Segmentation, Targeting, and Positioning
A Market Size of One
Marketing is about creating sales conversations. But ideally with only one person; the buyer.
Think of the ‘market’ as a huge party. Everyone is there and you’re trying to find someone to talk with about your product. There are some people that will find what you have to say boring, some that think it’s interesting, a few that want it but aren’t ready, and fewer still that will buy it now.
Market Segmentation, Targeting, and Positioning (aka STP) is the one the most valuable marketing activities that you can execute to improve the effectiveness of your marketing efforts.
Let’s talk numbers. There are over 32 million businesses operating in the U.S. in 2021. In one STP exercise we found that only 60,000 of those businesses were viable targets and further that only 5,600 would be ready to purchase NOW. The net impact was that sales and marketing effectiveness improved by more than 40% because we were able to focus marketing spend and sales efforts to create conversations with only the businesses that were ready to buy.
Market Segmentation
Segmentation is the difference between shouting from the rooftops hoping that someone who cares hears your message as opposed to quietly speaking in a room where every person is straining to hear what you’re going to say next.
Good segments have these characteristics
- Unique – each person (B2C) or business (B2B) can only fit into one segment
- Measurable – it’s easy to count the number of members in each segment (this how market sizing is done)
- Actionable – the segments have meaning to the business, i.e. we sell to this one and ignore this one
- Sizable – the segments are somewhat uniform in size and they are large enough to matter
Targeting
Targeting is the act of taking action on the insights learned from market segmentation. It is sometimes confused with the creation of an Ideal Customer Profile (ICP). Targeting is mush more valuable because it helps find your ideal customer, and just as importantly, the people that are not.
Targeting start with your segments, or groups of people or businesses. We then apply a process called relative targeting to determine which of these groups or segments would be the most interested in your service and more importantly ready to buy it.
Relative Targeting
Often business leaders will focus on who could buy their products instead of focusing on who will buy. Finding characteristics that help us separate the could vs. will is the purpose of relative targeting.
Relative targeting uses information about your capabilities combined with the customers needs to find the perfect matches for services. It’s a process that builds alignment between sales and marketing and is the most critical element for driving better marketing ROI.
Positioning
Positioning is how we determine what to say too fast track the sales conversation. It’s not messaging. It’s the process used to learn about what matters to your buyers and how can you quickly engage them in a way that makes it an obvious decision to buy your product.
At GTM NOW we use a conversation methodology known as a commercial insight. This is a technique by which you create engagement by sharing an insight that a prospect is unaware of but that also positions your services as the only solution.
For example, you probably know that less than 25% of sales people make their quotas, but were you also aware that the typical prospect has the attention span that is less than a goldfish? Thanks TikTok. By leading with an insight a sales person can stretch out that 8 seconds of attention span to several minutes, enough to get a sales conversation started. At GTM NOW we are experts at finding the insights that matter to your prospects and helping show your sales people how to deliver them.
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