Stuck in the middle

The middle. The mean. The average. That’s where you are, with average efficiency and average margins. So what to do if you aspire to the low throughput high profit upper end – while leveraging the high efficiency, low margin lower end?

It is possible to make money in both ends of the market by simply creating two business models for the two ends of the market. Dividing the sales force is one example of this, but there are other considerations. In differentiating the markets, cost, quality, and delivery/responsiveness are all important. At the low end you’re working to fit specific needs. At the higher end, there are qualitative elements regarding service expectations.

Of course, to do this requires differentiation and awareness of the alternatives - both internally to your firm’s offerings as well as those of competitors. You can build awareness but long term success requires backing up these promises with real differentiation. And in case you just think you’ve had an ‘ah-ha’ moment, let me suggest that functional improvements are not enough either. Bit-rates and throughputs are no longer effective differentiators. Today, differentiation takes many forms. Complementary services. Strong consumer loyalty. Personalized service. A strong brand, in other words. At both ends of the value chain.

Start with the basics – ask consumers to understand what their needs are and what problems they experience. Observe their behaviors and analyze what it means to your offerings - You need to observe and find out by different means and then put the puzzle together yourself to discover what people really want to have. You have to figure out what people really want, even if they can’t yet express it. Organize cross-functional teams, including product management, sales, marketing, and support staff. This will aid the brand, inform product development, and add to the bottom line.

Out of the middle, toward the top.