Compartmentalization risks and advantages

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Sometimes we need to compartmentalize and separate our activities and marketing strategies.  This occurs especially if we have one “business” but two or more distinctive markets.  Creating one-size-fits all strategy often results in you not really connecting with any of the markets.  You run the risk of the marketer saying “we can do anything”, creating the impression with potential clients that you can do nothing really well.

The answer is to set your marketing into different compartments.  You are “one business” to one group of potential clients and another to another.  You might have totally different websites, trade names or even locations for the different divisions.  Back end and production services might be integrated, but your potential clients don’t see the integration until it is time — and that occurs when they are already satisfied clients of Division A, and then can be introduced to Division B.

Obviously compartmentalization is not necessary if the business activities are closely and relevantly associated.  This is more in the case of a business expansion.  But be wary of “brand extensions” — when you take the good name and business reputation of your primary business and seek to extend it to something different.  You lose your marketing focus, power, and may revert to commodity-style sameness as you expand your scope.

Another solution to compartmentalization and diversity is to set up totally separate businesses and joint ventures for business extensions.  As an example, a key client urged us to publish a local renovation magazine, Ottawa Renovates, which is far from our primary business-to-business construction media framework.  We co-ordinated a now-successful joint venture for the magazine.  This allows for distinctiveness yet relevant market sharing and co-operation, especially within our client community.

Finally, on a personal level, I learned one of the risks of compartmentalization last night.  I scheduled several business meetings and events for late next week, while we were planning a weekend out-of-town family function.  Of course, I forgot that we decided to leave early, causing direct conflicts with scheduled business meetings on Thursday and Friday.  My bad.  This leads to a reminder:  When you are considering overlaying two distinctive market focuses in your business, double check for conflicts before proceeding.

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