What is Strategic Segmentation?

Segmentation is the strategic identification of different customer/audience groups.

The purpose of segmentation is to identify the best approach/offering for different customer segments by better understanding their behaviors, motivations, and needs.

The key to effective segmentation is to identify groups based on differences in how they respond to your offerings.

Let me explain that a bit… Typically when people think of segmentation they envision describing their audience in general characteristics and then grouping them based on these characteristics. But in order for segmentation to create strategic value, the groupings must reflect commonalities in how the groups members will relate to you. Thus you must look past specific characteristics (like age or gender) and ask “How does this characteristic affect the relationship I’m trying to create with this person through my products and services?”

I want to stress two things about this:

1. Segmentation is about relationships.

2. Segmentation is developed from the perspective of others, not your own.

Understood in this way, strategic segmentation is a kingdom principle.

Segmentation Helps Evaluate Strategic Value

In the context of strategy, segmentation is used to determine whether or not your organization can create a sustainable competitive advantage for the different segments of a market. Thus the goal of segmentation is to categorize and understand the different customer/audience groups in a market in order to develop and evaluate targeted offerings. Segmentation informs the decision to “go after” a customer/audience group by asking:

• Can we appeal to the target segment?
• Can we maintain that appeal (and our relationship) over time?
• Is the benefit of the relationship worth it?

Ultimately, effective segmentation will lead to the development of unique strategies for the specific segments that have shown to be valuable.

Segmentation for Businesses Versus Churches

Just a quick word on the difference in applying segmentation in a business versus applying it in a non-profit, ministry or church.

The technique is the same for them all and the value in better understanding the key characteristics of your “market” (i.e. the people that you are trying to establish relationships with) is the same. The difference comes in how you evaluate the value of targeting segments.

In a business, (generally) value is created through an exchange of products/services for money. Thus the value of a particular segment will largely be determined by the potential revenue from that segment, offset by the cost of going after and serving that segment.

In a church, value isn’t necessarily “exchanged” (though it can be). Value is created through sharing the Gospel, leading people in deeper relationship with God, and by serving others (Ephesians 4:12-13). And it should be done regardless of what the church receives in return. So in this context, the value of a particular segment (to the church) will largely be determined by… well, the value is infinite. There’s no way around it. We must always seek to serve EVERY segment.

But that doesn’t render strategic segmentation useless for churches. Segmentation tells us what about what a church offers (the Gospel, relationship with God, service) will appeal to a target segment. Equipped with this knowledge a church will be able to tailor their approach to highlight the aspects that are appealing to the segment, increasing the ability of the church to establish relationships with that segment.

BUT (strong word of warning), the church MUST be sure that once it has drawn people into relationship with the church that it provides more than just the things that are appealing. If God is working through churches to transform people through Jesus into be what HE wants them to be, then it is irresponsible to allow people to dictate (by their own preferences) what they will and won’t do as they grow in Christ.

Segmentation is a great way to increase your effectiveness in relating to those that you are trying to serve, whether it’s in business or in a church. It is an important tool for anyone who thinks strategically about advancing the kingdom of God.
What about you?

Do you strategically segment you market?

What benefits or challenges have you had with segmentation?

The following is another excerpt from the BAM Survey 2007 Report. The BAM Survey 2007 Report is an in-depth assessment of the state of the Business as Mission movement based on survey responses from 497 people in 38 countries. You can purchase an electronic copy of the BAM Survey 2007 Report for $14.99 here.

Creating Eternal Value through Strategic Management

Business as Mission Methodology – BAM Business Organization and Resource Coordination (part 1)

In order for Business as Mission objectives to drive the strategic management of BAM companies, the structure of a BAM company must align with those objectives. Analysis of the survey results suggests that correlations^[1] exist between respondents’ perceptions of key elements of a BAM company (structural elements and management considerations) and perceptions of key BAM objectives.

Structural elements

Different strategies that integrate business activities with ministry efforts hold to different principles on how a business should operate. How each of these principles is manifest within a business is a subject of much debate. Core principles such as operating with integrity and honesty are universally accepted as important to Christians in business. However, research shows that three key considerations regarding structure (commercial function^[2], licitness^[3], and management oversight) are not universally accepted as vital elements of Business as Mission (Exhibit 5).

