June 6, 1944, soldiers from the allied forces landed in Normandy, France.
The soldiers consisted of Americans, British and Canadians. They all landed simultaneously on five separate areas of the Normandy beach.
This single event helped bring an end to the Nazi Reich.
The landing was tough. There were hundreds of casualties, but by the end of August that same year, all of northern France was liberated.
Now, you may be wondering how could this event have such a big impact. You may even know the full story, but the fact remains that the strategy used here was absolutely effective. You see, once the allied forces conquered the beach, they used it as a stronghold. They defended it with all their might and then allowed more troops to land safely in what was previously enemy territory.
From those 53 kilometres of beach, the allied forces expanded and freed the rest of France.
This incredibly effective strategy is now known as the beachhead strategy and is used by entrepreneurs all over the world.
But what exactly does it mean for businesses?
For start-ups, the beachhead strategy is all about concentrating your limited resources on one small market segment. The business has to win that market first, only then can it move towards bigger and more broad markets.
This strategy was published in Dr Geoffrey Moore’s Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers. His book promotes a laser-focused market acquisition strategy based on the Normandy invasion. It all starts with a single market segment (the proverbial beachhead), and then move on to attract customers from adjacents segments. Each time using the already acquired customers as a launchpad to win over the new segment.
If you think about it, the beachhead strategy is a very effective military strategy. So why would it be so different in business?
In this article, we’ll look at why this very specific strategy is so effective for businesses. We’ll compare why it’s not the same as choosing a niche or specialising. We’ll also explore examples where it has been used successfully, and finally, I’ll share how you can apply it to your own business if you’re starting out or you’re launching a new product or service.
Let’s begin, shall we?
SO, WHY IS THE BEACHHEAD STRATEGY SO EFFECTIVE FOR BUSINESSES?
While there are many more reasons, let’s focus on the three main ones…
1. You make optimal use of limited resources
When you’re just starting out, your resources are typically very scarce. So, you need to find ways to optimise the use of every single ounce of energy and money.
If you’re doing your business on the side, your biggest constraint might be time. Let’s say you have allocated 20 hours per week to work on your business, ask yourself what would take less time to complete: talking to 100 people from various walks of life or talking to 100 students at the same university?
As you will see in the examples listed, this is exactly what a $3 billion business did when it started out.
2. You can make mistakes without paying the full price
Consider launching a product to the masses only to find out that they don’t want to use your product. How would you feel? How much money would you have spent uselessly?
This strategy allows you to make smaller mistakes and learn from your mistakes. Remember, even if you have a free product that everybody needs, you’d have trouble getting people to actually use it. Choosing a focused market makes it easier to tweak your product and your message until it’s perfect and ready to be deployed to larger markets.
No matter which type of business you choose, the risks of failure are high. In the United States, less than 50% of businesses survive beyond 5 years. So, in short, the beachhead strategy allows you to fail gracefully until you finally succeed.
3. It intensifies the power of Word of Mouth
If you’ve done your homework before starting a business, you’ve most probably heard about word of mouth (WOM) marketing. It’s one of the most powerful forms of marketing, but also one of the hardest to achieve.
Take a moment and think back to your past purchases, how many of these purchases did you make just because someone you trust told you about it? Or maybe you read a review from someone you trust?
Now, what happens when you hear a few people in your surrounding talk about a new product? If you’re anything like me, you’d at least get curious about that product and you’ll want to find out more, right? Well, that’s the power of Word of Mouth, and with a beachhead, your prospects will hear the same circle of people talk about your new product over and over again since you are targeting them specifically.
Alright, now that you’ve seen why it’s so effective, let’s see some case studies where this strategy was massively successful. But before analysing the case studies, I’d like to clear something up.
If you’ve read anything about niching down or specialisation you may be thinking that it’s the same thing. That would be an incorrect assumption, let’s find out why.
IS THE BEACHHEAD STRATEGY AND NICHING THE SAME THING?
Short answer: No. It’s not.
