When solution companies begin peddling their products or services, they typically build a target market as part of their marketing strategy. Many times the target market is either small businesses or large corporations. But there are a substantial number of companies that fall somewhere in between. These midmarket companies can drift toward a small business classification, or they may be on the border of large company status. If a solution provider wants to target midmarket businesses, how can they be defined?
Below are some methods that may help to better define midmarket companies for your marketing and business strategic planning:
Revenue – one of the most common criteria to categorize a business is their sales volume. Some use the measurement of small business is under $10 million in annual revenue, midmarket is between $10 million and $1 billion, and large companies are over $1 billion. The sizing based on revenue for your specific target audience may need to be adjusted based on your overall market revenue range. Revenue can be a difficult measurement because many private companies do not divulge their annual revenue numbers.
Employees – the number of full time employees is another metric used to categorize a company. Under 500 employees, according to the Federal government is a small company. To define your midmarket you can pay for survey data with this information, or you can take time to conduct your own survey as part of an introductory sales call or lead qualification process.
Geography – some may categorize businesses based on their service area or territories. In the field service industry, for example, a company that services a radius of over 500 square miles could be considered large, while a company that handles between 100 to 500 square miles could be categorized as midmarket.
Products or Services – businesses that have a large service offering or product mix could be categorized as a big company, where a business that only offers a handful of services could be a small company – then the midmarket would be somewhere in between.
Every industry will have a different definition of their midmarket. Plumbing companies, for example, could be categorized based on the variety of services they offer. But electrical companies might be grouped based on the number of employees or trucks used. In the automotive repair shop industry, a shop is ranked based on the number of service bays that the location has.
To define your midmarket, look at your industry and browse some trade journals to see what criteria is used – odds are there is more than one way. Then, choose one or two metrics that make the most sense for your specific service offering. Once you have your measurements, you can begin building a list of prospects and start qualifying leads.
A mistake that can happen with many businesses is defining a midmarket target audience that is too large to absorb. Consider your sales and business capacity, and narrow your leads so that there is a manageable number to keep your sales force busy while also keeping the business running at a smooth and productive pace. You can always expand later.
By clearly defining your midmarket and then keeping a focus on your target audience, your business can realize a more productive sales force and a prosperous bottom line.