How big is your market?
Thursday 16th Nov, 2017
By Fiona Czerniawska.
It’s decades since Theordore Levitt wrote about what he terms “marketing myopia”, the extent to which people and organisations underestimated the potential size of their market because they viewed it through a narrow, pre-determined lens. If you’re trying to sell screws, the problem is not that every solution is a screw but that you only see screw-related opportunities: there’s a bigger market out there, if only you saw it as fixture-related.
I was reminded of this idea recently when talking to a client about how the way in which they use professional services may change in the future. A wide-ranging discussion ended up with both him and me realising that we needed to see the market differently, through a different lens if you like.
Let me explain: Half a century ago, organisations did pretty much everything for themselves, using their employees to do it. Gradually, some of those people were replaced with technology, but then we hit the 1980s and the first really big wave of growth in consulting, which was driven by the recognition that organisations should focus more on their core business, outsourcing more marginal or short-term activities. Soon after, we saw a tsunami of activity around technology, at the centre of which were the giant ERP systems provided by SAP and Oracle: Although clients still did some “making” themselves, they were doing more and more “buying”. The two industries that grew up as a result of these trends—consulting and IT services—have remained fairly distinct until recently, but are now merging, as technology companies look to move upmarket, and as consulting companies increasingly productise their services.
But the shifting tectonics on the surface of the professional services sector are less important than the profound currents that underpin them. Clients, it seems to us, are making much less of a distinction between what they make and what they buy, and whether they’re “buying” or “making” people. All that means that we need to think about the professional services market in a different way, and include what clients do themselves and the technology they buy. That’s a much, much bigger space to play in.