Have you ever encountered survey results showing all the respondents think everything is important or, worse, nothing is important? This survey output often arises in survey questions where respondents are asked to rate items on a scale, resulting in a chart like this:
Here, every option seems equally important, making it challenging to pinpoint what truly matters to respondents.
Now, imagine you are responsible for selecting the next best feature for your product, a decision that will trigger a multi-million-dollar investment to bring this feature to life. Or you are a CMO trying to decide what features will resonate with consumers as you break into a new market. Would you feel comfortable making a decision based on the above chart?
Probably not.
Unfortunately, this “everything is important, so nothing is” syndrome is a common quantitative research issue, especially with tools like Net Promoter Score (NPS) or Likert Scales, which struggle to measure incremental changes and extract meaningful differentiation between options.
Enter MaxDiff, a methodology designed to solve these exact problems.
What is Maximum Difference Scaling?
Maximum Difference Scaling, also known as MaxDiff, is an advanced choice-based tradeoff methodology used to help strategic leaders uncover better decisions about their GTM approach, products, and more. Instead of asking respondents to rate the importance of items independently, MaxDiff presents them with a set of options and forces them to make tradeoffs, indicating their most and least preferred items. The output offers crisp insights into what truly matters to respondents.
Example of what a respondent would see in a MaxDiff battery
Why Use MaxDiff?
MaxDiff can be advantageous over other research techniques for a few reasons:
Forces Choices and Tradeoffs: By requiring respondents to choose between options, MaxDiff helps highlight preferences more sharply.
Generates Clearer Insights: This methodology reveals gaps in importance and preferences, making it easier to identify key priorities.
Avoids Yeah-Sayers: Respondents can’t simply agree that everything is important or not important; they must make definitive choices.
Creates Intuitive Experience for Respondents: The format is straightforward, making it easier for participants to engage meaningfully with your survey.
Enables More Efficient and Effective Survey Design: MaxDiff efficiently captures nuanced data without overwhelming respondents with lengthy rating scales.
When to Use MaxDiff
MaxDiff is a versatile tool that can be applied to various use cases to help marketers make more informed decisions:
Prioritization of Features: Determine which features are most important to your customers to drive product evolutions.
Needs-Based Customer Segmentation: Understand and identify different customer segments based on their preferences (see below example).
Message and Branding Testing: Find out which messages and branding efforts resonate most with your audience.
Product Feature Testing: Identify the most and least desirable product features.
TURF Analysis: Extend MaxDiff’s output of your product’s most important features or criteria to inform the top combination of features for your offering via a TURF (Total Unduplicated Reach and Frequency) analysis (see below example).
How to Use MaxDiff
To get the most out of MaxDiff, here’s the structured approach we follow:
Qualitative Discovery: Begin with qualitative research to understand the broad range of needs, criteria, and options. This step ensures that your list of options is comprehensive. Note: MaxDiff won’t be able to tell you if your list of options is “good,” “bad,” or all-encompassing, so it’s crucial to identify the options in qualitative discovery to inform your next step.
Quantitative Validation: Once you have a robust list, use the MaxDiff tool in your survey platform to validate (or disprove) each option’s importance and satisfaction levels.
Outcome Analysis: The result is a prioritized list of needs, highlighting the most important and least satisfied criteria to address.
Example output using MaxDiff offers more differentiation between options.
MaxDiff is a powerful tool that brings clarity to the often opaque world of market research. By forcing respondents to make tradeoffs, it provides actionable insights that can help to inform product evolutions, better understand customer needs, or optimize messaging and branding. If you’re struggling with the “everything is important, so nothing is” syndrome in your surveys, it’s time to consider MaxDiff for more precise, more meaningful results.
For most B2B go-to-market (GTM) leaders, 2023 accelerated a trend that had, until recently, only been lurking in the background—the diminishing effectiveness of direct sales and marketing teams. The traditional reliance on tele- and email-based account management, free trials, and automated motions have the unintended consequence of decreasing the openness or receptivity of the buyers they target. Today, buyers are less receptive than ever to answering a call, much less meeting with a person or organization with whom they do not have a pre-existing relationship.
To counter this dynamic, GTM leaders have predictably turned to their channel partners and the teams that support them to provide essential pathways to expand market reach and drive the top-line growth required to achieve targets.
A Comprehensive Guide to Channel Partner Enablement
Effective channel partner enablement is crucial. It enhances relationships and drives strategic outcomes, such as expanding account relationships and increasing the leverage of commercial organizations.
In this guide, we explore the seven steps of channel partner enablement that ensure these relationships are as productive and profitable as possible. From customizing partner programs to leveraging advanced data analytics, these imperatives can transform your partner strategy into a powerful component of success.
A well-structured partner program is essential for building new and nurturing existing relationships. One sure sign of an effective program is its ability to be tailored to meet each partner’s diverse needs and expectations. While this was once a fairly straightforward exercise, the proliferation of partner roles and capabilities has blurred the lines between historical partner classifications such as ISV, VAR, GSI, MSSP, etc. In the new age of partnerships, agility, supported by clearly defined and simple program structures, best drives alignment and motivates partners to execute their roles effectively.
