Are You in a Hawk, Seagull, or Mouse Market?
Not all business markets are alike, much less are all business problems. But the fact that every business challenge is unique does not give executives, and the gurus who advise them, permission to fastidiously adhere to singular paradigms nor succumb to overwhelming fear in the face of uncertainty. Rather, it allows them to approach their challenges with fresh eyes.
A starting point for executives in business markets is to define their market as either a Hawk, Seagull, or Mouse.
Most business markets can be fitted into one of these archetypes.(R1) After recognizing a business market as a Hawk, Seagull, or Mouse, issues of growth strategies, organization design, and sales and marketing improvements can be appropriately addressed. In an iterative manner, leading executives intuitively apply successive paradigms to solve their business problems and shift the competitive boundaries in their favor.
The Hawk, Seagull, and Mouse paradigm competes with one recently provided by Geoffrey Moore.(R2) In “Strategy and Your Stronger Hand”, Moore examines internal operations in order to define business strategy. In contrast, Hawks, Seagulls, and Mice examines customer behavior in order to define business strategy. By taking a customer orientation rather than an operational orientation, Hawks, Seagulls, and Mice derives the successful approaches to competing and winning in business markets from market oriented insights.
Hawks, Seagulls, and Mice are the three market types defined on the transaction volume and value map. In this map, the location of a specific business market is defined by the number of purchase decisions made by customers and the average value of each of these purchase decisions.
We will examine each of these market types individually.
Hawk markets are characterized by infrequent transactions, each associated with a high transaction value. They lie in the lower right-hand portion of the transaction volume and value map. Selling high-value products and services in thinly traded markets requires a sales and marketing team capable of behaving like Harris hawks.
The Harris hawk, native to the southwestern region of the United States, is one of a few birds of prey known to hunt in groups. Like other hawks, the Harris hawk flies high in the sky to survey the landscape and quickly identify appropriate targets for capture. Once identified, one Harris hawk will swoop down to flush the prey out of the brush while the others maneuver to capture the target. The rewards are shared by the pack. The Harris hawk and their teamwork approach to capturing prey present a strong metaphor for the corporate environment in which teamwork enables the company to create customers and capture profits.
A simile can be constructed in relation to high-powered, strategically oriented sales and marketing teams in markets characterized with low-volume high-value transactions. In Hawk markets, customers require a high-touch teamwork approach to selling.
Seagull markets are the exact opposite of hawk markets. Seagull markets are characterized by numerous transactions per year, each associated with a low transaction value. They lie in the upper left-hand portion of the transaction volume and value map.
The sales and marketing strategies of companies competing in these markets mirror the approach seagulls take to capturing food. Seagulls travel in thick flocks, fly low above the sea, and are present at most any seashore on the globe. Seagulls are not picky about what they capture-from fish to crab and even refuse, seagulls will eat most anything.
Firms serving markets characterized by high-volume low-value transactions will attack their market in a manner similar to that of seagulls gathering food. With large numbers of prospective customers, each contributing a small fraction of the annual revenue, firms serving seagull markets need to create highly efficient sales and marketing engines capable of uncovering the maximal number of opportunities in their market.
Mice markets are characterized by a low volume of transactions, each associated with a low value. They lie near the origin of the transaction volume and value map, in the bottom left-hand portion.
Mice survive by scurrying across the landscape in search of an opportunity, and then capturing and exploiting that opportunity when they can. Likewise, companies in mice markets scurry to uncover and close opportunities when they arise.
Competing in mice markets requires a marketing effort that is able to seed a large number of opportunities or a sales effort that relies upon harvesting revenue streams from strong customer relationships.
Once a business is able to understand itself as operating in either a Hawk, Seagull, or Mouse market, it can then develop relevant strategies for competing and winning. Whether growth comes from internal or external sources, and whether improvements require changing sales versus marketing operations, is fundamentally dependent upon where the business wants to go within the transaction volume and value map. As the business embarks upon their growth strategy, new paradigms will become more relevant in addressing the specific challenges it faces.
Hawks, Seagulls, and Mice: Paradigms for Systematically Growing Revenue in Business Markets is the new book published by Tim J. Smith, editor of the Wiglaf Journal and Professor at DePaul University. It is the result of over 4 years of research, involving over 500 executives at over 100 companies. Get your copy at Amazon.com today.
R1 Business markets are defined as those where organizations, either another business or a government body, are make up the customer base.
R2 Geoffrey Moore, “Strategy and Your Stronger Hand”, Harvard Business Review, December 2005.