• Nearly 10 percent of respondents do not think that commercial function and legal structure are vital for Business as Mission. (5.1 and 5.2)
• One out of four respondents expressed no opinion about whether an advisory board is a vital element of a BAM business. (5.3)

Management Considerations

Exhibit 6 summarizes how perceptions of corporate structure as well as management considerations regarding oversight and sustainability correlate with the perceptions of the strategic objectives of the Business as Mission movement.

Corporate structure (6.1-2)

• Aspects of corporate structure (licitness and commercial function) are recognized by 77 percent of respondents as important elements of BAM companies.
• Both licitness and commercial function are considered to strongly influence a business’s ability to make a profit. Both also influence evangelism efforts and focus on the developing world.
• A BAM company’s commercial function influences that company’s role in building the local economy. (6.1)

• Commercial function has a negative correlation with providing access to countries. (6.2)

Management oversight (6.3-5)

• Survey respondents heavily favor Management participation in discipling and accountability relationships (87 percent). Additionally, 68 percent agree that BAM companies should have an advisory board. (6.3 and 6.4)
• Results indicate that the primary influence of these two types of management support is on the company’s evangelism efforts and focus on the developing world. (6.3 and 6.4)

Sustainability (6.6-8)

• Sustainability is considered a highly important aspect of Business as Mission, with over 85 percent of respondents agreeing that Net profitability of the organization, Growth in capital base for future development of kingdom businesses, and Development of a succession plan are valuable elements.
• Respondents correlate net profitability with the ability to build the local economy and to bless the nation. (6.6)
• Respondents also believe that developing a succession plan facilitates the ability to evangelize and the focus on the developing world. (6.8)

• All three aspects of sustainability are negatively correlated with the goal of gaining access through Business as Mission.

The following is another excerpt from the BAM Survey 2007 Report. The BAM Survey 2007 Report is an in-depth assessment of the state of the Business as Mission movement based on survey responses from 497 people in 38 countries. You can purchase an electronic copy of the BAM Survey 2007 Report for $14.99 here.

Business as Mission Companies Create Eternal Value Through Strategic Management

Whereas evangelism, profit, and (to a lesser extent) mission to the developing world were the historic points of contention for the Business as Mission movement, BAM leaders have built a foundation on these elements and are now working to clarify the principles under which Business as Mission companies operate. This focus on clarification has become necessary as Business as Mission is one of many strategies in existence that mixes general business activities with evangelism and ministry efforts aimed at unreached people groups. Though similar in nature to strategies like tent-making, micro-enterprise, micro-development, and workplace ministry, there are important distinctions between each in terms of intentions, methods, means, and outcomes. Irresponsible mixing of terms and tenets has leads to confusion and distraction and ultimately hinders the Business as Mission movement from gaining further momentum.

Currently the Business as Mission movement does not have a systematic, integrated approach for defining, organizing, and analyzing methodologies, and metrics that drive kingdom impact. Through our research, we are able to draw on the collective experience of Business as Mission leaders and lay the foundation for the development of an applicable framework for transforming strategy into action.

Clarification of Objectives

Not all Business as Mission undertakings will or should have the same objectives; nor should BAM practitioners rule out the possibility that their operations will be used for some type of transformation that they did not plan for. This is important because integrating specific BAM objectives (whatever they should be) along with the business’s financial, creative, and productive goals requires clarity in order to maintain productivity towards accomplishing all goals.

Our research shows that, according to respondents “Very Familiar” with Business as Mission, the most agreed upon objective of BAM is to Build the local economy and bless the nation^[1] (Table D). The second most agreed upon objective is Providing access to many locations^[2]. Survey data also indicates that making a profit, evangelizing and targeting the developing world are key objectives of the movement.

These objectives highlight the perceived advantages Business as Mission adds to the goals of traditional, donor-driven mission efforts – a self-funded vehicle that provides creative access to evangelize and minister to unreached people groups. However, they also highlight the need for further refinement of how strategic Business as Mission objectives are formulated and set. Behind each objective identified in the survey lies an assortment of motivations, interpretations, and expectations for fulfillment. These factors further magnify the complexity of Business as Mission and can make it difficult to know how day-to-day activities and operations contribute to the strategic BAM objectives.

In talking about Business as Mission goals we must resist the tendency to become myopic in our orientation. Ultimately, we are not in control of whether or not we accomplish these goals. Thus, Business as Mission goals and objectives must be understood as guidelines that describe the potential for kingdom impact that BAM companies have. Our discussion of factors that contribute toward these goals is aimed at furthering the Business as Mission movement’s understanding of what experience has shown to be effective.