Best Practices:
Understand Partner Profiles: Segment your partners based on their market position, size, and typical customer base. This segmentation will allow you to tailor programs that align with the most prominent business models and partner capabilities.
Design Tiered Incentives: Implement a tiered program structure that provides partners with the requisite financial rewards and non-financial benefits for meeting different performance thresholds. This promotes healthy competition and ensures partners of all sizes can benefit and grow.
Perform a Program Health Check: Conduct a comprehensive evaluation of your partner program every two to three years to ensure it’s working as designed and effectively driving the desired partner behaviors and outcomes. This health check helps identify areas of improvement and ensures the program remains aligned with market conditions and strategic objectives.
2. Craft and Quantify Compelling ‘To-Partner’ Value Propositions
Creating and clearly defining compelling value propositions for partners that resonate at the organizational and individual levels is crucial for the success of any channel partnership. This means articulating both the higher-level strategic benefits that partners gain from the program (i.e., increased revenue-enhanced product offerings, etc.) and breaking down what the partnership might mean for the individual contributors (i.e., sales incentives, exclusive training, etc.), all while providing the quantifiable data to back up the claims and benefits. This approach helps partners see the tangible gains from the partnership, driving them to engage more fully and align their efforts with the shared goals of the collaboration.
Best Practices:
Build ‘Partner-Centric’ Value Propositions: Put yourself in the shoes of the partners you serve to refine plans for helping them achieve their business goals. Stakeholders often nuance these goals, and there is seldom a ‘one size fits all’ solution. Partner research surveys are often helpful in developing ‘Partner-Centric’ messaging frameworks.
Think Organizationally and Individually: In addition to outlining organizational benefits, emphasize how the individuals within the partner company can achieve success from the program. This might include access to exclusive training, tools that make their jobs easier, or performance-based financial rewards.
Celebrate and Highlight Success: Use case studies and testimonials from existing partners to demonstrate the real-world benefits and ROI of the partnership. Seeing peers’ success is often a powerful motivator for existing partners and has the added benefit of attracting new partners.
3. Personalize Content Around Partner-Oriented Use Cases
Personalization seems simple but can be challenging to execute. When referring to partner enablement, personalization should provide the right type of information and access to the right resources tailored to the partner’s specific needs. When implementing a personalization strategy into your program, focus on partner-oriented use cases that deliver highly relevant assets that directly support the partners’ sales and marketing motions and strategies.
Best Practices:
Start with Identification: Kick off the personalization process by conducting thorough analyses to identify the most relevant and widespread use cases for your partners. This often overlooked but critical step is fundamental for prioritizing where to invest precious time and resources for driving personalization at scale. Regularly revisit and refine these use cases based on evolving product, buyer, and partner dynamics to ensure they align with actual partner needs.
Support Content Utilization:Creating content that aligns with the most prevalent use cases and supports partner needs based on scenarios (i.e., sales scripts, marketing assets, training materials, battle cards, etc.) is only half the battle. Once built, systems must be in place that cater to each use case. This might involve specialized training sessions, dedicated support personnel for complex issues, or even white-glove marketing support for certain high-priority partners and use cases.
4. Leverage Data as a Collaborative Asset and Differentiator
Over the last decade, the prevalence of data, technology, and supporting analytics has exploded; it seems as if almost everything related to the marketing and sales process is counted, stored, and analyzed. Channel partnerships, therefore, should be more valuable than ever, with mutual clarity into account bases, pipelines, and near-instantaneous sharing of insights—yet most partnerships do not work this way. A lack of mutual trust underscored by concerns over data security and the perceived risk of losing proprietary insights and information often creates strategic deadlock between partner and provider, where each party shares only just enough information as necessary to receive the requisite compensation—in other words, transactional partnerships.
Integrating mutual data into the partner enablement program is crucial for transforming partnerships from “reactionary” or “transactional” to “proactive.” In doing so, organizations can improve their operational efficiency while enhancing the partnership’s overall value and encouraging long-term collaboration and shared success.
Best Practices:
Establish Clear Agreements: Draft formal agreements that clearly outline what data will be shared, how it will be used, and what safeguards will be in place to protect it. This should include defining the purpose and acceptable use of data, the methods and frequency of data exchange, and the duration for which data will be shared.
Use a Phased or Tiered Approach: Begin with sharing non-sensitive, less critical information (e.g., aggregate/summary data, market trends, or product performance metrics) to build confidence. Only once a foundation of trust has been established should you move towards sharing more sensitive customer data. This should be done slowly and deliberately—often starting with a single, trusted partner (and may be further bisected by product/region)—before a programmatic roll-out.
Leverage an Objective Third Party: In most cases, involving a neutral third party can help ease concerns by managing the upkeep, matching, anonymization, and exchange. This could be a trusted consultant or a data-sharing platform that ensures compliance with all agreed terms and maintains the confidentiality and integrity of the data.
