In having worked with many entrepreneurial businesses, I have encountered a “fear of focus” on key customers based on a desire to have a broader market from which to draw revenue. In very formal terms, this is often spoken about as a “vertical market”. For purposes of our discussion, we'll talk about a vertical market as a group of companies that serve a specialized need that consumers have. Typically, a vertical market is tightly focused on the specific needs of one group of people. Vertical markets can be niche markets or they can be a concentrated market that has a wide customer base. I believe the concern that businesses have is that there may not be significant revenue potential from the vertical market they're serving, so they try to cast a "wider net". From a marketing perspective, you can prepare better targeted marketing programs for a well-focused vertical market. This can make your marketing efforts more effective than trying to reach or influence a broader market.
It's not to say that as a business grows it has to stay focused on a singular market, but I think there has to be a lot of consideration given to the potential loss of focus as you expand your marketing efforts outside your vertical market. Today most larger companies which pursue this type of expansion develop unique and focused programs for each vertical market. So what are the requirements to be effective with a specific vertical market?
- The business must have a commitment to understand meeting the customers’ long term needs.
- There must be a commitment to develop a strong customer service relationship, not just transactional business.
- The company must demonstrate a deep and thorough understanding of the vertical market they're serving.
For businesses, there are many great financial benefits to overcoming the fear of focus, including: ease of targeting, elimination of wasteful marketing efforts, and greater value from each customer transaction.
Don't let the fear of focus cause you to fall victim to the old adage that "the grass is always greener on the other side". This loss of focus can prevent you from realizing the great potential of the vertical market that you serve and make it an opportunity for your competitors.
