How to Grow A Business Through Customer Segments (Verticals)
Updated: Apr 7
Shopify, one of the fastest digital native companies in the world. One of their keys to growth is that they are hyper-focus on eCommerce companies. The exclusive target and offer web tools for people who want to sell things online. Back in 2016, Shopify had over 300,000 merchants using its platform. By focusing on a single customer segment, which is eCommerce companies, they were able to penetrate a market with a clear value position and overall perfect positioning. This is also known as specialization. Here are some examples in other industries:
Ledger Gurus - an accounting firm for eCommerce companies
Subsplash - an app development company for churches
Employee Cycle - is an analytics dashboard for human resource departments
These are companies that have chosen to hyper-focus on a single customer making them highly referable, highly knowledgeable, and solve the unique problems/pain points unique to that segment.
If a company wants to grow by segments, they first move from a specialized firm to a more generalized firm. When Facebook first started in 2007, they were exclusively for people at Harvard. Then, they grew to other Ivy League institutions. Colleges in general, were then on it. Eventually, Facebook opened up to the masses. In order to execute a customer scale strategy people need to do the following four things:
Narrow focus and perfect a solution on a single segment
Build a highly standardized and profitable solution for a single segment
Add on (slowly) one additional segment and see if processes and profit margin break with the new segment
Wash rinse and repeat
It's important that we target the right people and do it in the most efficient and successful way. This blog goes on further about the importance of investing into marketing.
Here's a video with further explanation on not only the products and services strategy, but the other six, in order to expand the growth of a business.