Enhance Collaborative Technology: Use technology that enhances collaboration between you and your partners. Shared workspaces, real-time communication platforms, and integrated supply chain systems can help streamline operations and improve transparency.
5. Optimize Channel Partner Coverage
Optimizing channel partner coverage ensures that partnerships across the ecosystem are effectively engaged and supported throughout the partner lifecycle and customer sales processes. Though concepts of coverage, sizing and deployment, and territory assignments or compensation alignment are critical levers of success for leaders of direct selling units within an organization, they tend to be less prevalent for channel organizations (this is especially true when related to enablement). This dynamic is mainly due to organizations being more accustomed to the immediacy and attribution of direct results when managing their own sales teams, where outcomes are easily measured, transparent, and more responsive to change than their indirect counterparts. On the other hand, channel partners inherently add incremental layers of complexity, making it harder to prioritize and optimize partner coverage effectively. As a result, many channel organizations fail to incorporate this powerful lever in their overall enablement strategy.
Ensuring that partner account managers and commercial teams are executing consistent processes is crucial for the scalability and effectiveness of partner enablement programs. Regular training and consistent processes are essential, especially in maintaining alignment across various teams.
Coverage optimization starts with confirming the right types of job roles and commercial functions are in place (e.g., partner account managers, partner marketing managers, channel managers, etc.) and subsequently equipping those personnel to execute consistent processes and maintain a regular cadence of enablement activities. By refining coverage strategies and securing buy-in from sales leadership, organizations can often enhance the overall effectiveness of their channel partnerships, leading to increased sales and a stronger market presence.
Best Practices:
Sales Leadership Buy-In: Secure buy-in from sales leadership to ensure enablement efforts are supported with the necessary resources and attention.
Utilize Partner Segmentation to Inform Coverage: Segment partners based on key criteria such as tier, relationship strength, capability, market potential, strategic value, etc. Use this segmentation to guide the role requirements and ensure resources are effectively deployed.
Consistent Globally Extensible Execution: Develop operating procedures, milestones, and engagement standards for partner managers that drive valuable partner interactions. This consistency helps build trust and strategic alignment and has the added benefit of keeping management up-to-date and well-informed.
Flexible Engagement Models: Recognize that different partners may prefer different levels of engagement. To accommodate these preferences, offer various interaction models, from self-service portals to personal account management.
6. Analyze Partner Performance, Engagement, and Activity
Regardless of the type of partnership (e.g., tech, channel, strategic, etc.), a clear understanding of partner performance, engagement, and activity is essential to understanding productivity partnerships and the effectiveness of enablement efforts. As the partner technology stack has continued to expand, partner organizations increasingly leverage advanced technology and tools to gain better insight into how their partners behave.
These tools include sophisticated CRM/PRM systems, comprehensive Business Intelligence (BI) applications, specialized engagement tracking software, and cutting-edge predictive analytics platforms that curate detailed insights into how partners interact with online portals and individual pieces of content, and predict future performance trends that allow for improved enablement strategies and tactics. By integrating these powerful analytics tools into their operational framework, partner programs move beyond simple observation, enhancing partner relations and improving future interactions.
Best Practices:
Tools Must Support Strategy: Partners expect modern, easy-to-use, and easy-to-navigate tools —these are now largely table stakes in partner enablement (typically inclusive of Portals, PRM/CRM systems, data analysis tools, and marketing automation platforms). However, these tools should be thought of as additive to the overall enablement strategy rather than the answer to all challenges.
Assign Ownership to Measuring Engagement: Using analytics tools to monitor how partners interact with provided content and resources often sounds too good to be true, and many organizations struggle to find tangible value despite a plethora of data. Establishing clear ownership can help alleviate this concern and ensure that the data collected does not go unattended.
Customize Support Based on Data: Utilize the insights gathered from analytics to provide customized support to partners, helping them overcome specific challenges and capitalize on opportunities. Consider engagement intelligence when developing coverage or aligning incremental resources with partners.
7. Develop Ongoing Communication and Feedback Loops
Open lines of communication and robust feedback mechanisms are vital for building trust and maintaining long-term relationships with partners. These systems help organizations adjust their strategies and operations in response to direct input from their partners.
Best Practices:
Voice of Partner Surveys: Implement well-structured “Voice of Partner” surveys that regularly collect comprehensive feedback from partners on various aspects of the program, products, services, and overall experience.
Only Track What You Intend to Act On: It is crucial to collect feedback and act on it. Show partners that their input is valued by making visible changes based on their suggestions and concerns.
Embrace a Holistic Approach to Channel Partner Enablement
In our experience, partner organizations often become hyper-focused on one or two dimensions of enablement while overlooking how these elements work together holistically. In such instances, it’s crucial to remember that effective enablement transcends individual initiatives; it’s about developing a well-defined, cohesive ecosystem of collaboration and mutual understanding. For organizations aiming to fully leverage their partner networks, embracing a comprehensive approach to enablement is a strategic necessity and a transformative opportunity. This journey towards refined enablement empowers partners, enhances collaborative efforts, and drives substantial business growth and success.
