How well do you understand your B2B target market & sector? In the last of his series for us, Peter Lavers shares the importance of market insight for B2B as well as B2C.
This is the 5th and final blog in a series that explores how different aspects of Insight can be used to drive B2B Customer Management.
Knowledge is the starting point for our Customer Attuned Assessment (CAA®) methodology, which is about building better relationships based on trust; working together for mutual commercial benefit. The sub-sections that sit beneath the model (illustrated) have been arranged to give twelve “golden threads” of critical CM capability.
These blogs draw from the international research exercise undertaken in summer 2015 regarding their relative strategic priority, and the CAA® benchmark database.
The ‘Target Markets & Sectors’ golden thread came out as 5th priority overall in the research. It is about how B2B companies decide which markets & sectors to enter, grow, reduce exposure, or exit. A company that has market & sector management as a defining characteristic of its corporate DNA:
- Drives competitive advantage through its expertise in and clarity of the market(s) where it decides to play and the sectors in each market that it chooses to target and develop
- Is disciplined about not expending time and effort on off-target opportunities unless there’s a high-level strategic decision to use the opportunity to open up a new target market/sector
The ranking by sector, region, business size and seniority are presented below.
It shows a range within the groupings from Manufacturing, who rate it as top priority, to only two groupings where it falls out of the top six (larger businesses and the Africa/Middle East region).
It shows that B2B is currently basing its market & sector-level planning on incomplete knowledge – indeed some companies are only just starting their journey.
However companies do not have to achieve perfection to be competitive in the sector.
Businesses that place market & sector management as their top priority should be aiming for a c.70% CAA® score. Those that place it in their top three should be strategically aiming for the upper quartile (56%+). “Focusing on appropriate target markets is the starting point for an effective business model and best use of resources” (Banking, Canada)
In order to score well, a business needs to have solid capabilities in the following areas:
- Have you mapped the way your market is structured?
- Are key drivers of growth or decline well understood?
- Is there good understanding of the most profitable parts of your market?
- Do you track the rate/extent of rising expectations?
- Is internationalisation seen as an opportunity or threat to your domestic business?
How about you? Do you have insights into your sector? Have you mapped your market & understood it’s dynamics?