Small is the new big
I’ll make you a bet. The next time you see a “Target Market” slide in an investor pitch deck or a marketing overview that has more than 50,000 companies or users or prospects, you buy me an iced Americano at your favorite coffee shop. If the number is less than 50,000 then I’ll buy.
Why is 50,000 the magic number? It sounds big and believable. The problem I have is that it’s neither. Sure, I see bigger numbers all the time. I recall seeing one deck that started with the fact that there are over 300 million Americans (…and we just two-percent adopted…). No one really believes that you can target 50,000 or more people effectively. It would cost too much to reach them all. When you do reach them, your message would be too generic to be interesting.
The most expensive part of your marketing funnel is almost always going to be the very top. That’s the part I call “Awareness.” You’re going to spend a lot more money getting people’s attention than you are in closing deals with people who already know you, like you, respect you and follow you.
What I’d prefer to see is your plan to reach the 1,000 companies within that 50,000 market with a specifically targeted message that builds empathy and community. You can own a market of 1,000 companies and make 400 of them your customers much more easily than getting 400 customer by mass-marketing to 50,000.
Going small provides a lot of benefits. Here are seven:
- Your product is better defined.
- Your customers will be better served so they will refer more business to you and your support costs will decrease.
- Your message will be tuned to resonate authentically and emotionally with your niche market.
- Marketing ROI will increase automagically.
- People will see you as a leader in your industry.
- You can charge more.
- You will be more attractive to potential exit partners who cannot crack the code in your niche markets.