Download our framework, “Designing a Best of Breed Partner Program”
A well-designed partner program can set the stage for success. Download our framework to learn about the eight components of a best practice partner program and three quick-start areas to accelerate channel revenue growth.
In the dynamic landscape of B2B sales and marketing, the concept of coverage design stands as a strategic linchpin, weaving together the threads of revenue generation, customer experience, and cost-effectiveness.
Coverage Design—What Is It?
Coverage design is a strategic approach to revenue generation. It involves outlining the specific channels and roles that will execute each task in the customer journey. This systematic organization of revenue motions, termed a ‘coverage model’, is key to providing a top-tier customer experience while ensuring cost-effectiveness, typically measured as the Expense-to-Revenue (E/R) ratio.
Coverage models map essential customer touchpoints to the resources required to service them. This includes both strategic and tactical levels of interaction. At the strategic level, channel models align with market segments, whereas, at the tactical level, coverage extends inside accounts and across the sales pipeline.
Two Coverage Design Types: Tactical and Strategic
There are two levels of coverage design typically approached in business operations: 1) Strategic Coverage Design and 2) Tactical Coverage Design.
1. Strategic Coverage Design
Strategic coverage design involves long-term decisions about the selection of channels used to engage targeted markets. At the highest level, this means choosing between direct and indirect coverage.
Direct coverage leverages a company’s internal resources (say internal sales) to drive revenue. It gives more control over the customer relationship, which, over time, is a considerable advantage, especially in owning customer data.
Indirect coverage, on the other hand, involves outsourcing go-to-market activities to an agent. Indirect coverage, often referred to as “the channel” in B2B tech go-to-market strategies, is attractive for several reasons. It can be quickly activated, offers full-funnel solutions, and can bundle your product with other complementary products, creating a more attractive value proposition. However, it comes with a literal cost, the channel discount or commission.
Channel (indirect) vs. Direct economics. The channel discount–13 cents per dollar in this example—essentially pays for go-to-market other than brand advertising.
Therefore, strategic coverage design involves deciding which route-to-market to choose for a given product-focus segment intersection.
2. Tactical Coverage Design
Tactical coverage design takes a deep dive into the learn-shop-buy process to map each interaction from the customer’s perspective. There are three primary models of tactical coverage in use today:
Single Point of Contact approach: One resource handles the entirety of the sales process, from prospecting to closing, and ensuring post-sales customer success.
Hunter-Farmer approach: This model bifurcates the sales team into acquisition-focused and retention/success-focused resources.
Hybrid approach: This approach is the most specialized, dividing tasks into lead generation, sales, and account management roles.
Framework for Determining Primary Sales Coverage Model
Designing an optimal tactical coverage model is a balance of three interrelated factors: customer-channel preference, seller and role capability, and economic efficiency. By considering these factors, businesses can ensure that all customer touchpoints are covered and the appropriate resources are allocated to each stage of the sales process.
The Power of Coverage Design in Optimizing Business Performance
To summarize, coverage models play a pivotal role in enabling organizations to drive profitable revenue growth while providing a superior customer experience. Strategic and tactical coverage designs form the backbone of these models, with strategic coverage choosing the ideal channels for market engagement, and tactical coverage optimizing the allocation of resources across the customer journey.
By striking a balance between channel preferences, role capabilities, and economic efficiency, an optimized coverage model can be developed, leading to enhanced organizational performance and customer satisfaction.
For a more comprehensive understanding of designing optimal B2B go-to-market strategies, download our whitepaper “A Roadmap for Modern B2B Go-to-Market—Part 1: Growth Design.” This guide offers detailed insights and practical tips to help you streamline your go-to-market operations and achieve your business objectives.
Download our whitepaper, “A Roadmap for Modern B2B Go-to-Market: Part 1 – Growth Design”
Learn what it takes to find and maintain predictable revenue growth in our essential 49-page whitepaper.
In business-to-business (B2B) operations, the term “revenue motion” refers to the strategic method of entering and expanding within client accounts. This term evolves from the more traditional “sales motion” to reflect the shift towards more customer-centric, account-based marketing, and product-led marketing strategies. Revenue motions essentially describe how customers within accounts can best identify, try, and purchase a product or solution. It is the translation of within-account targeting into a growth thesis.
Revenue motions are not just a tactical approach but serve as a blueprint for all customer-facing aspects of a business. As such, they require close collaboration between marketing, sales, and service departments. By understanding how accounts and contacts try, buy, and use the product, these departments can work in concert, using the account as the focus for their strategies.
Driving Growth with Revenue Motions
B2B organizations are increasingly recognizing the importance of revenue motions. According to Forrester Research, companies that excel at lead nurturing generate 50% more sales-ready leads at 33% lower cost. Moreover, nurtured leads make 47% larger purchases than non-nurtured leads, underlining the value of a well-planned revenue motion.