The following is another excerpt from the BAM Survey 2007 Report. The BAM Survey 2007 Report is an in-depth assessment of the state of the Business as Mission movement based on survey responses from 497 people in 38 countries. You can purchase an electronic copy of the BAM Survey 2007 Report for $14.99 here.

Who are the Business as Mission leaders? (part 3)

Business as Ministry

It is clear from the survey results that the belief that missions/ministry work can be done in the business context is widely accepted (Exhibit 4). In fact, as many survey respondents believe that Business as Mission is beneficial to the kingdom as those who believe Missions work is beneficial to the kingdom (96 percent agree with each) (4.1 and 4.2). However, it is not as widely accepted that general business (operated ethically) is beneficial to the kingdom (only 60 percent agree and 21 percent disagree) (4.3). The fact that 83 percent of all respondents agree that Work in a business is a ministry (4.4) suggests that the Business as Mission movement distinguishes between the impact a business (organization) can have and the impact that individuals within a business have.

Business as Mission is more than just doing business ethically

It’s particularly interesting that respondents in the Business, Non-Profit, and Education fields all agree to the same extent that Work in a business is a ministry (82 percent, 82 percent, and 85 percent respectively). However, fewer Business respondents agree that Any ethical business is beneficial to the kingdom (59 percent) compared to Non-Profit and Education respondents (64 percent and 63 percent respectively).

This may point to an increased awareness among Christian businesspeople of the importance of being intentional in using business as an opportunity to minister. Whether this is a result of experience or in response to increased scrutiny and criticism the business world receives as a result of the sacred/secular divide is unknown.

In Business as Mission, the company itself is a part in the ministry

One of the core distinctions between Business as Mission and other approaches to integrating business and mission/ministry (e.g. workplace ministry, tent-making, micro-development, etc) is that in BAM some or all aspects of the business (organization) contribute to the missional purpose. Business as Mission involves the manifestation of a missional purpose at both the individual level and the organizational level. What the missional purpose is and how it is manifested at both levels is influenced by many different factors.

Given that respondents universally accept the benefit of Business as Mission (4.1) but do not completely accept individual (4.4) and organizational (4.3) impact in business implies that some people do not understand how Business as Mission incorporates both. Only 53 percent of all respondents agree that Work in a business is a ministry and that Any ethical business is beneficial to the kingdom. Additionally, 22 percent of respondents who agree that Work in a business is a ministry did not agree Any ethical business is beneficial to the kingdom.

Thus, a majority of people understand the individual aspect of BAM transformation; but, a significant portion of the movement does not understand or agree with the organizational aspect. In order to address this disconnect, it is important how BAM leaders run their companies to create impact. In the next section we look at four aspects of Business as Mission strategic management: objectives, organization and coordination, metrics, and resource allocation.
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From a consumer’s perspective, I personally welcomed the change as the new brand distracts me from the reality that we shop at Target because we do not have excess discretionary income and they sell mostly quality products. The new brand really emphasizes the quality of Target’s products when compared to other low-cost competitors (like Walmart or Meijer in the mid-west). The message is clear: “up”; which has a positive connotation (i.e. “Things are looking up.”)

Strategically, the new brand seems like a great concept that aligns with how Target approaches its market. No problem, right?

Look at the new logo upside down:

It’s still a clean, aesthetically pleasing design. But now it says “down”.

Is this catastrophic? No. But the brand message is lost every time Target product gets placed upside down in the consumers home. For me, all I see now is “dn&dn”. Probably not what Target’s marketing team wanted.

As strategists, it’s our job to shine light on the unintended and unexpected by asking “What would this look like from a different angle?”

I’ve been thinking a lot about this in the context of strategy, well honestly I’ve been thinking about it in the context of a lot of things: life, relationships, entrepreneurship, parenting, ministry… because DON’T BONK is great advice for anyone who strives to create impact in the world, be it in your community, the  marketplace, or your own home. It’s advice that is especially poignant and pertinent in my life right now as I run the race that has been laid out for me.I am a husband, a father of two children under the age of two,  an elder in my church, and starting my own business. See, I have decided to live a life of significance and I believe that I am called to make a difference in whatever roles God has called me to. And right now that means serving his Kingdom in my family, in my church and community, and in the companies and ministries that my company serves. As anyone in similar roles would tell you, each is a lot of work and takes a great deal of time, energy and effort to do well.

