🕵🏻‍♂️ Market segmentation

Hey ,

There are many B2B companies that don’t have a clear ICP and spread their efforts thin by targeting and prospecting different verticals with the same one-size-fits-all message and marketing tactics.

Instead of creating awareness, capturing demand from a well-defined ICP, and educating their target accounts, they usually adopt a throw-everything-at-the-wall-and-see-what-sticks sort of approach.

As a result, they end up being "Jack-of-all-trade, master of none", one more vendor ignored by a majority of their (key) accounts.

If it helps, I’ve been there too, . Made that same mistake in the past. And today, I’ll show you what to fix and how to do it.

But before we get right into it, have you saved your spot for our 4th ANNUAL FULLFUNNEL SUMMIT?

If not, then click on the image below to grab your free ticket.

Now, let’s get to the meat of the matter.

3 steps you need to take to define the most lucrative market segments

In developing a GTM strategy, those who say that ICP is the first step (after goals, objectives, revenue analysis, and marketing role) are definitely making a huge mistake. The first step is rather market segmentation.

Here’s why.

While on the surface your buyers are buying products to meet a common general need (e.g., automating processes), in reality, each segment has different needs, different reasons for buying, and a unique buying process.

Hence, it is safe to create a separate ICP for every market segment that you are targeting. Why? Simply because all segments are not created equal.

Some of them are easier to target. Some have a higher purchasing power. And some are growing or stagnating.

Therefore, finding the most prolific and lucrative market segments can have a HUGE impact on your GTM strategy and revenue.

Alright fine, got you…but now how do I define the most lucrative market segments?🤷‍♀️ Glad you asked, .

Here are the 3 steps you need to follow:

1. Revenue analysis by geo markets and verticals;

2. The analysis of your best customers; and

3. Customer research

Let’s dissect each of these 3 elements, real quick.

1. Revenue analysis by geo markets and verticals

Look at historical revenue, churn rate, ACV, and the number of customers to define the first set of markets and segments to focus on.

Usually, you’ll end up with 5-7 segments that generate >80% of revenue.

2. The analysis of your best customers

What do these companies have in common?

E.g. They are actively recruiting for a specific position (VP of Innovation).

We have a defined (but customizable) set of standard segmentation criteria, including:

• Competition

• Segment size

• Lifetime value

• Segment growth

• Purchasing power/price sensitivity

• Advocacy potential

• Track record

• Decision-maker accessibility

• Profitability

These data will be used as non-standard segmentation criteria in a market segmentation scoreboard.

The next step now is to score each segment in order to:

• get a holistic view of the target market segments;

• select the most promising segments;

• create a crystal-clear ICP;

• develop your marketing and sales processes according to the way customers from a specific segment do business

Need help defining the most lucrative market segments you should focus on? Sign up for our market segmentation workshop. It’s just 90 minutes and cost-effective.

3. Customer research

Many B2B companies would rather skip this process and jump right into refining their marketing and sales tactics because it's time-consuming and “not scalable”.🤦‍♂️

But in reality, that's exactly why their marketing strategy is similar to a scenario where you're trying hard to fill a leaky bucket of water.

Dear , you need to do your due diligence and get to know your potential customers well.

One of the best ways to do this is to interview your existing customers to find out how they research and purchase products like yours, and more importantly, what factors influence their buying decisions.

Here are 6 groups of questions you need to ask your customers during the interview:

1. Buying triggers: what leads them to start looking for products like yours?

2. Research process: where and how do they do their research? What information are they looking for? What questions do they have when evaluating and comparing different products?

3. Decision-making process: what influences their decision? Who is involved in approving the product purchase?

4. Value: what business outcomes does the product generate for your customer?

5. Functionality: how will the product be used by the business? What challenges does your product solve?

6. Channels: where do your customers get industry or professional information from? Who do they follow?

The insights you’ll get from the interview will help you to:

• Better qualify your accounts and refine your ICP;

• Improve your positioning, value proposition, and messaging;

• Improve your sales deck, pitches, and ads;

• Create content your buyers are searching for;

• Adapt your marketing and sales to the way your customers are buying

For more insights on customer interviews, check out this podcast featuring Andrei Zinkevich and Zineb LAYACHI.

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Adechina ODJO