Market segmentation defines logical groups of potential buyers who exhibit similar buying behavior because they share common needs, problems, business strategies, etc. Segmenting the market helps you see behavior patterns that you can use to find and develop accounts in your territory.
High
potential market segments are the ones where the combination of market drivers
is creating enough tension to convince people to try out new solutions. It is
usually the combination of an increasing desire for enablement -the need to connect to the Internet -with
an increasing frustration with legacy constraints - historic buildings that are
expensive to wire - that creates enough
pain to motivate people to change.
There
are many ways to segment a market. Market analysts prefer traditional market
segmentation, such as company size, industry segments, geographic regions, etc.
However, in early markets you may find that it is easier to find prospects when
you segment the market using less traditional factors, such as changing
consumer behavior, emerging distribution channels, or technology adoption
profiles.
Defining
emerging market segments helps you make sense out of what is happening in your
territory, so you can find opportunities. There are many sources for insightful
information about market trends and emerging customer needs - business and
trade magazines, newspapers, and market research reports, etc. Look for patterns
in the information to figure out how the energy of the market drivers is
causing segments to emerge.
Why would someone want to buy your
technology solution?
As companies try to capture the opportunities created by market change they
implement new business strategies. Since your technology promises to help them
implement these strategies faster, better or cheaper, they consider buying it.
This is the primary motivation for technology adoption.
Refine
your understanding of why people will adopt your technology by considering the
strategic, economic, operational and technological reasons they need the new
solution.
First,
consider the strategic
motivations for adopting a new technology solution.
How can the new technology enable new business strategies, create competitive
advantage or dramatically improve performance?
Next
consider the economic
motivations of adoption. What are the financial
benefits of implementing the solution? Consider the 'above the line' benefits -
incremental revenues and increasing market share - companies can reap from
applying the new capabilities to emerging customer needs. Also, think about the
'below the line' cost savings that happen when new technologies enable you to
improve operational efficiency or increase the productivity of other resources.
What
are the operational
motivations for adoption? How could the new technology
improve manufacturing processes, increase capacity without incremental capital
investment, lower inventory carrying costs, etc? Think about the many operational
problems the new technology can solve.
Finally,
consider the technological
advantages of adopting the new solution. Many times
your very first buyers will be other technologists who are motivated by the
technological brilliance of your new, more elegant solution. What are the key
technology problems that your new solution solves? The answer to this question
also helps you identify the legacy constraints that are creating tension in the
marketplace.
Evaluate
each potential prospect in your territory and identify what might motivate an
account to consider your solution. Align what you know about their business
strategies and technology needs with the key motivations of an increasing
desire for enablement and an increasing frustration with legacy constraints.
This activity tells you why they will buy your solution and help you define
market segments to explore for sales opportunities.