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One key element of strategy that is critical for all businesses—but particularly for smaller or early-stage companies—is the issue of choice. The choice I refer to here is deciding on an area of focus: What you do and don’t, what products or services you offer and what you don’t, and to which customer segments. It is important that you do not try to be all things to all people, as that just doesn’t work.
One client of mine in the prepared food industry had a unique product line that was particularly easy for customers to make and was very high quality. The modest-size company identified seven distinct market segments that could use their products and began selling to all of them. With limited resources, their sales force was stretched thin. The various segments all had very different characteristics, so trying to market to all of them resulted in messaging that wasn’t particularly on target for any of them. When we prioritized the segments by potential for volume and profits and focused marketing and sales efforts on those with the greatest degree of fit of the technology with their specific needs, the performance improved substantially.
Here are some questions to ask yourself to be sure you are making appropriate choices:
1. Do I know which product or service offerings represent my strongest value proposition?
2. Do I know which customers value my products or services the most?
3. Am I applying enough resources to deliver my best offers to my most important customers?
4. Which resources can I divert to higher-potential activities if I eliminate other activities?
Horwitz & Co.
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