In a continuing look at re-mixing your business for efficiency as well as profit and reputation, how about the area of market segments?

What we’ve seen in the past couple of decades is a minute segmentation of markets, permitting new businesses to develop in the holes left by competition.  Take the magazine industry, for example:  today there are magazines that focus just on a single aspect of their genre that hadn’t even bee thought of a few years back.  Such as for model train hobbyists, where there is today a publication called “Steam in the Garden” which contains articles and ads for live steam locomotives ranging in size from about six inches in length to over two feet in length, operating in complete fire-boiler-steam mode exactly the way the full size locomotives of yesteryear!  There are today a myriad of motorcycle magazines offering a particular brand or type of motorcycle focus, such as “hogs” and “cafe racers.”

So, take a look at your business and see if there aren’t niches that haven’t even been dreamt of yet!  Ask, “what is impossible?”  Or, “what hasn’t been done?”  Or, “where might there be a market segment not being served today?”  Paraphrasing what Steve Jobs of Apple often said:  many times the customer has no idea what they want since th haven’t seen such a thing yet!  That was the genesis of today’s incredible I-Phone population.

Again, hope re-mixing helps you strategize innovatively in your business!

Best of re-mixing, Kraig

Here’s our next installment in “Re-Mix Your Business for Profit.”  Analyze your customer mix for those customers that “fit your operating model” best…those that you’re really geared to handling well.  This might be customers who have unique applications that your products fit best, or customers who are easier to work with, or customers who want the particular quality-level or style-of-delivery level you’re best at.  An example might be customers who like small, rapidly repeated deliveries, or maybe the opposite, namely large, seldom refilled orders.  You want to segment customers and your service-level to match each other.

Abnother example comes from the printing industry, where we specialized only in four-and-more color, very high quality annual reports, upscale catalogs and high-end advertising brochures.  We printed almost no tw0-color pieces, very few low-volume runs, and no lower quality (known as pleasing color)…only top quality high-coler-content printing.  This also made our customer care easier, since we dealt almost exclusively with professional print buyers and seldom with folks who only needed their printing once a year or even less requently.

How might you sort, dice, and slice your customer base to best fit what you do?  Do you actually know what you do best?  Of course it’s okay to be all things to all customers, but you should then do all of those things extremely well with all of those customers for your own maximum reputation and profit performance.

Hope this is helpful…more to come on product, market segment, and other re-mixing opportunities.

Very best mixing it up, Kraig

Fora ‘tweener to our 12-Seasons, how about we start to look at the hugely powerful tool of re-mixing your business to improve profit?  One example is my business: basically I’m involved in a mix of three different products or market segments, namely consulting with CEOs/Senior-Managers plus speaking to small CEO groups, and also speaking to large (100s-to-thousands) of managers.  As a recession approaches, I move my mix of business from consulting towards speaking, mainly to the smaller groups (8-20 CEOs or Managers in a group, where I literally do over 100 groups each year).  The reason:  recessions trigger a typical CEO knee-jerk reaction to cut advertising and consultants (obviously the wrong thing unless ads and consults aren’t working, in which case they shouldn’t have had them in the first place)!  

So, how can you change your mix of business?  Try looking at the product, market, customer, service, and other segments in which you now participate or could participate.  Figure out “What Causes Sales” (WCS) in each, then figure out how to predict how each will behave in the future (see our June 12-Seasons piece on “Looking into the Future”).  Next, activate your WCS to emphasize the area you want to pursue in different time periods.

Another way we changed mix was at the printing company:  we emphasized sheetfed printing early to dramatically improve profit (it is substantially more profitable) and then followed by building our other segment, web-printing, to “fill up” our plant 7-24-365.  the higher margins in sheetfed bought us time to do the latter.  Both examples are clearly strategic.

So, what is your MIX STRATEGY?  We’ll offer more on this in coming weeks and months at www.ceotools.com/blog — check it out regarding mix change in a number of different categories, such as product/service mix, customer mix, geographic mix, market mix, channel mix, specialty mix, services mix, and others.  We’ll also address the three components of gross margin and how to change your mix there between price/volume, and their interplay with mix.

We’re just hoping  that these ideas help you in your business!

With best regards,  Kraig

Please see our article on “Innovations” a few days back:  please add any innovations that you may have participated in that would help others dream up ways of innovating improvements in their businesses!  For example, when did you try the “impossible” and succeed?  How do you play “what if?”

Thanks for any and all suggested ideas, Kraig