By Mike Broderick
Co-Founder & CEO, Turning Technologies
A Hybrid Customer Base Can Help Your Company Weather the Storm
Depending on what type of business you’re in and your existing approach to market segmentation, you may have a very specific, narrow customer focus, or you may target a broad customer base with your business development efforts. Identifying your market “sweet spot” is a basic exercise in business planning, and there are a number of considerations that go into determining which industry sector to focus on and where to concentrate product development.
Should you have a broad customer base or a narrow one? There are pros and cons to both strategies. If you narrow your focus, it will theoretically be easier to identify specific customer challenges and develop solutions to address them. On the other hand, a specific customer base leaves your company vulnerable to factors affecting your target customers’ industry – imagine if you’d built a business around supplying VHS manufacturers, for example.
A broad customer base makes you more impervious to random market factors, but the downside is that it can be more difficult to target customer needs with specific product features and sales strategies. The best approach may be a combination of the two: A strategy that serves multiple markets with a broadly applicable product and service portfolio.
When planning and launching our company, Turning Technologies, our team consciously pursued a hybrid approach to the customer base. I’m confident our strategy, which included focusing on a flagship product and selling it across distinct market segments, was instrumental in allowing us to grow into the world’s leading response technology company and thrive even under the most challenging economic conditions in generations.
Our product, TurningPoint, is an audience response system that integrates with Microsoft PowerPoint to allow presenters to poll audiences and gather real-time data. Presenters can embed questions into their PowerPoint presentations, and audience members can respond via keypads or smartphones, sending data that is aggregated instantly and can be displayed on screen in chart form if the presenter chooses. It’s very easy to use – we designed it so virtually anyone who can use PowerPoint can use TurningPoint.
We created a product suite around TurningPoint that appeals across markets, including government training and education (K-12 and higher) as well as the corporate training sector. For us, the key to successfully appealing to diverse markets was to identify common challenges in the different sectors. In our case, it was the pain points faced by all presenters, regardless of the material they’re presenting. All presenters hope to engage their audiences, and virtually all are interested in generating data and viewing audience feedback.
With these common challenges and needs in mind, we positioned our product as the solution, segmenting markets and targeting the education / government training and corporate training sectors. We worked with a PR firm to generate coverage in trade publications as well as general news outlets, appealing to readers in the corporate training space as well as government and education sector professionals. We established ourselves as thought leaders, telling a story that resonated with our target audience and providing real-world solutions that measurably improved their results.
In contrast, our competitors in the audience response space chose to concentrate on a single market sector – government / education or corporate training. While their focus may have helped them sharpen their appeal to their chosen customer base during good times, those in the corporate training sector were ill-prepared to weather the storm when the 2008 financial crisis brought spending on employee development to a virtual halt. Many went out of business.
Corporate training business slowed down during that period for Turning Technologies too, but because we also serve government and education sector clients, we were able to continue generating profits and even benefit from stimulus spending. As the private sector began to recover and corporate spending picked up, we were able to regain and grow market share in that part of the business. The green shoots on the corporate training side helped us weather a subsequent downturn on the government and education side when stimulus spending evaporated.
Every business and market has its own unique challenges and opportunities, of course, but our experience offers a real-world example of how a hybrid approach to market focus can work. For Turning Technologies, the key was to develop a product suite with broad appeal and deliberately cultivate separate market sectors. As our case illustrates, companies that successfully create relationships across more than one customer segment have a built-in advantage for long-term growth in an uncertain economy.
About the Author:
Mike Broderick is cofounder of Turning Technologies and serves as Chief Executive Officer. Mike began developing applications for the first radio frequency wireless group response hardware soon after its introduction as a partner and president of one of the earliest group response software companies. Throughout his 20 years in the industry, Mike has been one of the leading innovators in the group response industry working and leading efforts in sales, marketing, research and development, as well as product delivery and fulfillment. He has led Turning through remarkable growth and to their current position of dominance in their industry and markets. In addition to his contribution to Turning’s remarkable success and multiple product and company awards, Mike is a recipient of the prestigious Ernst & Young “Entrepreneur of the Year” Award and was inducted into the Northeast Ohio Business Hall of Fame as the first winner of the “Entrepreneurial Spirit Award”.
For more information, visit http://www.turningtechnologies.com/