What’s in Your Wallet? 6 Questions on What Market You Are In

Do you know what marketplace your company is in? A lot of company leaders don’t. For example, you may say yes to an opportunity to get a contract even though the work you’re taking on may have nothing to do with the core strengths of the company.  You’ve come across a “bluebird” or a sales opportunity that falls in your lap and represents a chance for easy revenue.

Suppose a company sells relationship management software in a market segment relating to associations. The company knows how to serve associations. Then it hires a new salesperson who has a background in pharmaceuticals, and suddenly it sells software to the pharmaceutical industry.  If company leaders do not make a conscious decision to break into a new and potentially lucrative market, if they’re working in a market segment they don’t really understand, that’s dangerous. When companies work in segments other than their core market segments, it’s difficult to support, it’s difficult to make money at it, and it’s difficult to repeat the business, all of which means that they’re not only failing to add value, they’re actually creating what Geoffrey Moore calls “bad revenue” in his book Crossing the Chasm.

Business cases like these illustrate why any discussion about markets and marketing should start with the questions:

Do you know what marketplace you’re in?

Do you know what segment you’re in?

Does it have growth potential?

Who is your competition?

How well known are you?

If you’re in one segment and you’re planning to move to another, do you have a plan in place for the transition?

Seth Godin suggests that businesses should know “what shape their business development funnel is” and how efficiently prospective customers move to satisfied clients.  Part of this funnel is not just developing business, but also how well you deliver your product or service after the sale.  What’s in your wallet (business development pipeline) today will go a long way in determining tomorrow’s success.

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