Believe me, the demands of doing all four at the same time are often overwhelming. My effectiveness is under constant attack from the demands and chaos that come with the territory as a father, as a husband, as a business owner, as a servant of the Church, in addition to the physical drain that comes from responding to those demands. On top of all of this, the enemy preys on my position and is constantly beleaguering me and my wife, tempting us and doing everything in his power to distract and separate us from the one true Source of life and power from which any impact I have in any of these areas comes.

I read recently that Alcoholics Anonymous advises its members to avoid becoming hungry, angry, or tired in order to avoid succumbing to the allure of alcohol and backsliding. I believe that this wisdom applies not only to resisting the temptation of alcohol but to all sins. I have noticed that my ability to meet the demands of my roles, to faithfully endure, centered in Christ and (very simply) be steadfast in my faith is seriously compromised whenever I am hungry, angry, or tired. I confess that I frequently succumb to my own sinfulness because I lack the energy to push through. I BONK.

For me, the conundrum is knowing what I can do about it (and having the energy to do it). And though there are a number of things that I can and will give attention to that create a conducive environment for faith to be sustained, I think the one thing that is most important and upon which any other bit of advice would be based is knowing that Christ endured far more in our place.

I am constantly learning the extent of the truth in Christ’s words in 2 Corinthians 12 “My grace is sufficient for you, for my power is made perfect in weakness.” .  So remember these things as you try and fail or as you struggle to keep up with the whirlwind of demands facing you or when you are hungry, angry, tired:

Christ has claimed victory over everything

Sin, death, evil, failure, frustration, exhaustion. Christ’s perfect life, death on the cross, resurrection from the grave, and ascension into Heaven have broke all power of this world over you. Rest in His grace.

You are not able to or supposed to be perfect in this time.

Sin still exists and you are still sinful creatures. Christ alone is perfect and it is His perfection alone through which we are made righteous. Do not view this as license to be imperfect. We are called to be perfect. Just remember whose power enables any and all good that you can do.

Focus on avoiding becoming hungry, angry, or tired.

Said differently, do not give the devil a foothold in your life. Spend time with God, through prayer, through worship, through study of the Word. Prioritize these things so that there is not room for doubt or lies to take hold in your heart. Faith, the power to endure, is a gift from God. Do not shut off the ways He has given us to come to Him and receive it.

Christ has called us into community so that we do not have to suffer through hardships alone.

We have a Great Counselor who is with us. We need to have a community of fellow believers who can lift us up, bear our burdens, preach love to us. Do not foolishly think that you are alone.

Boast in your weakness because it is in these times that Christ’s power is most visible and most beautiful to the rest of this world.

Do not hide from failure. Do not pretend to be something that you are not. For our weakest moments can be the greatest opportunity to be a witness to Christ’s love. Imagine what it would be like to suffer and not be assured by Christ’s love. Your weakness can be an opportunity to bring you close to others who also suffer, but suffer without hope. Letting others see Christ’s love shine in you in your times of weakness will help them to see that the light is missing from their own lives.

Shine on. Don’t bonk.

Pray4BaM.org is part of a UK based charity that was set up to support Business as Mission in prayer, finance and marketing. We felt God calling us to organise a Prayer Conference for BaM. Rather than being a time of teaching about BaM, this is to be a Prayer Conference, supported by times of worship and testimony of what God is doing around the world through business.

Based on their description and from what I know of the group that’s involved, I am excited about what God is leading them to do. I think the conference will be a great opportunity for those who attend. As S.D. Gordon has said, “The greatest thing anyone can do for God or man is pray.”
Prayer is crucial to all endeavors whether they be overtly Christian or not.

I think this announcement is rather timely in light of my previous post regarding conferences for the rest of us. This is a great opportunity for the priesthood of believers who are called to global missions and business to engage in networking, learning/training, and self-promotion (for themselves or their organization) and the need for venues for this is great. And I’m glad that prayer is a top priority, I hope that this becomes the first of many such efforts and that BAM practitioners around the world can grow to rely of frequent prayer efforts on their behalf.

At the same time, I believe there is a greater need among the BAM movement. This conference is one of many new services being developed to address the needs of the BAM movement. But the market for BAM services is still relatively new. This new growth stage is characterized by the growth and maturing of customer groups within the BAM movement. As a result we’re seeing the development of “competition,” new offerings from existing groups or the emergence of new groups adding new services to the mix. The historic challenges of lack of conceptual clarity, fragmented and isolated effort, and philosophic differences which hindered BAM efforts in recent years are giving way to a new set of challenges arising from the diverse backgrounds and needs of the participants in the BAM market.