Three Primary Types of Revenue Motions
There are three primary archetypes of revenue motions: Top-Down, Bottom-Up, and Middle-Out. Each archetype has its own set of advantages and constraints that revenue leaders must evaluate prior to selection. Revenue leaders can determine which model to choose by considering three key factors: the adoption method, value transfer, and price.
Adoption method describes how potential customers find, try, and purchase a given solution
Value transfer describes who seeks to benefit from the implementation and utilization of a given solution
Price describes the affordability of the solution for a given set of stakeholders
1. Top-Down Revenue Motion
In a Top-Down motion, sales teams build and leverage relationships with high-level stakeholders to drive product choice and rely on those stakeholders to drive implementation across the organization.
Adoption Method: This motion relies heavily on senior leaders to drive standardization throughout the organization. This strategy requires direct access to key decision-makers, with marketing playing a secondary role.
Value Transfer: The value is realized by the company as a whole, with individual contributors possibly feeling detached from the product or solution.
Price: These solutions command significantly higher prices and realized revenue than bottom-up or middle-out motions, often exceeding $1,000,000 annually.
2. Bottom-Up Revenue Motion
A Bottom-Up motion is geared towards end users, only elevating to more senior levels once a critical mass of users has adopted the product.
Adoption Method: In this scenario, marketing plays a lead role in helping potential customers find, understand, and adopt the product.
Value Transfer: The product does most of the selling, relying on low barriers to entry, quick time-to-value, and broad appeal.
Price: In a Bottom-Up revenue motion, adoption is the primary objective, with revenue coming later. Thus, prices tend to be significantly lower compared to other motions.
3. Middle-Out Revenue Motion
A Middle-Out motion strikes a balance between the Top-Down and Bottom-Up methodologies, targeting both end users and C-suite level stakeholders, with a sweet spot typically at the manager or director level.
Adoption Method: A Middle-Out motion is sometimes termed “land and expand,” starting with one business unit at a customer organization and sequentially moving to new buying centers until standardization becomes a viable option.
Value Transfer: The value transfer is applicable to both individual users and their management teams.
Price: Pricing for Middle-Out motions can vary greatly due to the nature of the products and focus of the revenue motion (e.g., land and expand).
The Importance of Understanding Revenue Motions
The modern B2B landscape is evolving at a rapid pace. As such, it’s critical for organizations to adopt a more customer-centric approach to their go-to-market strategies. Understanding and employing the right revenue motion for your organization can dramatically increase the effectiveness of your marketing, sales, and service departments, leading to higher customer satisfaction, increased lead conversion, and ultimately, a healthier bottom line.
We’ve just skimmed the surface of this vast subject. To delve deeper into the intricate details of B2B revenue motions, including best practices, pitfalls, and proven strategies, download our whitepaper, “A Roadmap for Modern B2B Go-to-Market—Part 1: Growth Design.” This comprehensive guide will equip you with all the knowledge you need to craft a revenue motion strategy that fits your business like a glove. Happy reading!
Download our whitepaper, “A Roadmap for Modern B2B Go-to-Market: Part 1 – Growth Design”
Learn what it takes to find and maintain predictable revenue growth in our essential 49-page whitepaper.
Segmentation empowers businesses to tailor their marketing efforts, optimizing resource allocation for higher customer engagement and increased sales. Yet despite the positive results, many businesses fall short in their segmentation and targeting efforts. They often struggle to identify the right segments or target inappropriate market sections. This misstep usually stems from a lack of quality data, misinterpretation of market dynamics, or inadequate understanding of the business’s unique value proposition. As indispensable tools for businesses aiming to navigate the intricacies of the market effectively, this blog dives into common pitfalls and best practices of Segmentation and Targeting acting as a comprehensive guide. As Theodore Levitt rightly stated,
“If you’re not thinking segments, you’re not thinking.”
Understanding Segmentation and Targeting
‘Segmentation’ and ‘targeting’ – these terms, central to marketing parlance, carry weighty implications for businesses worldwide. But what do they entail, and why is their implementation often riddled with pitfalls?
Segmentation refers to the process of breaking down a large, heterogeneous market into smaller, homogenous groups based on shared characteristics. These shared traits could span a wide range – demographics, purchase behavior, needs, or interests. The goal of segmentation is to simplify the complex universe of potential customers into more manageable, actionable groups. By segmenting the market, businesses can streamline their decision-making processes and allocate resources more effectively.
On the flip side, Targeting pertains to the process of selecting particular market segments that a company considers most profitable or relevant. After segmentation identifies and organizes these segments, targeting swoops in to determine which of these segments to focus on and engage with.
A Fine Line: Differences between Segmentation and Targeting
Although used interchangeably in casual conversations, segmentation and targeting when viewed from a marketing lens carry distinctive meanings and roles.
Segmentation zeroes in on splitting the total market into meaningful groups. It involves organizing accounts and roles within those accounts into distinct groups, providing revenue leaders with a comprehensive picture of the most lucrative opportunities.
