Financial Data
Updated 26 Feb 2020

How a resource focus can improve performance

Be wary of spreading yourself too thin. Not all leads are worth pursuing. It’s actually often better to narrow your focus.

Ed Hatton, Entrepreneur, 26 January 2016  Share  0 comments  Print

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It seems logical to spread your net as wide as possible, to develop all available sales opportunities and markets if you want to grow.

But this only really makes sense if you are the dominant player in the market with an abundance of resources, one who can afford to waste resources on loss - making sales simply to deny them to competitors. For everyone else it is a bad idea.

Related: The ins and outs of influencer marketing

Focus is good

Military strategist von Clausewitz wrote: “Where absolute superiority is not obtainable, you must produce a relative one at the decisive point by making skilful use of what you have,” echoing the much earlier Sun Tzu maxim of concentrating your forces where the enemy is weak.

This military strategy applies equally to business. If you concentrate your resources and focus on a particular target, you gain many advantages: Sales costs reduce, and sales become easier through customer referrals.

Sales people become expert in the area and competitors recognise your expertise and go elsewhere, so your strike rate increases.

Customer support and administration costs fall and service levels increase. Your company becomes the ‘go to’ company in that market.

Alternative choices

Target -market

By contrast, trying to hit everything that moves is costly; implementation and procurement complexity increases, as does the risk of cancelled sales.

Your people become frustrated because they continually need to learn new industries and seldom re-use their expertise. Poor customer service is frequently an outcome and you lose the power of relevant reference customers.

There are some brave souls who choose a single sector, focus all their resources on it and will refuse to take any business that is not in that target.

Many business types have such adventurers, including legal services, specialist retail, automotive components, property and software systems, and some are immensely successful.

Other businesses will choose a focus sector and then increasingly move resources into it as success is achieved. They will take a sale outside the sector provided it does not drain resources.

If you do this, be careful, making exceptions is a slippery slope; there is a real risk that soon you will once again be trying to be all things to everybody, and that is a good way to lose a lot of money.

Qualify strictly or stick to the niche areas; learn to say no. Get rid of the products, suppliers and people who are dragging your organisation away from its chosen target.

Much of this concept seems applicable only to B2B sales, but it is also very relevant to a lot of B2C selling. Becoming expert in language, culture, buying preferences, what to stock and how to price for a niche market are powerful sales tools.

Focused marketing

To apply focused marketing you must understand the market and your strengths relative to your competitors. To select an area, analyse your strengths and study the sectors and buying patterns of your customers, looking for common threads.

For example, you may find you have a high number of manufacturers and distributors of home appliances as customers and they buy several different products with reasonable frequency.

Unless you are a start-up, always choose a sector where you have at least a couple of reference accounts.

Related: How Koo Govender’s personal brand produced more business

Study the chosen sector, talk to existing customers. There may be associations to which most members in the sector belong. Read about their issues and trends, list as many companies or individuals as you can with as much information about them as you can reasonably gather.

Consider a social media campaign which can be structured in very tight parameters. Train your sales and customer support staff on the issues, terminology and references in the target sectors.

Finally consider this from Robert Greene’s The 48 Laws of Power, Law 23: “You gain more by finding a rich mine and mining it deeper, than by flitting from one shallow mine to another.” Wise words to remember. 

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About the author

Ed Hatton, Entrepreneur

Ed Hatton is the owner of The Marketing Director and has consulted to and mentored SMBs in strategy, marketing and sales for almost 20 years. He co-authored an entrepreneurship textbook and is passionate about helping entrepreneurs to succeed.

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