The universe of markets and buyers are incredibly diverse and your decisions about where and whom to target can make or break your revenue performance. A company can’t be all things to all buyers in all markets. As the competitive landscape is always changing, with more players vying for prospects’ time and attention, it is vital to select markets where you can effectively compete and win then continuously segment the market to isolate specific audiences to engage at the right time and right place with the right message.
Markets & Buyers is the part of the Revenue Architecture methodology. It is a market segmentation process – a process to select the right markets to compete in, isolate audience segments for engagement, and prioritize your campaign and program portfolio.
There are three steps in the Markets & Buyers process:
Select Markets: Identify ideal buyers, analyze markets based on attractiveness and ability to compete and select markets to enter or exit.
Segment Audience: Isolate audience segments and identify buying centers / decision making units (DMUs) and personas that pain points.
Prioritize Engagement: Prioritize the campaign portfolio base on market opportunity and internal readiness.
Identify ideal customers and assess markets based on their attractiveness and your ability to compete. By factoring in the makeup of the competition and your company’s resources for entering the fray—you can determine the most suitable markets for your competitive efforts.
Identify Your Ideal Customer Profiles
Identify ideal customer profiles for different offerings so you can describe prospects with the desired attributes. An Ideal Customer Profile consists of demographic data accumulated from market research. The goal is to identify a group of people who would want, and could afford, your product or service.
Prioritize profitable customers with willingness to form long-term relationships. Use your best existing customers as a reference and identify pain points and needs – including wants they may be unaware of, or that don’t yet exist. What are the characteristics and attributes of your best current customers? Different industries will have different criteria. Some of the factors you might consider include:
- Lifetime value (LTV)
- Length of the buy cycle
- Purchase frequency
- Vertical industry segment
- Company size
- Key purchase Criteria (KPCs)
- Technology infrastructure / installed technology
- Buyers and influencers
- Number and type of end-users
Assess Market Attractiveness
Consider the health of your competitive position in your chosen markets and adjust accordingly. Perhaps to remain competitive in your selected market, you will need to make changes to your offerings. Actively de-select markets where the competitive situation has become less favorable. Some steps to consider:
How attractive is the market?
- What kind of customer segments exist and how are they characterized?
- What are the attributes of decision-making units (DMUs) and the buyer personas?
- What is the size of the Target Addressable Market and the percentage of active TAM?
- What is the market outlook? Is the market growing or contracting?
- What factors will impact market growth over the next 12-36 months?
- What are market, technology and product trends and what type of impact will they have?
- Are there any existing or emerging threats or opportunities?
- What is the current penetration and how has this changed?
- What is the customers’ purchasing process and criteria?
- Are customer relationships “sticky” and what drives customer loyalty?
- How often do customers evaluate providers and what drives switching?
- Are there recent market trends that impact evaluation and/or purchasing cycles?
- How can we access the market? What role do channel partners play?
Are we competitive?
- Who are our major competitors and what are they doing to differentiate themselves?
- What are our competitive strengths and weaknesses?
- How do competitors perform against customers’ purchase criteria?
- How satisfied are customers of competitors?
- How do our offerings stack up against competitive offerings?
- What gaps need to be addressed?
With markets selected, now it’s time to segment the markets and isolate audience for buyer engagement. The goal is to isolate specific segments/ sub-segments of the selected markets to engage based on a variety of factors.
- Segment existing customers. It costs more to acquire new customers than to keep existing ones so a good strategy is to identify which existing customers need focus to ensure retention and/or to maximize expansion. Consider factors like customer lifetime value and product /service penetration/ whitespace.
- For the currently engaged prospect universe, identify behavioral and buying cues and insights from digital engagement and take advantage of intent data from 3rd party data services to discover buyers who are likely in an active buying process.
- Re-engage dormant leads that may be closer to a buying decision.
- Identify new target segments and primary decision drivers and the key shared attributes of accounts and individual buyer types to pursue with outbound or ABM programs.
Prioritize audience segments and buyers to engage for different offerings based on their attractiveness and your readiness. While the audience may be attractive, the sequence of your engagement portfolio and campaign calendar should also consider your internal readiness. Of course, for high priority segments, you may want to aggressively mitigate internal readiness issues.
Consider the following in prioritization.
- Key Trends
- Market Health
- Customer Adoption Rates
- Importance to the buyer
- Your Solution Delta
- Domain Knowledge
- Messaging Readiness and Impact
- Sales Readiness and Enablement
- Database Quality and Completeness
The market segmentation process is vital to success. By understanding your ideal client profile, selecting markets to compete in and isolating buyer segments, you can prioritize and focus your buyer engagement strategies and realize more predictable and sustainable revenue performance.