To date, very little empirical research exists in the field of Business as Mission. The majority of the focus is still on issues like the Biblical basis for BAM, and as long as there are Christians that need to be awakened to the fact that God wants their full service – Monday through Sunday, such discussion is needed. For those who are brave enough to venture beyond BAM principles and foray into practical BAM, conceptual contributions based on personal insight and experience dominates the discussion. As a result, very little data- and fact-based guidance exists for these service providers to draw on as they sift through the complexities of the Business as Mission landscape.

The some of implications of this on developing a BAM strategy are:

• You will most likely have to spend time educating your customers about Business as Mission which will influence your business development strategy. Make sure to incorporate stories into your efforts in order to help customers “experience” the power of what it is you do.
• There will be very little Business as Mission specific, market information to reference in your business planning efforts. Use bottom-up estimations when assessing the opportunity in your business plan. Your estimates will be more realistic and people will be more likely to trust your assessment.
• Market boundaries will be blurry and difficult to define; thus it may be difficult to both identify pockets of demand for you products/services and understand the underlying drivers. It will be important to invest in market intelligence activities in order to understand your competitive landscape and track customer demand. Client relationships will also be important as you must make sure you have a good understanding of your customers’ needs and challenges.
• Poorly established BAM business models will get lost somewhere between a traditional business model (pay for service) and a traditional mission model (give it away), making it hard to establish a perceived value from which to develop profitable pricing models. It is important to clearly define your business model, clarifying how you create value for customers both directly (through your offering) and indirectly (through how you operate).
• Very few individuals or groups have significant market history so  you will need to invest in establishing your brand establishment in the appropriate areas.
• The power of BAM is diluted by weak attempts at integrating faith with business. You need to be able to show how your Business as Mission strategy creates real impact. Offering “products plus prayer” will only take you so far.
• There is no common language or existing BAM standards which will make engaging others more difficult. Do not think that you need to have a standardized process for everything that you do; however, you do something in your business, you need to be working towards creating consistent and efficient processes, making it easier to bring others into your world and forming a basis for interacting with others.
• It will be difficult to do a good self-assessment, since there is no prototypical Business as Mission entrepreneur or organization to compare yourself or your organization to. Try and gain exposure to as many different working models from across multiple areas of business as well as other parallel fields, drawing from lateral examples of success and incorporating them into how you run your business.

On the bright side, the fact that BAM is not well established also means there is a lot of opportunity for those who are being lead into BAM. With the market as undefined as it is, there is a great opportunity for you to be the one who defines your own market or niche-market. And there is a lot of room for creativity and variety in how you get started, in fact I would say that creativity and variety is crucial at this stage of the the Business as Mission movement in order fuel true innovation. It is only through the kind of market innovation that BAM practitioners are working to create that we will be able to redefine “business as usual.” And it is only through redefining “business as usual” that we are going to show the world that there is a better Way.

So if you believe that BAM is in your future, now is the time to get started. Take stock of your capabilities and resources, research the opportunities that are within reach, and get started. I am not saying that BAM is for everyone and I am not endorsing reckless business ventures. But one of the great things about Kingdom strategy is that our successes are His successes and even our failures are still His successes. If you’re wondering where to get started, I think the Pary4BaM conference might be a good place. But I ask that you go into it having prepared in your heart that Christ might ask you to do a whole lot more in Business as Mission than just prayer.

Barrington is an amazing Kingdom company based out of Dallas with a manufacturing facility in China. I was blessed to get to know them last year and help a little bit as the worked through some organizational development challenges. Here’s how the Dallas News describes Barrington:

The plant is a Chinese anomaly. Barrington pays above-market wages with health insurance and maternity leave. Workers receive financial planning, continuing education and summertime camps for their kids. In a society that shuns the disabled, Barrington hires the physically challenged and invests in orphanages that minister to children with special needs.

“Gil and I run the company based on Christian values where everybody is intrinsically valuable, whether they’re here or in China, able or disabled,” Gowdey says.

It’s such a blessing to see how something so seemingly inconsequential as a piece of luggage can serve not only to carry the Lord’s name before kings (and presidents). But it also serves to multiply the blessings of people on the other side of the world, through employment, increased standard of living, and most importantly through the love of Christ shared with them and demonstrated to them by the efforts of David, Gil, and Ben. To me, this is validation that marketing strategy and business strategy can both be powerful components of our Kingdom strategy.