Archives for posts with tag: Addressable Market

In our previous post on the 15-step B2B marketing process, we saw how crucial it was to segment your addressable market.

Now you have to select and target the segment or segments you will go after first, and identify some of the companies in that target segment.

To give your marketing process or strategy the best possible chance, you want to build on the excellent analysis you’ve done so far and go after the juiciest segment, the segment that you think is your best shot. This approach is exemplified in the approach recommended for products that represent discontinuous innovation and disrupt the way that market has previously been served. The excellent Crossing the Chasm book by Geoffrey Moore talks about establishing a ‘beach head’ and owning that segment before expanding to other segments.

Regardless of your company size, my strong recommendation is that, in addition to targeting a specific segment you also shortlist and maintain a list of specific companies within that segment that you want to do business with. If getting 5 of your ‘hot list’ prospect customers on board would make a great year for your business, then draw up a list of 50-100 of them to give yourself a decent chance of hitting your goal.

When you’re marketing to the whole segment, then, your outbound efforts will also provide ‘air cover’ for you to supplement with direct, one-to-one conversations with the companies on your hot list.

So, you’ve decided which segment you’re targeting. How are you going to tell that segment about what you have and why they should pay atttention? That’s the next step in our 15-step B2B marketing process.

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In our fourth B2B marketing step we profiled our addressable market. Now we have a detailed picture of the market we’re trying to market and sell to. This is good. If we don’t understand the market and where it needs our help, then we can’t help.

The fifth B2B marketing step is segmenting our addressable market. That’s right, we’re going to further divide our market. Imagine that your market is a pizza and you’re going to slice it up. These slices are market segments, except that the process of deciding how you slice up your market is not that straightforward. It’s also crucial.

Many companies segment their market by the obvious factors like geography, size and so on. They’re perfectly valid, but they may not be the best ways to divide the market into alike groups. You could segment by attitude to risk, openness to your type of solution, cultural bias, stage of maturity, type of business problems, type of buying process for your solution; the list is as long as you want to make it. The trick is to to segment according to what is most compelling for your offering and by extension your marketing.

Imagine that you can only segment your market in 2 ways, and each way is an axis on a graph. The x axis is your first segmentation ‘knife’ , the y axis your second. Then you have to plot the companies or company types on the graph according to where they fall on each axis. Then you have to decide which cluster of companies or company types you are going to target. When you see your market visually laid out like this, according to the segmentation axes you have picked, then you understand how important it is that you segment in the right way.

Get your segmentation right and your next two steps are easier and more accurate.

In the third step of our B2B marketing process we eliminated the customer groups we weren’t interest in pursuing so that we could concentrate on our addressable market. Now we need to understand more about that market.

The fourth B2B Marketing step is to profile your addressable market. Fortunately for us, we might have done some of this work already when we researched the whole market in our second step.

Now comes more homework. You need to find out and record the important things about the addressable market that can help you shape your offering to it. Here are some of the things it would be good to know:

– the obvious stuff, like location, industry, size, how the market operates

– any legal or regulatory aspects to the market that govern how it works

– pressure and drivers on the market. What are its players trying to do and where do they feel pain?

– the typical buyers in this market. Job roles, personas, other people of influence

– the decision-making process in general. Simple or complex, short or long, few hurdles and people involved or many?

– the cultural aspects to the market. Is it a good cultural fit for you to sell to? Do you think and work similarly to it?

You can find out much of the standard stuff from publications like annual reports and resources like the web or social media, but the more esoteric information can really only be gleaned over time by networking, personal experience and asking around. The better you can profile your addressable market, the better you can segment it and decide where to go first.

In our 15-step B2B Marketing process, we first covered defining what you’re trying to do, before researching your market. In the third step we start to home in on our target audience, over a series of steps.

You’re not going to be targeting the entire market; it’s too big. You should resist the urge to appear to be all things to all people. The third step, therefore, is to define your addressable market. To do this you call out not only the areas you’re going to address, but also the ones you’re not.

Areas you’re not to purse might be defined by region, vertical, size of company, size of deal, attitude to buying your products and services, and so on. Being strong and not going after business you’ve decided not to pursue is as important as is your focus on the areas you are going to pursue, and it’s important you stay true to this and don’t be tempted by stuff you know is either a poor fit or a tough sale.

For example, if you provide outsourced management services to a certain vertical, you might want to discount those companies who have an in-house manager for those services, or those companies who do not have a culture or a practice of outsourcing services, preferring to do it themselves.

Once you have stripped away the chaff from your market and eliminated the areas you’re not going to pursue, you’re left with the wheat – your addressable market. From then, it’s useful to try and calculate the size of your addressable market, so that you can start to think in realistic terms about what market share is achievable for you over the coming periods.