Learn how to expand the targeted customer segments for your existing offerings.
- Of the multiple ways to expand the size of the sandbox, where your company plays. One of the most promising is to broaden the set of targeted customer segments for your existing offerings. Big Dell, during the first 10 years, since its founding in 1984, Dell targeted only the B2B market. During this period, PCs was still a relatively new product. And most individual buyers felt the need to touch and see various PCs in the store, and get advice from a salesperson. In contrast, a toll free phone number was the only way that one could order a PC from Dell. This approach was perfectly fine for corporate customers, who had specialized IT professionals to decide what to buy, and from which vendor. By 1995 however, the landscape had changed. Most individual buyers now had enough experience to specify the components that they wanted in a PC and did not feel the need for advice from an in store salesperson. This was also the time when internet access started spreading like wildfire. Thus, people could see what the PC would look like right on the computer screen in front of them. Given these developments, Dell quickly expanded from the B2B into the B2C segment also. As another example, take Google's Gmail service. For the first decade, since the launch of the service, Gmail was targeted only at individuals. In other words, Google treated it solely as the B2C service. In recent years however, Google has been offering Gmail as a behind the scenes corporate service to enterprise customers. In short, Google now markets Gmail to both B2C as well as B2B customer segments. In brainstorming, and on the question of how to expand the customer base, for current products and services, it's important to examine two different pathways for doing so. As the Dell PC and Google Gmail examples illustrate, one pathway is to search for new customer segments within the geographic regions, where the company currently competes. A second pathway, is to search for opportunities to expand geographically into new regions. Dell and Google have followed this path also, and with some exceptions, such as Google, which is blocked in China, now have customers in almost every country on Earth. The brainstorming exercise, around the question of what new customer segments and, or new geographic markets to target would often yield much larger set of choices than what the company could or should pursue in one step. Pursuing too many growth avenues simultaneously, is extremely risky. In doing so, the company would be taking on too much complexity at one time, and it's likely to do a mediocre job at best in implementing every one of them. Building on the ideas that we just discussed, look at your own business, what are your current products and services? What are the new customer segments? A new geographic markets that might potentially serve as directions for future growth.
- Recognize the problems a company may encounter if it does not achieve growth.
- Identify high-potential opportunities for growth.
- Identify new customers for existing products.
- Use assessment screens to choose the best opportunity.
- Evaluate partnerships and acquisitions as mechanisms to fuel growth.
- Break down the components of an effective and growth-minded leadership team.