article | September 21, 2014
Are You Missing the Heart of Your Marketing Strategy?
The CEO is demanding results and it doesn’t get any easier next year. In my last post, I discussed how the annual marketing planning cycle is upon us. I gave you the 6 steps to include in your planning process. However, there is one critical step you must complete before planning.
Segmentation is a foundational step found in world class marketing strategies. In SBI’s annual marketing research report this was validated. The report studied how top producing marketing organizations landed on the right marketing strategy. Segmentation was the common first step in their marketing strategy methodology (Download the complete report at this link.) Unfortunately, Marketers frequently hold back on or altogether skip the critical 1st step. Skipping this step will cause your team to thrash. All of their prospecting efforts will be guesswork. So before you start planning or investing in initiatives, execute Segmentation.
What is Segmentation?
Segmentation is where you gain an in-depth understanding of the market, accounts and buyers. This will help you differentiate your marketing strategy from your competition. You will know which accounts to prioritize. You will be able to align your marketing strategy with buyer needs. As a result, your marketing strategy will be aligned with the external market. Just make sure it is also aligned with internal strategies. For example, are you aligned with internal strategies from corporate, product, and sales? If so, you are on your way to defining the right marketing strategy.
There are 3 phases to the Segmentation step:
1 – Market Segmentation
Divide the broad target market into subsets of buyers who have common needs and priorities.
Not all markets are created equal… Determining which customers to serve with which marketing channels can be difficult. Multiply your customers’ diverse needs by the many marketing channels available. Pursuing markets that are too wide often means that you’re aiming off-target. Gain a clear understanding of market segments. This will prevent limited sales and marketing resources from misallocation. Broad markets need to be divided into subsets of buyers who have common needs and priorities.
To complete the Market Segmentation phase, you need to answer the following questions:
2 – Account Segmentation
Understand which accounts in your market are going to generate the most revenue.
The marketing team is typically provided revenue potential by market level only. What they really need is to know the revenue potential by account, product and solution. Incomplete information results in poor campaigns, programs, and offers.
To complete the Account Segmentation phase, you need to answer the following questions:
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 information channels online has altered the buying process forever. Many sales and marketing teams still rely on tribal knowledge and past experiences. Without an updated understanding of how your buyers make decisions, revenue opportunities will pass you by.
To complete the Buyer Segmentation phase, you need to answer the following questions:
Key Takeaway: Have you skipped Segmentation? If so, you’ve jumped ahead before building a strong foundation. World Class marketing leaders invest in defining their markets, accounts and buyers. Only then can they engage in the planning process and future marketing strategy steps. By segmenting first, you improve your chances of success. Sign-up for SBI’s Marketing Workshop to get the complete overview of a world-class Marketing Strategy.
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