Continuing in this series on why centralized marketing is failing in the mid-market, I will be discussing the failure to correctly define the mid-market and the pitfalls of "one-size-fits-all" customer segmentation (for a good angle on segmentation, see Needs-based Segmentation).
- First, let's talk about Market Sizing and Categorization. Enterprise companies frequently don't take the time to fully define the mid-market category - and there are actually at least three different size tiers to the mid-market:
- The top tier - these are large mid-market companies that are scaling rapidly - their needs are similar to those of enterprise companies - i.e. they have emerging IT organizations, sophisticated infrastructure, etc.
- The middle tier - these are small, rapidly-growing companies with a need to focus on scale but don't yet have the breadth or resources of the enterprise. They need solutions targeted to their needs, but can't afford or support enterprise solutions that are highly customized, or that require ongoing management, training, etc.
- The bottom tier - these are companies that until recently were small businesses, and are only just starting to put in place the capabilities to provide more robust processes and effective business management.
- Many organizations take a one size fits all approach to Vertical Markets and Customer Segmentation. Centralized marketing will look at customer needs and then categorize customers in vertical markets at the broadest level - like automotive or communications or financial services. However, there are many differences within a particular vertical category. For example, a "discrete process manufacturer" can describe not only a milk farmer who has broad operations in the central part of the U.S., but also a machine tool maker or a metal bender. Even though all three manufacturers "fit" within the same market segment, they all have unique business needs, processes and issues. Automotive provides a good example of the importance of segmentation within verticals. When companies say they are targeting the "automotive market" what do they really mean? Are they targeting regional equipment manufacturers? Assemblers? Distributors? Electronics manufacturers? You get the idea.
Coming next: How to gain a better understanding of the partner ecosystem and making sure your business proposition is aligned with the needs of your partners.
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