providing a service for multiple sub-groups within a specific sector? Probably not (in the early stages at least). The logical conclusion is to focus your efforts on one narrowly defined market. Choice of niche is then determined by a range of very specific factors that could include the characteristics of your specific product, your market segment experience, market maturity, existing penetration rates and likely returns. Careful analysis here will enable you to choose wisely – and carve a niche for your product.
Staying ahead of the competition
As PwC highlighted, detailed analysis of customer experience and usage is going to be increasingly important. Do this right (and assuming, of course, that your customer services and R&D departments actually speak to each other!) and client feedback on the product’s strengths and weaknesses can be used to inform rapid improvements to your service – helping you stay ahead of the game.
What’s more, this data can be a valuable resource, helping you to develop add-ons, up-sells and complementary subsidiary services – all informed by the niche-specific knowledge you have built up.
Against this backdrop, can your organisation afford not to focus on a specific niche in 2015?