A Pocket Strategy is Best for Our US Market Entry

As published on www.eventerprise.com/blog:

There are many ways to enter a new market. The decision is of critical importance as it sets a company down a path that will help determine future success or failure. Make the wrong choice and changing course may be difficult and the ramifications staggering. For this reason the approach needs to be thoughtfully crafted with a healthy respect for the stakes involved.

Once the decision has been made, as Big Daddy Kane once said, “there ain’t no half-steppin’” – you’re either all-in or your destined to fail. Partial or incomplete commitment to the mission is a recipe for disaster and is likely to lead to an undesirable outcome. At Eventerprise, we take that advice to heart and have crafted a market-entry strategy that we are supporting with all available resources.

As a digital platform offering a service that does not exist in the marketplace, JV’s, licensing agreements, or any other arrangement leveraging existing infrastructure or processes were never an option. The city-by-city approach we have employed and fondly call the “pocket approach” is nothing revolutionary, however, it is notable for its position on the opposite end of the spectrum from the mass-market or “shotgun” approach, where many markets are indiscriminately targeted and flooded with marketing resources.

So what is our Pocket Approach?

The Eventerprise Pocket Approach to market entry recognizes that a platform is only as strong as the network it supports. The Eventerprise platform is of little value to a client if she finds limited vendor options and incomplete profiles in her geographic region. Having 50,000 US profiles sounds great, and is a short term goal for Eventerprise, but unless those vendor profiles are sufficiently concentrated in a region, they are of little value. For example, 50,000 profiles across 100 different cities does not provide the vendor depth needed to attract users on the client-side of the platform.

The Pocket Approach was created with the understanding that although Eventerprise is a global platform, its users are confined to geographic regions and only derive value from network participants within a limited proximity. For this reason, we are expanding into the US one city at a time, and only moving on to the next city once sufficient resources have been expended to activate the market and an adequate user-base has been established to spur viral organic growth through network effects.

Identifying the approach is one thing, the execution is an entirely different animal. If you are going to be throwing the full organizational might of your company behind such an effort, you better be sure you have selected the right city and have a detailed plan to reach and activate the market. That’s why we have laid out a city-by-city roadmap for where and when we will enter different metro regions. We took our time constructing this plan, basing it on thorough research and analysis. Evaluation of US major cities took into account both quantitative and qualitative metrics to determine each metro area’s attractiveness.

When assessing market attractiveness, one of the first things we considered was the number of event vendors. However, we were not concerned with the total number of event suppliers, but rather their concentration in the region, as we feel it is a more quantifiable proxy for the level of competition.

A major metro area may have a large number of meetings, conventions, and event planners, but that does not necessarily mean its event planners have a high enough incentive to compete with others. In regions with a higher concentration of event suppliers (in other words a higher ratio of planners compared to the local demand) event planners are incentivized to try and stand out from the crowd and promote themselves, a challenge the Eventerprise platform seeks to solve.

To assess the concentration of vendors, we used US government census data to calculate a Location Quotient (LQ) – the ratio of local event-related employment concentration compared to the national average concentration. An LQ greater than one indicates the occupation has a higher employment concentration than the national average. For our initial expansion phase, we have determined a minimum LQ ratio that a market must meet for it to be considered.

In addition to LQ, we also look at a metro area’s total population, the area’s events reputation, local economic conditions, and the its proximity to other key regions we have targeted. We also take into account the cost to reach the market with digital marketing and local sales reps. A market may initially appear very attractive, but if it is too expensive to efficiently activate, we will postpone entry.

After we have identified our target city, we focus on activating both sides of the platform, since the value for one side of the platform is driven by the number of users on the other. In short, it makes no sense to grow only one side of the platforms as you will end up with a lot of users who will quickly give-up and leave the platform. A similar market-activating recipe is used for both sides of the platform: digital marketing (search and display) campaigns, content marketing initiatives, and direct sales (phone and door-to-door).

When creating a market activation strategy, it is important for a company to subject itself to an honest self-assessment to fully understand its organizational strengths and weaknesses. Building a strategy around a skill-set your firm does not possess is inadvisable and asking for trouble. Digital marketing is one of Eventerprise’s core competencies and something we feel we are able to execute better than most. For that reason it remains at the center of our market entry, with Los Angeles the first major US metro in our cross-hairs.

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By Chris Mellor | April 9th, 2018 | Categories: Investor News | Tags: market activation, network effects, pocket strategy, US events market, US rollout