Segmenting Your Market: 2010 Style

You: a young company. What: You've recently put a product in market and you're trying to figure out how to really drive adoption!  How: Segment your market to find those most likely to buy. Sounds easy?  Its not but it can be relatively painless.  When a company first brings it's solutions to market it needs to find the  "sneezers" (to borrow Seth Godin's term), those who will help develop the market for you by being advocates evangelists for your product and spread the word.  Helping to drive  adoption.

Many marketers you hire are going to want to perform a traditional segmentation - that is, they will attack a particular geography or vertical as a way to find those sneezers. But I'd submit that's not enough.  To truly be successful in bringing your product to market you have to segment your market by "attitude", yes attitude... those individuals that have the inclination to buy from you... attitudinal segmentation enables companies large and small to find the sneezers, those most likely to buy and more importantly find those who will never buy.  This group represents a huge amount of wasted time, energy and money, which any sales rep worth their salt is anathema to.

Attitudinal segmentation is a best case example of the science of marketing.  This part of marketing is not art but science. As part of this scientific effort you will have the market answer questions using a statistically valid sample with a combination of real time, virtual and web survey data:

• Which groups within your potential market ascribe a high degree of value to the capabilities of your solution (don't say ALL because that's not true!)?
• How large are these segments and where are they (you will realize that they cut across verticals AND Geos but the analysis will provide you with logical geos and verticals to start with)?
• Where should you focus your scarce sales resources to get the most bang for the buck?
• Which groups of customers should we ignore? Or said better, which groups of customers should we only address opportunistically?
• What elements of your offer - product, service, pricing, ease of use, etc... do prospective customers find most appealing and what specifically about those attributes do they like?

The outcome of such an effort will be definition of the Buying Styles and Attitudes toward buying that are manifest in your market.  For example, in the enterprise software space, perhaps a buyer is motivated by the technology and how cool it is rather than anything else.  Or maybe the thing they care about most is the ROI of the solution. 

Knowing a prospect's buying style enables your organization to personalize the sales engagement and even the type of content that a prospective customer will receive from  your organization. Creating a customized sales and marketing engagement approach will dramatically improve your conversion rates.

B2C companies have been using attitudinal segmentation for quite some time as part of their Go-to-market strategies. B2B companies can and will benefit from this approach as well, especially when you combine such a segmentation effort with an evaluation of your offer and its attributes. By understanding what components of your offer (product, pricing, support, etc... ) are most attractive to your potential customers, you will be able to more easily adjust it to maximize uptake by those most likely to buy.  For example, if you are selling a SaaS solution, do your customer's prefer to be billed monthly or quarterly?  Do they want a super friendly easy to use interface that means more screens or a more crowdes interface but only takes one screen to complete the transaction?  You won't really know until you ask!

Remember, its not enough to merely understand your market, you must determine what you should do DIFFERENTLY to maximize the economic value of understanding your market.  This type of segmentation combined with a detailed understanding of your offer enables you to pre-test each segment's reaction to your offer and GTM strategy enabling you to make adjustments to both.

C'mon, what do you have to lose?  Customers, market share and competitive pole position.

You: a young company. What: You've recently put a product in market and you're trying to figure out how to really drive adoption!  How: Segment your market to find those most likely to buy. Sounds easy?  Its not but it can be relatively painless.  When a company first brings it's solutions to market it needs to find the  "sneezers" (to borrow Seth Godin's term), those who will help develop the market for you by being advocates evangelists for your product and spread the word.  Helping to drive  adoption.

Many marketers you hire are going to want to perform a traditional segmentation - that is, they will attack a particular geography or vertical as a way to find those sneezers. But I'd submit that's not enough.  To truly be successful in bringing your product to market you have to segment your market by "attitude", yes attitude... those individuals that have the inclination to buy from you... attitudinal segmentation enables companies large and small to find the sneezers, those most likely to buy and more importantly find those who will never buy.  This group represents a huge amount of wasted time, energy and money, which any sales rep worth their salt is anathema to.

Attitudinal segmentation is a best case example of the science of marketing.  This part of marketing is not art but science. As part of this scientific effort you will have the market answer questions using a statistically valid sample with a combination of real time, virtual and web survey data:

• Which groups within your potential market ascribe a high degree of value to the capabilities of your solution (don't say ALL because that's not true!)?
• How large are these segments and where are they (you will realize that they cut across verticals AND Geos but the analysis will provide you with logical geos and verticals to start with)?
• Where should you focus your scarce sales resources to get the most bang for the buck?
• Which groups of customers should we ignore? Or said better, which groups of customers should we only address opportunistically?
• What elements of your offer - product, service, pricing, ease of use, etc... do prospective customers find most appealing and what specifically about those attributes do they like?

The outcome of such an effort will be definition of the Buying Styles and Attitudes toward buying that are manifest in your market.  For example, in the enterprise software space, perhaps a buyer is motivated by the technology and how cool it is rather than anything else.  Or maybe the thing they care about most is the ROI of the solution. 

Knowing a prospect's buying style enables your organization to personalize the sales engagement and even the type of content that a prospective customer will receive from  your organization. Creating a customized sales and marketing engagement approach will dramatically improve your conversion rates.

B2C companies have been using attitudinal segmentation for quite some time as part of their Go-to-market strategies. B2B companies can and will benefit from this approach as well, especially when you combine such a segmentation effort with an evaluation of your offer and its attributes. By understanding what components of your offer (product, pricing, support, etc... ) are most attractive to your potential customers, you will be able to more easily adjust it to maximize uptake by those most likely to buy.  For example, if you are selling a SaaS solution, do your customer's prefer to be billed monthly or quarterly?  Do they want a super friendly easy to use interface that means more screens or a more crowdes interface but only takes one screen to complete the transaction?  You won't really know until you ask!

Remember, its not enough to merely understand your market, you must determine what you should do DIFFERENTLY to maximize the economic value of understanding your market.  This type of segmentation combined with a detailed understanding of your offer enables you to pre-test each segment's reaction to your offer and GTM strategy enabling you to make adjustments to both.

C'mon, what do you have to lose?  Customers, market share and competitive pole position.