Effective market research centers on segmentation.
In fact, it involves four phases of segmentation.
Without segmenting your audience, it’s easy to pursue markets that are too wide. Segmentation allows for much more targeted strategies.
Segmentation is THE most critical part of your market research strategy. Here’s why Effective market research centers on segmentation.
Segmentation Helps the Product Group.
The product group benefits from segmentation especially when it comes to product investment. When they are working with more targeted market groups, it’s easier for them to:
- Decide what investments to make and when
- Price products so they can be bought by target buyers
- Create products that solve real market problems
- Enable Marketing and Sales to succeed
When product managers understand how groups of buyers make decisions, theymake better decisions. They can capture revenue opportunities and identify areas where products can solve problems.
Ultimately, segmentation leads this group to focus product efforts on customers with greater potential. When they cater to high-potential segments, they set your marketing group up for victory.
Segmentation Helps Marketing
Segmenting your broad target market into subsets of buyers enables Marketing to excel. Once buyers are organized into groups with common needs and priorities, Marketing can:
- Pursue a much narrower market, increasing the efficacy of marketing campaigns
- Determine which markets to address with which products and channels
- More deeply understand each market segment
- Allocate team resources more efficiently
- Better decide how to compete for attention in each segment
- Establish a more effective content strategy
Customer segmentation enables your group to focus on market segments that have potential. They can put their attention on attracting better, more qualified leads. And those better leads set the sales team up for victory.
Segmentation Helps Sales.
Segmentation helps Marketing provide Sales with better leads. But it also helps Sales meet customer needs, and improves their customer profiling. With market segmentation, the sales team has a better idea of:
- What customers and accounts to call first
- Where the best opportunities are
- How to improve their sales results
- What content to deliver to whom
Market segmentation enables sales and marketing to align more effectively. Especially when it comes to content strategy and lead generation. Finally, segmentation helps optimize sales territory mapping.
Where Market Segment Decisions Must Begin.
Market research will determine what segments exist. But corporate strategy should be the first line of decision-making in regard to approach. It should establish which market segments the company is going to compete in.
For the executive team to make good decisions, they must have all the information. Make sure they know the revenue potential by account, product and buyer. Not just by market level.
Understanding which markets and accounts have the greatest potential assists in allocation, too. Budgets and resources can be aligned to high-potential segments for more impact.
We dive much deeper into market research and strategic alignment in our Make Your Number Workshop. Register here for a one-on-one session with an SBI expert.