Late last year, I sat through a wonderful presentation at the World Marketing and Sales Forum in Melbourne, on the importance of marketing strategy. The presentation, delivered by Don O’Sullivan, an Associate Professor of Marketing at Melbourne Business School, was full of great takeaways. Most memorable for me, though, was an image of a dog chasing a flock of birds down the beach, accompanied by the caption "you don't need a plan if you're a dog", comparing its plight to that of a company attempting to market their products or services without a strategic plan. The spray and pray approach, if you like.
While Don's presentation talked to marketing strategy more broadly, this particular analogy illustrated beautifully the importance of one of marketing's oldest concepts. Segmentation. The realisation that, in the vast majority of cases, a business attracts customers who are different and want different things, and that running down the beach barking the same message to all of them, isn't going to reap the best rewards. You have to know who you're talking to in order to develop an appropriate message that talks to the needs and wants of that particular group of existing and potential customers.
The concept of segmentation doesn't discriminate between B2C and B2B, either. Just as in the B2C world, where customers will have different demographics, attitudes, behaviours and beliefs, B2B customers also come in different shapes and sizes. Corporate vs academic vs government, organisation size, industry type, buying behaviours, the list goes on. Organisations who embrace this diversity and understand the complexities of their market, are in a much stronger position to then target segments that are the most accessible and provide the best opportunity for growth and, ultimately, profitability.
There are a number of ways in which a market can be segmented. Ultimately, how you decide to splice and dice your potential pool of customers is entirely up to you. In doing so, though, you must ensure that each member of a segment is homogeneous (the same) to others in the segment but heterogeneous (different) to those in other segments. In other words, if a customer could fall into more than one segment, you need to take another look at your mix.
Market research then removes the bias, filling in the blanks to determine the size, overall value and your organisation's share of each segment. This approach provides a far more accurate assessment of the market and its potential than your gut ever could, crystallising your outlook and allowing you to make better targeting decisions and develop stronger, more relevant communications.
In an era where there seems to be a shiny new communication tool launched every other day, the inclination to naively forgo the basics of marketing strategy in favour of pushing out communications with no thought as to who you're talking to and what you're trying to say to them is greater than ever. Take a breath, diagnose the situation, make a plan and then choose the best arsenal of weapons to deliver your objectives. Don't start with the weapons, you're simply shooting in the dark, or, more aptly, chasing seagulls down the beach.