Targeting, conversely, focuses on the selection of specific segments for engagement. Targeting is all about deliberate decision-making—choosing segments deemed valuable for business while disregarding those that do not align with the business’s strategy or objectives.
The Art and Science of Segmentation
The world of segmentation is vast and varied, with multiple approaches, potential pitfalls, and best practices. Let’s take a deeper dive into these aspects.
Approaches to Segmentation
In the B2B space, segmentation is usually driven by the size of the accounts. The bigger the accounts, the higher their complexity. However, this complexity brings along with it a higher revenue potential and more appealing transaction economics. Smaller accounts, although easier to deal with, often yield lower transaction sizes and lesser revenue potential.
A commonly adopted approach to B2B segmentation entails dividing accounts into opportunity tiers. Although these tiers may vary depending on the specifics of a business, they typically include:
Key Accounts: Comprising 10-100 accounts, these are Fortune 500 companies (or their international equivalents) that are high-volume buyers.
National Accounts: Typically 50-500 accounts, these are Fortune 1000 companies (or their international equivalents) with core needs that the business can cater to.
Core Accounts: Ranging from 100-1000 accounts, these are large, complex accounts that demonstrate a clear need for the business’s products or services, though they might be buying at medium-to-low volume presently.
Small and Medium Businesses: Potentially reaching up to millions of accounts, these are smaller, simpler accounts that aren’t usually directly covered, but represent a significant revenue potential.
Another approach hinges on the concept of Total Addressable Market (TAM) and Total Serviceable Market (TSM). TAM provides a picture of the maximum market potential—a representation of the growth ceiling for a firm. TSM, on the other hand, filters TAM down to a more pragmatic subset of potential customers, using segment hypotheses.
The evolution of technographics has further revolutionized segmentation. Technographics offer valuable insights into companies’ technology stacks, use cases, and adoption rates. This information is particularly useful for businesses selling technology products or services, as it allows them to tailor their segmentation strategies based on the technology preferences and needs of their potential customers.
Pitfalls in Segmentation
Despite its advantages, the road to effective segmentation is fraught with potential pitfalls, including:
Inside-Out Segmentation: Many businesses fall into the trap of relying on historical revenue to segment accounts. This approach often fails because past successes do not necessarily predict future opportunities, especially in dynamic markets.
Grandfathering Account Classifications (Account Hoarding): Some organizations classify accounts based on pre-existing relationships, driven by the misguided belief that this lowers the risk of customer churn. This approach can lead to resource misalignment, hindering scalability.
Creating Too Many or Too Few Segments: While segmentation aims to capture buyer-seller nuances, overly complex segmentation matrices can drive administrative complexity and additional costs. Conversely, oversimplified segmentation models may fail to account for differences in customer value and needs, leading to misaligned marketing and sales coverage models.
Best Practices in Segmentation
When done right, segmentation can unlock significant growth opportunities for businesses. Here are some best practices to guide your segmentation strategy:
Keep It Simple: Aim for a balance of simplicity and discrimination by keeping the number of segments between three and five.
Common Segment Understanding: Ensure sales, marketing, and service organizations use the same customer segmentation to promote cross-functional harmony and efficiency.
State and Enforce Segment Policies: Establish clear guidelines, exception policies, and a governance process for account-segment assignments to maintain the structure of segments and make concessions for valid reasons.
Stay Relevant: Reevaluate segments at least once every three years as part of your commercial planning process. This allows you to retrospectively assess segment performance and evaluate new segment hypotheses, keeping your segmentation strategy relevant as your business evolves.
The Art and Science of Targeting Buyers
In the competitive landscape of business-to-business (B2B) marketing, one crucial element stands out: targeting. This process, a meticulous exercise in resource allocation, involves prioritizing segments and accounts. As one might expect, this can be a contentious issue. Inevitably, someone in the sales force will be disadvantaged when their accounts are deselected, tying targeting closely to the mechanics of territory design.
Approaches to Targeting
Figure: Segmentation and targeting can be thought of a series of magnification lenses—from wide angle (the total addressable market for the entire enterprise) to microscopic (individual buyer and influencer archetypes within accounts.)
There are three levels of targeting: Segment Targeting, Within-Segment Targeting, and Within-Account Targeting.
Segment Targeting
Segment targeting is the prioritization of segments defined in the segmentation exercise. This process might involve focusing on large enterprise healthcare companies for “Tier A” acquisition efforts based on opportunity, while explicitly stating that the focus will not be on large enterprise technology companies.
While the process of segment targeting is straightforward – with executives simply selecting segments for focus based on the segment hypotheses – the challenges lie in socialization, communication, and operationalization. This typically occurs in the annual forecasting and budgeting process, with the targeted segments receiving higher goals and more attention from both marketing and sales.
Within-Segment Targeting
Within-segment targeting has traditionally been a bottom-up process, primarily the responsibility of the sellers. They are typically tasked with examining the accounts in their territories and formulating plans to move existing opportunities through the funnel or to drum up new leads. However, these plans rely heavily on the sellers’ intuition and existing relationships, potentially missing significant opportunities.
