How Smart Market Segmentation Leads to Stellar Revenue Results


Marketing leaders are under a lot of pressure to produce results fast. But skimping on this vital step can result in an ineffective “ready, fire, aim” approach.


Market segmentation enables Product Management to determine which markets to address with which products. Your marketing group can then aim their campaigns at more targeted markets. Those better-qualified leads then translate into more transactions for the sales team.


This cascade effect directly contributes to strategic alignment. As we uncovered in our 2016 report, strategic alignment is critical for 2016. It is the only way to systematize revenue growth.


And it all starts right here with market segmentation.Market segmentation is an important step in defining a market research approach.


How to Complete the Market Segmentation Phase:

Market segmentation divides your broad target market up into subsets of buyers. These subsets have common needs, priorities and solution options.


To effectively segment your market and utilize the information to drive growth, answer the following:


  1. How big is your market? What is its growth rate?
  2. What industry trends are unfolding in your market?
  3. What are the needs of the market? How are these changing?
  4. What should be your go-to-market strategy for each product/solution?
  5. How do your competitors go to market?
  6. What are your competitive strengths and weaknesses?
  7. What are your opportunities and threats in the market?
  8. For your solution set, what is the life-cycle stage of adoption for your buyers?


Then, move down the segmentation chain to account, buyer and user segmentation. More details about these next three phases can be found in our previous post.


Zero in on the Right Markets:

Not all markets are created equal. Segmenting the broader market in this way can help narrow your marketing team’s focus. This, of course, makes it easier for them to hit their targets.


Next steps include:


  • Figuring out how buyers in those markets consume content
  • Understanding what market problems those buyers are trying to solve


With this information, you can begin to create buyer personas. (These profiles will be detailed further in the buyer segmentation phase.) This will help the sales team understand buyers and what they care about. This enables them to more easily capture revenue opportunities.


You can read our case studies on market segmentation here.


Success Begins Here:

Start with effective market segmentation, then move on to account, buyer and user segmentation. This will give you a comprehensive market research approach. One that then feeds into each of the strategies in the revenue growth chain.


For specific guidance on market research and creating your strategy, register for our Make Your Number Workshop. SBI spent 12 months conducting research to produce this year’s 226-page report. We’ll help you apply our findings to your organization in the Workshop. Register here and we will contact you to schedule your session.


Mike Drapeau

Makes data and analysis come alive so clients can understand the “what” and “why” and design solutions that fit the environment.
Learn more about Mike Drapeau >

Once the leader of SBI Delivery, Mike is now head of the firm’s internal talent development, so he has had the fortune to help some amazing sales and marketing leaders. He starts by earning their trust. Much of this comes from his deep base of experience. With more than 25 years in sales, sales management, pre-sales and sales operations, he’s never met a challenge he didn’t like. And with backgrounds in sales leadership, marketing, and sales operations, he shuns the idea of being a desk jockey and relishes the idea of living in the field.


Mike maintains, develops, and leverages SBI’s library of emerging best practices for sales and marketing, which leads to evidence-based solutions, custom-fit to each client. Maniacally focused on execution, Mike does not believe in giving clients fancy deliverables with no operational details. He knows that field adoption is key. After all, if behavior doesn’t change, the lift doesn’t come. Likewise, if those closest to the field adopt the solution, the client wins.

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