Question: How did your company find their niche, determine their ideal client and target their market?
Startup Army Answer:
All of these things come down to understanding opportunity cost and focusing in the areas with the most ROI for your company, which isn’t always the obvious choice. For example, if you have a client who wants to buy 2000 units of your product but wants a 40% discount, and you have a very set capacity for production and plenty of smaller clients who can, in aggregate, purchase at least 1200 full price units, then not withstanding the additional overhead of managing the clients, you’re better off not taking the deal with the large client. In this case, unless your client management costs per account are very high, your ideal client is not one who can buy bulk at a lower rate, but one who can buy reasonable volume at full price.
Even without a hard product, I found this to be true in my consulting company. We have six Senior level executives running the business, with the ability to hire Junior people for the projects we take. If we take on projects that require one of our Seniors to work full time for 2 months, it means that the rest of us can no longer benefit from his/her services during that time and they cannot manage the Juniors that we hire in their department. That means our pool of the kinds of clients we can take on goes down and that we can no longer benefit from hiring Junior people that the Senior level manager is capable of overseeing.
That said, we’ve found that we want clients who can utilize a wide range of services and whose projects allow us to hire additional project consultants on whom we can earn a small markup. More projects with more people working underneath us means more reveue and a maximization of the time for our business leaders.
Once you figure out who is a great client for maximizing your bandwidth and making best use of all of your resources, targeting the market is a matter of traditional marketing, networking or publicity, and which one works for you totally depends on your product or service.
If you want more detailed advice about this, I can certainly explore this with you. Let me know.
Joey Flores
EVP of Marketing and Business Development
StartupArmy.com – Bring in the heavy artillery
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