Go deep or go wide when targeting customers to grow your business
There are two ways to pick your buyer segments: you can go wide or go deep
"I've just been hired as Global Head of Marketing and I have no idea which buyer segments to pick!" she told me in a semi-panicked state.
From Toronto, I spoke to my client based in Singapore.
She had just been brought onboard by a European healthcare software startup to expand into 6 new markets across Asia, North America and South America.
She didn't need to tell me she was scared - I could already tell from her eyes and tone of voice.
My client had worked in large corporates her entire career, with all the support and infrastructure that multinationals provided their employees.
So this was an unfamiliar experience for my client. This was the first time she had been tasked with leading a Go-to-Market (not to mention, six at the same time) all by herself without backup.
"Relax," I said. "Let's make this decision-making easy for you by boiling it down to the fundamentals. There are two ways to pick your buyer segments: you can go wide or go deep."
What is going wide versus going deep?
Going deep is:
- Pursuing more customers within the current segment(s) you're selling to; and/or
- Increasing the frequency of their purchases; and/or
- Increasing their average transaction value
For example, think of Netflix converting more and more cable TV viewers to their service. Or how Apple increased the Average Lifetime Value of its existing core customers by selling them new products such as iCloud, Apple Music and Apple TV+.
On the other hand, going wide is pursuing customer segments you are not yet selling to.
An example of going wide is Zoom. The company originally targeted the corporate market but expanded to also serve individuals and small businesses when covid skyrocketed demand for reliable and robust video conferencing services.
How to decide between going wide vs going deep
Go deep when you still have untapped opportunity in a customer segment.
Why?
Simple. Because at a minimum, you've already developed:
- Marketing and sales messaging that resonates with that audience
- Customer relationships that you can turn into referrals
- Awareness of your brand in that market
In my client's case this meant going after more of the same (or similar) private medium-sized to large medical groups in Singapore because this particular segment still had plenty of untapped opportunities.
In sales parlance, there was plenty of white space to grow within the segment.
In many cases, it's easier to go deep than wide exactly because of the immediate 3 reasons above.
On the other hand, go wide when all your current customer segments are tapped out in terms of growth potential, or when you want to diversify your customer base.
In Singapore, compared to the number of private medium-sized to large medical clinics, there are only a handful of government-owned healthcare groups.
Most of the healthcare institutions within these government-owned groups are already using solutions so there are much fewer white space opportunities.
Rather than pursuing this particular customer segment that is potentially lucrative, but already saturated by well-entrenched competitors, my client would be better off going after different segments.
In her case, she decided to go wide by instead pursuing medical schools in Singapore.
Finally, can you go wide and deep at the same time?
Yes you can, assuming your team has the capacity and/or inclination to do so.
What about the same user segments but in a different country?
Since my client was responsible for expanding into 6 new markets within Asia Pacific and the Americas, would going after more of the same customer segments in overseas markets be considered going deep or wide?
I consider it going wide for these 2 main reasons:
- In most cases, you will be building up awareness of your brand from scratch (unless you're a global brand or a recognized regional brand from a nearby country)
- Marketing and sales messaging may need to be adjusted for the specific localized needs of your target audience even though it's the same general category of customer. For example, mid-sized law firms from common law systems vs mid-sized law firms from civil law systems have very different needs.
Will you choose to go deep, or go wide?