If you’re not familiar with the term, the definition of niching down is very similar to the beachhead strategy. In one sentence, niching down means having a clear focus on who your ideal target customer is and aligning your marketing to match.
Pretty much the same, right?
I like to think about niching down as marriage, and in that context, using the beachhead strategy would be more like buying a car. The difference one is permanent (or at least long-term), whereas the other is temporary (or short-term).
You see, when you choose your niche it’s a long-term decision. You’re going to serve that niche and only that niche for a long time. You will not even think about the other segments, they are not your target. Therefore, this affects how you present your product or service, how you name it, how you market it, which strategic partners to choose, and also how you price it.
When you use the beachhead strategy, you end goal is the whole market. You are just focusing on one segment right now to get the advantages of niching down temporarily.
When cash is flowing nicely, you will eventually capture other markets.
In most cases, I recommend professional service providers to niche down, but for those selling products, applying the beachhead strategy is a better approach to long-term success. This is because for services you have a much lower bandwidth, and it makes more sense to specialise and become the world expert in a tiny niche. This gives you the power to charge much more for your services.
Niching down does not have the same long-term strategic advantages for product businesses. Also, most product will have a limit to how much people will be willing to pay for them, this is especially the case with commodity products.
Alright enough about niching down, we’re talking about the beachhead strategy here… Let’s get on with the case studies.
WHERE WAS THE BEACHHEAD STRATEGY SUCCESSFULLY USED?
What if I told you that this strategy has been used by a company worth $479.4 billion? If you’ve watched the movie “The Social Network”, you’ll know exactly which company I’m talking about.
So, how did two university students (with very limited resources, almost no marketing budget and no staff) build the most used social network ever?
They concentrated all their efforts and resource on securing just one university — Harvard. When this school was conquered they slowly moved on to other Ivy League schools.
And with this strategy, they were able to capture the university market within months.
But you may think “Hey, that’s Facebook, they are the exception to the rule…”
And I won’t blame you for thinking that, however, let’s look at a more recent app which is worth just over $3 billion.
That app is Tinder.
And, before you ask: No, I don’t use Tinder personally. Plus, I was already married when it launched.
Anyways, back to the topic… When they launched, they focused only on West Coast, which is where they lived. But not only that, they targeted college students once again.
During an interview with Alyson Shontell, Sean Rad, the CEO of Tinder, said: “We also realized our harshest critics would be college students. And if we can win our harshest critics, then we can win everyone else.”
Their origin story is pretty amazing. Justin Mateen’s (one of the founders) brother was throwing a party for his best friend. He was going to have a bus to take people from the school to the party, back and forth. Justin had the idea or paying for the bus, and only allow people in the bus if they had the Tinder app.
Of course, they checked with the birthday girl, and after it was all approved, they did it. Guess what? It worked like a charm. Over 400 USC (University of Southern California) students downloaded the app and then used it. They invited their friends to use it, and it quickly became a phenomenon within USC.
Later, the founders drove to sororities and fraternities to promote their app. It was tedious but absolutely worth it. Each time, they gave a talk, hundreds of students would sign up.
Now Tinder is a massive success and it’s used by millions. With that said, let’s move on to the third case study.
McDonald’s in Mauritius.
For years, they had only one location. In Port Louis. That’s it, one single location. And looking back, the owners of the local franchise did the right thing.
It takes a considerable amount of time for a whole country to accept something new. Being in one place, they could choose the best location, they could manage it better, and get a feel for the local market.
When, the one location was fully validated, and the brand was well accepted among Mauritians, they opened the second one. Then the next one. Currently, they have six restaurants which I’m sure is generating a considerable profit.
Now, that we’ve seen successful implementations of the beachhead strategy, how do we go about applying the same for our own products?
It starts with choosing a segment, but how do we actually choose that segment?
Let’s find out.
HOW DO YOU CHOOSE THE BEST SEGMENT FOR YOUR BUSINESS?
