Market Research provides a deep understanding of the market, accounts, buyers and users. It helps you differentiate your strategy from your competition, prioritize your accounts, align your strategy with buyer needs and address user problems with your products. As a result, you can bring your strategy into alignment with the external market. As long as you are also aligned with the internal strategies from Corporate, Product, Marketing, etc., you can define the right Sales Strategy.
Here is how best-in-class sales leaders
define Market Research:
What is Market Research?
Market Research is a set of actionable insights gathered from the external environment in which your company competes.
What does Market Research do?
Market Research provides external context to enable executives to make smarter decisions on how to allocate their resources – people, money and time.
What does it mean to use Market Research?
Companies that use Market Research have a better chance to succeed because they are aligned with the external marketplace.
Now that you know the definition of Market Research, it is time for the critical question.
Who in your company owns Market Research? Is there a single owner or several? If the latter is true, how are you coordinating your efforts so that everyone is on the same page?
So, what’s next? You need to define the right Market Research program. And it involves four steps: Market Segmentation, Account Segmentation, Buyer Segmentation and User Segmentation. The rest of this section will detail how to accomplish this.
Following the four steps above will enable a sales force to define the right Market Research approach to grow revenues. As a result, the Executive team will be better prepared to make decisions.
However, some teams make the mistake of performing the steps out of sequence. It’s not possible to understand every buyer in every possible market. Or every user in every possible account. Therefore the sequence needs to cascade starting with the market, narrowing the focus to the accounts in the attractive markets. Then the buyers we want to attract in those accounts. And ultimately the users who we want to serve in those accounts.
The other reason companies struggle is they are out of alignment with the other functions. Market Research is the first step, so it needs to be prepared to feed the other strategies as follows:
Corporate Strategy – The output of the Market Research will serve as the input into the Corporate Strategy. A successful Corporate Strategy must be in sync with the external market. And use the Market Research to drive the company’s allocation of people, time and money.
Product Strategy – The Product Strategy will only be successful if the product investments solve market problems of target users. And can be bought by target buyers. So the Product Strategy cannot make critical decisions without Market Research.
Marketing Strategy – The Marketing Strategy needs to know how to compete for attention in the marketplace. Knowing how to stimulate buyers and generate leads in desired accounts can only occur with grounding from the Market Research.
Sales Strategy – Market Research will govern the allocation of sales resources. It will help determine which accounts to pursue and territories to define. It will help define the process used to engage buyers. It helps Sales make all their decisions.
Talent Strategy – The last link in the chain is talent. The Market Research will help the Talent Strategy make decision around the types of talent needed to execute each of the other strategies. And do so in a way that the market will reward the company with revenue growth.
PHASE 1 – MARKET SEGMENTATION
Divide the broad target market into subsets of buyers who have common needs, priorities and solution options.
Not all markets are created equal…
Determining which markets to address with which products and which channels can be difficult. You begin to understand why when you multiply your customers’ diverse needs by the many products and channels available to reach them.
Pursuing markets that are too wide means that you are aiming off target. Without a clear understanding of market segments, limited company resources
get misallocated. And revenue goals are missed. Broad markets need to be divided into subsets of buyers who have common needs and priorities.
Complete the Market Segmentation phase by answering the following:
- How big is our market? What is its growth rate?
- What industry trends are unfolding in our market?
- What are the needs of the market? How are these changing?
- What should be our go-to-market strategy for each product/solution?
- How do my competitors go to market?
- What are our competitive strengths/weaknesses?
- What are our opportunities/threats in the market?
- For our solution set, what is the life cycle stage of adoption for our buyers?
PHASE 2 – ACCOUNT SEGMENTATION
Understand which accounts in your market are going to generate the most revenue over the shortest period of time.
Define account potential, and you will achieve it…
The Executive team is typically provided revenue potential by market level only. But they really need to know the revenue potential by account, product and buyer. When the Executive team has incomplete information, resources are not allocated correctly and performance falls short.
Complete the Account Segmentation phase by answering the following:
- What is our ideal customer profile (i.e., what defines our ideal prospect/customer)?
- How does each prospect/customer score relative to our ideal customer profile?
- What is the potential spend for each prospect/customer?
- What is the cost to acquire each customer?
- What is the lifetime value of each customer?
- What is the propensity to buy for each prospect/customer (i.e. ,how likely is each prospect/customer to buy from us)?
PHASE 3 – BUYER SEGMENTATION
Understand how buyers in your accounts make purchase decisions.
Need to know your buyer down to the last detail…
The explosion of the Internet, and buyers’ access to anything online, has altered the buying process forever. Many Product, Marketing and Sales teams still rely on tribal knowledge and past experiences. But without a true understanding of how your buyers make decisions, revenue opportunities will pass you by.
Complete the Buyer Segmentation phase by answering the following:
- 1. Who are our buyers?
- What do our buyers care about?
- How do our buyers make purchase decisions?
- What do our buyers value when engaging with our team?
- What must our team be best-in-class in to succeed in our industry?
PHASE 4 – USER SEGMENTATION
Understand the market problems that exist for users in your accounts.
Need to understand how your products/services help users accomplish their job…
Today, users have an unlimited number of resources to help them do their job. They have a wealth of free advice from the Internet, so competition is fierce. In the end, users now ask themselves which product is right for the job or whether they even need to “hire” a product at all.
Complete the User Segmentation phase by answering the following:
- Who are our users?
- What are our users trying to get done?
- What prevents our users from completing their job?
- What alternative solutions exists for users to address their needs?
- What do our users value when engaging with our team?
- In what must our products be best-in-class in to succeed in our industry?