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Segmenting the Enterprise Market

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I am often horrified at just how poor many enterprise professionals are at segmenting the market for their services.  It is as if they believe that the ‘enterprise’ segment is already sufficiently well defined to enable them to engage efficiently and effectively.

In my experience there are great returnsto be had from spending some time in developing more effective ways of segmenting the  market. 

One of my favourites, and one of the most powerful models, segments the market place according to ‘Technical Competence’ and ‘Psychological Competence’.  Technical Competence refers to the degree to which the client has the technical skills that they need to develop their enterprise idea.  Psychological Competence refers to the degree of commitment, motivation, self confidence and self belief of the client.

In this segmentation clients may have a high or low degree of Technical Competence and a high or low degree of Psychological Competence.  This gives us four different market segments for our services:

  1. Low Technical Competence – Low Psychological Competence – Lets call this Type E1
  2. Low Technical Competence – High Psychological Competence – Lets call this Type E2
  3. High Technical Competence – Low Psychological Competence – Lets call this Type E3
  4. High Technical Competence – High Psychological Competence – Lets call this Type E4

The E1 client lacks both the psychological and the technical skills to realise their enterprise ideas.   Engaging E1 clients takes care and patience as it can be hard for them to take the risk of trying to make progress.  They need a lot of support with the technical aspects of developing their enterprise ideas and the work needs to be broken down into achievable steps.

The E2 client may be madly enthusiastic and quick to act – but lacking technical skills are prone to making all sorts of mistakes.  They need lots of technical assistance and a lot of emotional support too if the mistakes are not to undermine their commitment and motivation transforming them into an E1 client.  The E2 client may have been motivated to consider enterprise through clever marketing (my guess is that Enterprise Week will have flushed out a good few E2ers), they love the ‘Dragons Den’ type competitions. E2 clients require a lot of careful support over a long time period if they are to succeed.  They are likely to require frequent (if short) meetings with enterprise professionalsto keep them on track and to support them while they go on a very steep and sometimes challenging learning curve.  Their ideal enterprise professional will have both good technical skills and a good grasp of human growth psychology and its application.

The E3 client is a frequently overlooked market segment. They have good technical skills in enterprise – but they are not particularly motivated or committed. They may have been in business for decades, having started off as E2 or even E4, but never making much money in return for hours of hard work they no longer believe that enterprise is going to help them realise their dreams.  It has become just another piece of drudgery.  These clients are everywhere – but they don’t respond well to the ‘Have you got a brilliant business idea’ or ‘Dragon’s Den’ type marketing stunts so beloved of enterprise organisations and policy makers.  I believe this market segment could make a significant contribution to economic development in most communities – if only we could find a way to engage them and help them to get back in touch with their inspiration.  Community based enterprise projects that build a reputation over a number of years can start to engagethis kind of E3 client and produce remarkable results.

E4 clients are in some ways the holy grail.  Much of the effective enterprise professionals work is about helping clients move towards this E4 position.  Although high in both technical and psychological competence these clients still require help and support. They maybe ideal for referral to a good mentor or may benefit from access to a business support service on an ‘on demand’ basis.

Using this type of market segmentation can really help you to think through both your marketing/engagement strategy, the way you design your services and how you train your enterprise professionals.

Psychological and Technical Aspects of Developing Enterprise

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The vast majority of time and effort that goes into ‘supporting enterprise and entrepreneurship’ is focused on developing the technical skills involved.  You know the kind of stuff:

  • cash flow forecasting for dummies
  • how to develop a marketing strategy
  • making money from your hobby using e-bay etc etc

On the other hand very few providers think seriously about how they help people to learn to be more enterprising in the way they think, in the attitudes and beliefs that they hold, an din how they develop the resilience that enterprise demands.

Wepromote the technical aspects of enterprise ahead of the psychological aspects – just about every time.

But it comes down to this:

You train someone who does not think like an entrepreneur the technical aspects of business development and you have achieved next to nothing.

You train someone how to ‘think’ like and entrepreneur and you have one!  Bingo!

So let’s start to think hard about the way that enterprising people think, the belies that they hold and the assumptions that they carry – and lets learn how to help more people to develop and share this enterprising psychology.

Conviviality Counts!

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The very best community based enterprise centres are usually described as convivial – friendly, agreeable and welcoming. That is convivial to the people whom the centre has been set up to serve – who need to feel relaxed and at home in the space.

My favourite local example of this is perhaps the Marjorie and Arnold Ziff Community Centre in Leeds. As you walk in you are faced with a (usually busy) community cafe – full of friendly local faces, from all generations, enjoying food, drink and conversation. The reception desk is a modest affair on your immediate right. This is a venue where the people that the centre serves are likely to feel at home, relaxed and welcomed. It has been designed that way.

This is in stark contrast to some enterprise centres that are certainly ‘impressive’ but are perhaps not always convivial. Automatic glass doors opening into impressive atriums followed by a walk to a large reception desk situated in front of a wall of frosted glass panels staffed by receptionists in business suits with blue tooth ear pieces and large monitors on their desk tops. Impressive – but not convivial. Not to many local people. As a friend of mine commented, ‘to some people the gap between the entrance and the reception desk might as well be a shark infested ocean…’

We know the importance of making enterprise clients feel relaxed and open so that they are comfortable to talk openly and honestly about their ideas – rather than feel that have to put on a show to ‘fit in’.   Ernesto Sirolli tells the story of a woman who visited him in a university business centre.   She was like a fish out of water, tongue tied, embarrassed and not at all at ease in her environment.  When he arranged to visit her in her kitchen he met a woman transformed – relaxed, in control, articulate and confident in her own home. The description she gave of her enterprise idea was articulate, insightful and honest.

When I am training enterprise coaches I will get them to practice a  new coaching skill in a relaxed and informal setting – a garden or patio for example. I will then ask them to use the same skills in a more formal business meeting room. The change in quality is palpable.  They feel the difference.

Context matters, architecture matters, power symbols matter.

So when you are deciding where to meet your next enterprise client don’t just choose the most impressive local enterprise centre. Instead help them to choose a setting that they find convivial and welcoming.  One that is likely to help you to do great work.

You might find that the ‘impressive enterprise centre’ is better kept for when you want them to practice being out of their comfort zone.

Does the Credit Crunch Mean the End of Construction in Leeds?

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I have recently been hearing a lot about how the credit crunch is going to mean the end of construction as we know it in the city of Leeds.  And indeed there are sites where the tower cranes are now standing still.  So I popped over to have a chat with Peter Millar and Rob Wolfe at Construction Leeds to get their take on ‘Whither the Construction Industry in Leeds’.

It appears that reports of the ‘death of construction’ have been somewhat over exaggerated. Instead it appears that there are still plenty of opportunities for the enterprising construction worker.

You can listen to our conversation here.