What is the best way to segment your market?

This is largely industry specific. Definitely research your market and listen to the data. An extremely important data point that should come your way is from your sales motions and how your plays work with each audience. It's important though to resist the tempation to over segment - that's a rabbit hole that is hard to get out of. In a vertical marketing strategy the most basic of segmentation comes from which audience in the ecosystem you're speaking to. The most basic example would be if you ...Read More

Ideally you would draw on both a combination of quantitative and qualitative data to shape your segmentation research. Start with a hypothesis of who your TAM (total addressable market) is. This will help you to identify new market segments you may not have thought to target. For example, for Glassdoor our TAM is comprised of all working age adults who are either currently employed or want to be employed. Segmentation can then be used to expand the sandbox (market) that you’re playing in by expa ...Read More

First, it's important to know why you need a segmentation. Is it about go-to-market and creating more effective messaging? Is it about changing your channel / sales strategy? Is it about product development? Media Targeting? Once you have an objective or objectives, a method for segmentation often becomes more obvious.  When thinking about messaging or product development, I often find it helpful to segment customers based on common needs. In B2B organizations figuring out what types of customer ...Read More

There are many ways you could segment your market for your marketing and sales motions: from industries to personas to company size to geographies (and for B2C companies, major demographics like age, gender, etc come into play). The questions you need to ask are "Do these groups of customers have fundamentally different needs for our product?" and "Would we acquire these groups of customers in different ways?". Wherever the differences are greatest, you'll want to start there. Another key consid ...Read More

I believe the best way to segment your market is to do initial high-level qualitative interviews to get a broad understanding of the market, followed by a robust quantitative segmentation, and then follow up with in-depth qual with what you believe are your priority segments. A quantitative segmentation leverages a cluster analysis that considers: company/customer demographics and technographics (size/industry/revenue/region etc.) Attitudes - how they think/feel/pain points and perceptions of yo ...Read More

Start first by understanding what problems your product or service solves and the personas who are willing to pay for the problem to be solved. Then look at the alternatives in the market for solving those problems (products, services and DIY/free offerings) and how your product or service differentiates (or could differentiate by understanding your core competencies) against those alternatives. For instance, one company I worked at entered a well known market by providing a low cost, easy-to-us ...Read More

This all depends on the stage of your company and whether you're a PLG or SLG company. Product-Led Growth companies: You won't be able to truly segment effectively until your product is mature and you have product analytics set up. In the early stages, you should be able to identify who your early adopter target audience is through customer interviews. Then, based on the roadmap, you should have some hypotheses about the various use cases your product will be good for and the personas that would ...Read More