lead gen in the dark The field is clamoring for leads and the CEO is demanding results. More often than not, I find marketers take the “Ready, Fire, Aim” approach to lead generation.


Acct Seg Quote resized 600



Developing lead generation capabilities is essential.  The problem is that not all leads are created equal. Unfortunately Marketers frequently skimp or altogether skip the critical 1st step in the process: Account Segmentation.  Who is best fit to become my customer?  What is the size of the potential market? Where should I focus my marketing efforts for the greatest ROI?  Account Segmentation answers these questions.  So before you go investing in a myriad of lead generation initiatives, execute step one.


In this post I want to walk you through the main components of account segmentation.




A key benefit of account segmentation is clarity around who is best fit to become your customer.  To do this, define your Ideal Customer Profile (ICP) Formula.


ICP Formula resized 600


The ICP formula consists of two critical elements:


  1. Propensity-to-Buy Factors.  Using existing customer data and field input, determine the firmographic qualities with greatest market affinity.  Simply put, what does a good customer look like?  These are the most important factors when identifying a potential customer.  Both marketing and sales should be integral stakeholders in the process.
  2. Factor Weighting.  Although important, each factor is not weighted the same.  Leveraging both marketing & sales feedback, weights are assigned based importance.  Often weights vary from region to region, vertical to vertical and product to product.


ICP Formulas are not static. As your business grows and your market develops, the ICP formula will also evolve.  Additionally, companies with multiple products/offerings can have multiple ICPs. 



After defining your ICP, the next step is determining the size of the potential market.  To do this, you must first perform a Frontier Analysis on current customer data.  A Frontier Analysis is a means of calculating the potential spend of a given company.


Here are the steps:


  1. From your ICP formula, select the 2-3 most weighted factors
  2. Filter your customer data using these factors and capture the corresponding spend data
  3. Select the 80th percentile spend figure
  4. Using preferred data vendor, pull list of prospects
  5. Filter prospects using 2-3 factors from Step 1
  6. Multiply # of prospects and 80th percentile spend figure
  7. Determine market potential by segment


From Figure 2 below, the 80th percentile spend is $345K.  Assuming there are 500,000 prospects in the defined segment, the market potential is $172,500,000.


Frontier Potential resized 600



An Account Segmentation exercise delivers a prioritized list of current customers and prospects.  Your ICP formula defines who is best fit to be your customer.  The Frontier Analysis calculates the market potential by segment.  The combination directs where you should invest your resources and time based on propensity-to-buy and potential spend factors.  You want to focus on segments with the highest ICP rating and greatest market potential.


Building on account segmentation, marketing can now best determine where to invest their lead gen efforts.  It’s the springboard for both their corporate and field marketing initiatives.


CALL TO ACTION: Is your lead gen strategy “Read, Fire, Aim”?  Have you skipped the critical first step of account segmentation?  If so, you’ve put the cart before the horse.  World Class marketing leaders invest in defining their Ideal Customer and calculating the total market potential for their products and services.  Only then do they engage in building their lead gen initiatives.