We are revising our V/TO® and realize that AI has lowered our client onboarding and delivery costs so significantly that we can now profitably serve smaller companies. How do we decide whether to expand our Target Market to include these lower-tier clients?

Question

Tyler Smith · Accepted Answer

When technology drastically lowers your cost of delivery, it is tempting to expand your target market to include smaller companies that were previously unprofitable to serve. However, expanding your target market without extreme discipline is a primary cause of strategic drift and operational friction. Before you change a single word on your V/TO®, your leadership team must evaluate this opportunity against your Core Focus.

Use your next quarterly meeting to pressure-test this market expansion. Ask yourself whether serving these smaller clients aligns with your passion and your niche. If your passion is helping mid-market enterprises solve complex operational challenges, chasing high-volume, low-margin micro-businesses will dilute your team's energy and distract your leadership.

Next, look at the operational requirements. Even if delivery is automated, smaller clients often require a different style of account management, customer support, and onboarding. You must assess whether your existing Accountability Chart can handle this volume or if you need to create a completely separate, low-touch service seat.

If the data proves you can serve this new segment profitably without distracting from your core business, you must define them as a distinct target market tier on your V/TO®. Establish rigid boundaries, ensuring that this low-touch tier is handled by dedicated, automated pipelines that do not pull your high-level strategic advisors away from your premium clients. If you cannot guarantee this operational separation, reject the expansion and double down on dominating your core market.