One of the primary mistakes made by brands is focusing too much on themselves – extolling their main services, achievements, and people. This self-centric approach often makes us forget that the business revolves around customers, not ourselves. This isn’t a business problem, but rather a matter of psychology. After all, is it enjoyable to hold a conversation with a person who begins every sentence with “I” or “We” and always emphasizes their own persona? Wouldn’t it be more pleasant to participate in a conversation where the other party is interested in our needs and strives to understand our situation, asking questions that build a connection?
The same applies to brand building and communication
Let’s shift our focus from ourselves to our audience. Our first step towards approaching our customers is acting based on business sectors, which yields the following benefits:
Better understanding of customers
Market segmentation allows companies to better understand the diverse needs and preferences of customers in different sectors, enabling a better match of products and services to their needs.
Increased competitiveness
Adapting business strategy to suit the specifics of various sectors enables companies to compete more effectively by offering more tailored solutions and leveraging the unique characteristics of each sector.
More effective use of resources
Focusing on specific market sectors allows companies to use their resources, both financially and human, more effectively where they have the greatest chance of success.
Better identification of trends and opportunities
Analysis of business and market sectors helps companies recognize growing trends, changes in customer preferences, and new business opportunities, resulting in faster response and an advantage over competitors.
Risk diversification
Operating in various market sectors can help companies minimize the risk associated with a drop in demand in one sector or changes in industry regulations.
Improved customer relationships
Tailoring business strategies to specific sectors helps companies build deeper relationships with clients through a better understanding of their needs and offering more personalized solutions.
Increased profitability
Focusing on the most attractive market sectors can boost profitability through more effective resource utilization and better alignment of offerings with customer needs.
Even though these benefits seem evident from the start, many brands still aren’t leveraging them. Why? Simple – fear. Analogous to the popular phenomenon of FOMO, many companies believe that they must be present everywhere not to miss any customers.
But is this actually possible? Can we be understood by speaking to everyone in the same way? Spending 100% of the marketing budget on “all” sectors, can we achieve the same brand image impact as using 100% of the budget punctually on two or three sectors?
By specifying who we want to reach and what these individuals truly need, we increase the chance of better conversion and more accurate enquiries. To “defuse” uncertainty, we need to thoughtfully go through the process of selecting the appropriate sectors.
The first step is Porter’s Five Forces analysis, which helps determine the profitability of a sector
- Entrants – the greater the entry barriers, the higher the profitability.
- Suppliers – the better the suppliers’ position, the lower the profitability.
- Buyers – the more, the higher the profitability.
- Substitutes – the more, the lower profitability.
- Competition – the more intense, the lower profitability.
The next step is to determine the key success factors – identifying the competences that influence success
Moreover, if we’re talking about an established brand with a history, we need to examine this history and identify specific recurring patterns:
For example, analyzing the profitability of acquired customers, the types of customers we work with, the sectors we most commonly service, where we achieve the best results, and the types of customer acquisition.
All these tasks mean that building a business strategy based on market sectors can be a key element of success for many firms, particularly in a dynamic and competitive business environment.
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