There are nine factors to consider when choosing your market segment. But before looking at each of the factors, we need to have a quick look at the 3 primary types of segmentation that you can apply to your market.
THE THREE MAIN TYPES OF SEGMENTATION
1. Geographic — Based on the physical location of your customer. It could be an area, a city, a region or even a country. For example, you could target people in Port Louis.
2. Demographic/Customer profiles — Based on the characteristics of your customers, such as age, gender, income, etc… For example, you could target only females aged 25 to 35.
3. Industry vertical — Based on the industry of your customer. Verticals could be as broad as the automotive industry, or as focused as certified professional accountants.
There are other types of segmentation such as psychographic, behavioural, and process-based segmentation, but these tend to be the hardest to use for your beachhead strategy.
For even more laser focus, you can combine the types of segmentation. For example, you can target males between 40 to 50 who are project managers in Ebène.
Now that you know the different types of segmentation, we can have a look at the 9 factors to consider. I’ve also included a bonus worksheet for you to use.[content-upgrade id=”2276″]
THE 9 FACTORS TO CONSIDER
1. Can you identify the buyer individually?
Can you name some of the people who would be in your segment? In a group of 100 people, would you be able to pinpoint the buyers? Don’t choose a segment where you cannot identify the buyer. E.g. a 21-year-old female with X monthly income who has recently broken up with her boyfriend.
2. Do they have money to spend on your service?
Can they afford your product? Do they value your product more than the price you’re asking for it? For example, don’t try to sell luxury to someone who cannot afford his basic needs.
3. Can you reach the decision-maker easily?
Can you contact and meet the decision-maker? It can be via phone, email or in person, but can you reach that guy directly? Don’t choose a segment where the decision-maker is behind seven gatekeepers.
4. How badly do they need your product/service?
Do they need it or do they just wish for it? What would they be willing to sacrifice to get your product? Don’t try to sell ice to an Eskimo.
5. How is the competition in this segment?
Is there any competition? Remember, competition is good, it means that there is a market there. But can you go against that competition? Don’t choose a segment where the buys love your competition. For example, Apple fans.
6. Can you grow into other markets from this one?
Can you use this market as a launchpad to go into adjacent markets or is it a dead-end? Don’t choose a segment that is boxed, and not linked to bigger markets. For example, if you have a mass appeal product, don’t go for people aged over 70.
7. Does it align with your dreams?
Does this market fit with the bigger picture for your business? Choosing a market that fits your dreams makes everything easier. If you dislike lawyers, don’t start with lawyers. (Not picking on lawyers — they are good guys — usually…)
8. Do you have a personal connection to this segment?
Are you connected to a part of that segment already? Maybe it’s the same age group, or same industry, or physical location. Don’t choose a segment in which you have no connection whatsoever.
9. Is word of mouth effective in that segment?
Do people listen to the influencers and brand ambassadors? Or are they sceptics when it comes to word of mouth? For B2B companies, word of mouth has less impact than B2C.
There you go, the nine factors that will help you decide on the segment to choose as your beachhead.
And this brings us to the end of this article.
SO, WHAT HAVE WE COVERED IN THIS ARTICLE?
We covered three things.
1. The first thing we covered was why the beachhead strategy is so effective for new products and services.
When you introduce a new product, you’re not sure how it will be seen by the market, so the beachhead strategy allows you to optimise all your resources to a targeted segment. Secondly, it allows you to make less costly mistakes. And finally, you get the full benefit of word of mouth marketing by targeting related customers.
2. That takes us to the case studies of successful application of the beachhead strategy.
We saw that Facebook and Tinder both used this strategy when they started out. The founders focused their attention on their own networks initially and then moved to a bigger audience. We also saw that McDonald’s employed a similar strategy in Mauritius.
3. The last thing we saw was how to apply this strategy to your own products and services.
We discussed the types of market segments, and then we proceeded to analyse the nine factors to consider when choosing a market segment. And, as a bonus, I gave you a worksheet you can use today that will help you to choose your best segment.