Contrarily, a data-driven and scientific approach is a more effective method for within-segment targeting. Account data should be enriched with segmentation metrics in the CRM database and updated at least annually. This data can then be used to prioritize accounts within each segment. Seller input remains crucial, but ultimately, data, not emotion, should be the primary driver of targeting decisions.
Within-Account Targeting
Targeting can be refined further, drilling down to the specific buying situations and roles within accounts. Understanding buyer scenarios – the specific use cases that describe how buyers, influencers, budget holders, and users collaborate to generate the need, evaluate services and products, and make final decisions – is a qualitative, not a quantitative exercise. It requires conducting in-depth interviews, focus groups, or even observing stakeholders in their natural work environments.
Pitfalls in Targeting
Targeting in B2B marketing is not without its pitfalls. Missteps often involve a lack of in-depth research in Buyer Scenario Analysis, an overreliance on demographic data, and a failure to update and improve targeting strategies continuously.
Overconfidence in Buyer Scenario Analysis: Revenue professionals, while often highly empathetic, can fall into the trap of overconfidence, leading to inaccurate buyer personas and purchasing scenarios.
Overreliance on Demographics: While demographic data is easily accessible, relying solely on this can lead to a one-dimensional view of the buyer.
Stagnant Targeting: Targeting strategies should be continuously updated and improved to stay current with the buyer population.
Targeting Best Practices
Reliance on Data: While seller intuition is essential, data should ultimately drive targeting. Using enriched account data and segmentation metrics can help prioritize accounts effectively within each segment.
Understanding Buyer Scenarios: Understanding the specific use cases of buyers, influencers, budget holders, and users can offer a clearer understanding of the buying dynamics and help in effective targeting.
Continuous Improvement: Even the best targeting strategies can benefit from regular tracking and analysis of their effectiveness.
Unlock Growth Opportunities with Segmentation and Targeting
Segmentation and targeting, when understood and implemented effectively, are powerful tools for navigating the complex B2B landscape. They provide a comprehensive understanding of market opportunities, enable precise targeting, and support the deployment of resources in a cost-effective manner. However, as highlighted, these strategies can unlock significant growth opportunities.
If you are interested in diving deeper into these topics and want to establish a blueprint for growth in modern B2B, download the whitepaper “A Roadmap for Modern B2B Go-to-Market—Part 1: Growth Design.” This comprehensive guide will equip you with all the knowledge you need to navigate the complex landscape of segmentation and targeting successfully. So, don’t wait, download your copy today and start your journey to a more focused, targeted, and successful business approach.
Download our whitepaper, “A Roadmap for Modern B2B Go-to-Market: Part 1 – Growth Design”
Learn what it takes to find and maintain predictable revenue growth in our essential 49-page whitepaper.
In an era where businesses are striving to evolve, a question looms large: How can one achieve sustainable revenue growth? The secret often lies in mastering the art of successful market entry and expansion. But while companies are quick to jump at seemingly ripe opportunities, most stumble on fundamental questions: “Who is the customer?” “What does the customer value?” and “How will we deliver that value at an appropriate cost?” These questions, as pointed out by Harvard Business Review, are often answered based on mere hypotheses—leaving a chasm of uncertainty. Understanding where to focus your efforts can be transformational to find the next 100 million-dollar revenue opportunity.
Before diving into customer targeting, coverage, and the enablement practices of your go-to-market team, this blog starts with growth strategy at its core: analyzing your business landscape and putting forward a product growth strategy. To start, it’s essential to understand both your internal strengths and the external marketplace. One widely used tool to initiate this discovery process is the SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis.
How to Identify Growth Opportunities
Utilizing a SWOT Analysis
SWOT analysis is a strategic planning tool that can provide invaluable insights into your business landscape. Strengths and weaknesses are internal factors that give a snapshot of your product or offerings. Opportunities and threats, on the other hand, are external elements connected with market dynamics. It’s essential to leverage both these lenses to identify your growth markets effectively.
How do you gather this information? Internal expertise and external research are crucial. Your sales team, for instance, can provide vital inputs as they have regular interaction with customers and a keen understanding of the competitive landscape. Similarly, customer service organizations are well-positioned to shed light on the points of delight and points of frustration associated with your product or service.
The outcome of the SWOT analysis should be a comprehensive, MECE (mutually exclusive, collectively exhaustive) list of opportunities. These opportunities should be quantified in terms of potential revenue and required investment in product and go-to-market efforts. It’s not about drilling down to minute details at this stage but getting a broad understanding of the marketplace to prevent overlooking any unseen growth pockets.
How to Structure & Prioritize Growth Opportunities: 4 Strategies
Using an Ansoff Matrix as a Guide
Once you’ve defined your opportunities, it’s time to strategize. The Ansoff Matrix can guide this process by helping you structure and prioritize growth opportunities across two dimensions: Markets (Existing and New) and Products (Existing and New). The strategies defined in this matrix are Diversification, Product Development, Market Development, and Market Penetration.
