In the last post, we looked at why trying to serve every possible customer type doesn’t necessarily lead to increased market share.
Today, we’ll explore…
Myth 2: Diversifying Your Target Markets Limits Your Risk
Picking a well-defined, narrow target market and ICP can be a bit nerve-racking. What if you pick the wrong one, or change your mind, or discover a better option down the road?
Despite these risks, marketers tend to agree on the importance of targeting. Yet many seem to have a hard time convincing their leadership team that going narrow, rather than wide, is the smartest path. In today’s business culture, more almost always means better—more hours, more effort, more opportunities. It feels safer to not eliminate options.
But the reality is that casting a wider net doesn’t limit your risk. It just hides it better. Think of your “net” as being the resources (time, money, energy, attention) available to engage the right prospects. The broader your focus, the bigger your net needs to be. But for that net to work as designed, it can’t have any weak points.
The weak points in your net come from the natural limitations that constrain every business. These limitations include:
- Your limited ad budget.
- The limited amount of time your sales team can spend prospecting.
- The limited number of customer problems any single product or service can solve.
Companies that go broad may seem to have a really big net. But if they don’t have the resources to keep the entire thing in good repair, it ends up ripping at random places.
Then, rather than resizing their net to make it more manageable, they end up arbitrarily limiting their focus to certain parts of it.
- The marketing team focuses their search ad budget on Market A, because their keyword analytics show higher traffic from that industry or customer type.
- The sales team focuses their outreach on Market B, because it’s easier to find contact info for those particular prospects.
- The CEO focuses on sharing thought leadership pieces aimed at Market C, because those are the prospects who happen to be most active on LinkedIn or Twitter.
The end result is fragmented, unfocused marketing based on random chance. The alternative is to create a smaller but more effective net designed to attract your ideal customers and make the most of your company’s greatest competitive advantage—your unique mix of strengths and solutions.