The Three Tiers of Business: Where Does Your Company Fit?

Have you ever wondered what a Tier 1, 2, or 3 business is? Well, every industry has a way of categorizing businesses based on select factors such as their size, number of employees, profit, partnerships, and level of output. These tiers are put into place to help business owners assess their company’s status and measure their growth. Tier categorizing is also important for a business owner to understand so that they have a good grasp on what marketing strategies are currently best suited for their business needs, and also what marketing strategies may need to be considered in the near future as their business grows.

So, you may be asking yourself what the difference between a Tier 1, Tier 2, and Tier 3 company is. Below are brief descriptions and some main characteristics to help you identify where your business falls on the spectrum:

Tier 1 Business (B1)

This category is for all the self-employed entrepreneurs who have just launched their businesses and are looking for opportunities to expand their reach. With the start of a new business also comes the first step of establishing your business brand and business identity. This can include developing a website, setting up social media platforms, and similar beginning marketing steps to help build your new business. Here are a few factors that are usually associated with Tier 1 businesses:

· Years in Business: 0-3

· Gross Revenue: <90k

· Est. Employees: 1 (self)

· Marketing Processes: 0 - 1

· Positioned Partnerships: 0 - 1

Tier 2 Business (B2)

Companies that have been in business for three or more years can be considered Tier 2 businesses. Tier 2 businesses tend to have already established their business identity and brand image through marketing investments such as small advertisements and media campaigns. Businesses in this category have also built partnerships and are expanding within their industry. The following are some identifiers for Tier 2 businesses:

· Years in Business: 3 - 15

· Gross Revenue: 100k - $ 1MM

· Est. Employees: 2 - 5

· Marketing Processes: 1 - 4

· Positioned Partnerships: 1 - 10

Tier 3 Business (B3)

Tier 3 businesses include franchises, international organizations, and corporations that have years of experience providing services within their industry. Businesses under this category know exactly what their business identity is, and most importantly have a proven brand image that is highly recognizable to their counterparts. Tier 3 businesses have frequently and fully utilized the marketing process. They usually have a good gauge on what has and has not worked for them in the past, and also what marketing tactics they would like to incorporate moving forward. Businesses that are considered Tier 3 possess the following:

· Years in Business: 15+

· Gross Revenue: $1MM - 15BB

· Est. Employees: <50k

· Marketing Processes: 5+

· Strategic Partnerships: 25+

Where is your business at and why does it matter?

Knowing where your company lands on the Tier spectrum is important for any business owner, rather new in the game, officially in the game, or currently running the game. Categorizing your business is the key to maintaining success. Better business decisions can be made when tiering is understood. Where a Tier 1 business may need a more general marketing package to get things underway, a Tier 3 business may need a more focused marketing plan that addresses missed marketing opportunities made in the past. So do yourself and your future marketing agency a favor by identifying your business tier so that your next business investment can be an investment worth the effort.

LEGEND

Years in Business - How many years in business has the company been a registered and operating business (operating as in receiving payment for a service/product)

Gross Revenue - How much gross income is this company bring in a year.

Est. Employees - The estimated employees (starting with 1 for self) does this client employ? Can even be a 1099 employee/contractor but they must be on a weekly or bi-weekly structure.

Marketing Processes - The 5 beginner processes are 1. Paid ads (Google and/or Bing), 2. SEO, 3. Digital Ads (Facebook & Instagram mainly but can include Twitter), 4. LinkedIn Ads, and 5. YouTube Ads.

Positioned Partnerships - This is a strategic partnership but with a next-tier business that can help pull the company in the lesser tier up.

Strategic Partnerships - In our tier system, we only use this for the oddity: A Tier 4 business (Blue Chips - Tesla, Facebook, Google, Sprint, etc.) because they are at the ceiling of the known business possibilities. As businesses advance, we may very well see a tier 5 business which may change this for a B3 business.

Tiering- The act of categorizing your company as a Tier 1, Tier 2, or Tier 3 bus