5 Growth Strategies for Middle Market Companies
The Fortune 500 gets a great deal of media attention. And of course small, sexy, entrepreneurial firms are covered widely, as well. The middle market, meanwhile, is often ignored, yet it’s responsible for roughly one-third of all jobs in the United States. In and of itself, the US middle market would be the third largest economy in the world, according to the National Center for the Middle Market.
The mighty middle market is mighty important to the US economy!
Companies in this sector of the market don’t have the financial resources of a multi-billion dollar company. Compared to startups, which often have a runway of opportunity where they can focus exclusively on one product or product line while being under the radar of the competition, middle market companies operate under greater competitive pressure and scrutiny.
With this in mind, a middle market company has unique needs and should take a different approach to revenue growth than other types of companies. To that end, here are five highly effective strategies for middle market companies to unleash revenue growth:
1. Define a Clear Brand Strategy
After a period of significant growth, companies tend to take on greater organizational complexity. More departments, more voices in the conversation, more fiefdoms to protect, etc. Projects and initiatives that were once run by individuals are now run by teams. As you grow, there’s more to do, with more people involved at every step of the way.
When companies initially launch, they often have a very clear mission and identity. After transforming into a mid-sized company, it’s not uncommon for everyone to be heads down, busy with what needs to get done today, without a clear identity and strategy. In this environment, it’s easy for a company to lose its focus. I once provided consulting for a middle market company with a 15-person leadership team, and when I asked the team to articulate the company’s differentiation, I received 15 different responses. It was no wonder that the company’s growth had stalled. This is unfortunately more common than you would think.
To unleash growth, having a crystal clear brand strategy, including vision, brand architecture, audience definition and segmentation, customer personas, positioning, differentiation, competitive advantage, customer promise, brand personality, and core values, is invaluable. With a clear brand strategy, everyone works in a way that reinforces and strengthens the work of everyone else around them. It translates into a decision filter that empowers everyone throughout the organization to move fast and in a fully aligned manner, creating a compound effect for accelerated growth.
2. Innovate within Your Sweet Spot
Business today moves fast. To succeed, middle market companies should look to innovate. Innovation leads to competitive advantage, which enables you to unleash revenue growth. Innovation can take many forms, whether related to your business model, technology, product, packaging, process, service, experience, environmental impact, supply chain, etc. The opportunity for innovation is nearly endless.
But innovation for innovation’s sake can lead to a lack of direction and a great deal of running around in circles. Whereas a Fortune 500 company can easily absorb such inefficiencies, midsized companies cannot afford this.
The solution? For middle market companies the key is to innovate within your sweet spot. Middle market companies need to be highly efficient with allocation of funds, and the most reliable form of innovation is to double down on where you are already strong.
If you look at Salesforce as an example, it focused its innovations through its middle market stage on strengthening its position among CRM software providers, and then only after sufficient growth started to branch out to other, complementary areas of marketing software. Green Power Energy is an energy company in the Northeast, building an energy system based on locally produced wind and solar power. It uses its Energy Innovation Center (EIC) to bring the latest in energy technology and clean energy solutions to customers, such as an energy-efficient eHome. For middle market companies, the key to successful innovation is to focus like a laser where you are strong, and to become even stronger in that area.
3. Rethink Your Marketing Metrics
As companies grow from small business to middle market, often the same marketing metrics are carried over. This is a natural evolution, but often brings about unforeseen problems. For one software client that hired us, it had originally focused its digital marketing strategy on driving traffic. As a result of that focus, though, too much of that traffic was not converting into leads. We then completely restructured the company’s digital marketing campaigns, focusing like a laser on conversions, and grew leads by 427% within seven months. The value of rethinking your marketing metrics cannot be overstated.
When another middle market client hired us, it was viewing its marketing data in aggregate. We pointed out that it was a global company, with sales in the US, Japan, Korea and a host of other countries. Given that each market was different from one another, the marketing data needed to be analyzed country by country instead. Data aggregation actually led to the wrong conclusions about what was going on with its audience. We then started analyzing and optimizing the digital marketing for each country individually, and metrics for the brand improved substantially.
Another client that brought us on was very proud of the number of posts it was producing. However, when we looked at the analytics underlying the blog, it was an unmitigated disaster. The traffic, engagement, sharing, and conversion numbers were minimal at best. Assessing the quality of the posts, the problem became immediately clear. The posts were not optimized for search, limiting the audience that would find the posts. For those who actually landed on the blog, the posts were boring and felt amateurish, leading visitors to immediately abandon the site. In this case, publishing frequency really had no impact on the business, and instead it was giving the client a false impression of marketing achievement.
To scale a middle market company to the enterprise level, measure as much as you can, no matter how esoteric it might feel. If your team is aiming to increase thought leadership in your industry, for example, you need to track exactly what that means. If you are speaking at industry events, establish numerical goals, track speaker submissions, and wins. If you are aiming for byline articles, establish numerical goals, track article pitches, and articles published. It’s a hyper-focus on metrics that will enable you to scale from middle market to enterprise level marketing muscle.
4. Become a Customer Experience Leader
According to the Customers 2020 report by the customer intelligence firm Walker Information, customer experience (CX) will overtake price and product as the key brand differentiator by the year 2020. This differentiation translates into real revenue. A Forrester study found that CX leaders grew revenue close to 6X faster than CX laggards over a 5-year period.
More and more CMOs are taking note. In a recent IBM study of CMOs, two-thirds of respondents stated that deeper, richer customer experiences are their top marketing priority. Those that ignore CX moving forward are going to face stiffer competition.
The age of the customer is upon us, with their greater access to information and ever-increasing expectations. Middle market companies that want a consistent competitive advantage need to focus on providing a better customer experience throughout the customer journey. The good news is that midmarket firms have a strategic advantage over larger companies in delivering a superior customer experience in that they are more nimble, have fewer bureaucratic hurdles and are generally closer to the customer with fewer layers of management.
5. Capitalize on the Explosion in Marketing Technology
To be successful at marketing in the coming years, the midsized company marketing leader must equally become a technology leader. In 2016, Scott Brinker, who runs the Chief Marketing Technologist Blog, identified 3,874 software solutions on the market for marketers. This is compared to merely 350 three years earlier. Talk about a fast-growing market!
According to Gartner’s recent CMO Spend Survey, CMO marketing technology spend is on track to surpass that of the CIO spend level. CMOs allocate 27 percent of their budget towards technology now, with 39 percent of this going towards SaaS applications.
Moving forward, we can expect this allocation to climb. Ashu Garg, a general partner at the venture capital firm Foundation Capital, predicted in the eBook “MarTech and the Decade of the CMO” that marketing technology spend will increase 10x in 10 years, from $12 billion to $120 billion.
Middle market companies have an advantage with technology. Large firms have significant investments in legacy enterprise technology, and any technology change could take years. Smaller firms simply don’t have as much money or resources to put into technology. Middle market companies looking to grow should fully embrace the marketing technology revolution before their competitors do.