Wednesday, July 6, 2011
Out of Market
Do you sell out of market? Come on, we can be honest here. So I guess the real question is, do you sell out of market on purpose or just because? In either case, stop it. Stop it now. Money is not equal to money. I’ll explain.
So every business has product(s) and service(s) they sell. These items can be used by certain types of customers. This is your target market. Because you are selling into this “perfect fit” market, a market that wants and needs what you are selling, your cost of sale should be lower. The time needed should be less. The custom work needed for implementation, less.
When you start selling into ancillary markets, you have to make your solutions fit. Your standard marketing won’t work, so you need to invest more. You have a longer sales cycle. You implementation will be longer. Retention will be harder.
So assuming you are selling the software and services for the same price in both cases, you will make much more money by selling into your target market. Even if you sell for 20% more outside of your target market, you still will not make as much as you would by selling exclusively into your target market.
So Money doesn’t equal money, no matter how you slice it.