One product for “everyone from 9 to 90” is not a marketing reality. Pursuing markets that are too broad means you are aiming off target. Without segmenting the market, your resources are spread too thin and revenue goals are missed.
In a world where everyone wants to feel special, targeted marketing produces results. This is where market research comes in. SBI’s free report, How to Make Your Number in 2016, explains why market research is foundational. Today we will discuss how market research helps you focus on market realities.
There are four phases of market research when determining who to market your product to. We will go through each phase in turn. Answer the questions in relation to your products to find your best focused marketing segment.
Phase 1 – Market Segmentation
Market segmentation divides the 9-90 market into subsets with common needs, priorities and solution options.
This blog post “How smart market segmentation leads to stellar revenue results” explains why market segmentation is the first and possibly most important step. It prevents the temptation to “ready, fire, aim” in your marketing efforts.
The smart market segmentation post includes eight questions to identify your most profitable market. (They can also be found on page 54 of our 2015 report.)
Some of them are:
- How big is our market? What is the growth rate?
- What are the needs of the market? How are these changing?
- How do my competitors market their products/solutions?
- What are our opportunities/threats in the market?
Phase 2 – Account Segmentation
The next step is to break the market segment into account segments. You need to know which accounts in in your optimum market market will generate the most revenue in the shortest time. The account segmentation exercise results in detailed customer profiles including account potential and account scoring.
The SBI exercise provides six questions such as these on pages 42-43 of the report:
- What is our definition of an ideal customer?
- What is the cost to acquire each customer?
- What is the lifetime value of each customer?
Phase 3 – Buyer Segmentation
Buyer segmentation is knowing how buyers in your accounts make purchase decisions. SBI’s How to Make Your Number in 2016 has five questions to find this knowledge. Here are a few samples:
- Who are our buyers? Understand your buyers and what they care about.
- What must our teams be best-in-class in to succeed in our industry? Determine your critical success factors.
Phase 4 – User Segmentation
Remember, your customers have unlimited resources to help them do their jobs. You need to understand the market problems that exist for users in your accounts. Be their answer when they ask themselves which product is right for the job.
Understanding your users’ frustrations shows you the solution they are most likely to chose.
SBI offers six questions like these to define your ideal user segment:
- Who are our users, and what are they trying to accomplish?
- What alternative solutions exists for users to address their needs?
- In what must our products be best-in-class in to succeed in our industry?
We can help
SBI is entirely focused on helping you match your product to marketing realities. You are not alone. To have an SBI strategist come to your office for a individualized workshop, contact us. You will also receive a copy of the report, How To Make Your Number in 2016.