An Ansoff Matrix is a helpful construct to array strategies by relative effort. Selling existing products to new customers is usually the most profitable.
Diversification: This involves launching new products in previously untapped markets. It’s the riskiest strategy as it necessitates investment in product development and market research. However, if successful, it can lead to substantial growth. To minimize risks, thorough market research, identification of potential synergies with existing offerings, and pilot testing are recommended before fully committing to a new market.
Product Development: This focuses on introducing new products or services to your existing market, capitalizing on your established customer base and market knowledge. However, businesses must be cautious not to cannibalize their existing offerings or overextend their resources. Constant innovation, customer research, and leveraging your established brand to promote new products are essential for success.
Market Development: This strategy involves expanding the reach of your existing products or services to new customer segments or geographies. It requires a deep understanding of the new target market and may involve adapting your marketing and sales strategies to resonate with the new audience. Considering potential partnerships or acquisitions to expedite market entry is also beneficial.
Market Penetration: This strategy seeks to increase sales of existing products or services within the current customer base. Being the least risky and costly strategy, it offers the quickest time to value realization. Enhancing product offerings through updates or add-ons, implementing targeted promotions or pricing strategies, and focusing on customer retention and upselling opportunities are effective ways to drive revenue growth and customer loyalty.
Case Study: Industry-leading Healthcare Provider Builds New Revenue Stream
To demonstrate the effectiveness of these strategies, let’s take a look at this case study. A major national insurance provider sought to capitalize on their new product’s rapid growth by expanding their presence in an untapped marketplace. With the product’s success proven—double-digit growth, attractive margins, and surpassed success of traditional product offerings—the insurance provider sought to build the right go-to-market plan. The client first needed an understanding of their existing/new footprint and an idea of their product-market fit. Working with Marketbridge they:
Determined a lucrative market segment projected to bring in over one million new customers in just a few years (SWOT Analysis, Market Sizing)
Built a logistic regression customer propensity model that correctly identified 70% of potential new customers
Refined marketing and sales tactics designed to aid and engage customers through the buying cycle
Activated measures in the market leading to greater share-of-voice, improved campaign performance, and exceeded growth projections
Charting Sustainable Business Growth
Identifying and harnessing growth opportunities are pivotal to any business looking to expand and increase its revenue. Applying strategic tools like SWOT analysis and the Ansoff Matrix can help businesses chart out their course to sustainable growth. While challenges may emerge in the process, the benefits of successfully implementing these strategies far outweigh the potential risks.
In order to dive deeper and craft your roadmap, we invite you to download the whitepaper “A Roadmap for Modern B2B Go-to-Market—Part 1: Growth Design” to gain the full blueprint for growth. Discover the strategies that can empower your business to reach its full potential and lead the way in today’s dynamic marketplace.
Download our whitepaper, “A Roadmap for Modern B2B Go-to-Market: Part 1 – Growth Design”
Learn what it takes to find and maintain predictable revenue growth in our essential 49-page whitepaper.
In the shifting sands of the digital era, business-to-business (B2B) sales and marketing motions have transformed drastically. Where traditional face-to-face sales pitches once dominated, technology and evolving buyer preferences have since reshaped the playing field. As a result, the rise of subscription-based models, an emphasis on customer experience, and the dominance of digital channels have all made their way into B2B go-to-market strategy(ies).
Define and Optimize Your B2B Go-to-Market Strategy
Leaders who can establish consistent and dependable revenue streams, and embrace technological disruptions and new business models, all while counteracting seasonal variations, macroeconomic influences, and competitor moves will prevail. Sounds simple right? Not so much. Such resilient revenue channels don’t arise by chance; they’re meticulously crafted. This focused approach is known as a go-to-market (GTM) strategy.
Go-to-Market (GTM) Strategy: A plan that outlines how a company will sell its products or services to customers. It encompasses everything from identifying and segmenting the target market, positioning the product or service in that market, to choosing the appropriate sales channels and setting the right price. The GTM strategy ensures that all parts of an organization are aligned and work cohesively to bring a product or service to market successfully.
Design for Sustainable Growth
Developing a robust B2B go-to-market strategy in an ever-evolving landscape may seem daunting, but the fundamental principles remain the same. The first step starts with building a blueprint to find and maintain predictable growth. In helping enterprises with complex purchase cycles, designing, diagnosing, and retooling their go-to-market strategies, the path to growth is not shrouded in mystery. Driving growth is akin to operating a factory. You begin with a blueprint, gather the raw materials, assemble, and add value to those materials in assembly lines, and finally ship the product out the door. Marketbridge’s tried and true blueprint for growth (see part 1 of our 3-part whitepaper series) comprises Market Selection, Routes-to-Market, and Organizational Structure.
1) Market Selection
It is always tempting to look inward when thinking about strategy. Starting with organizational problems, technology integrations, or new data sources can be more comfortable for executives because these issues are well-known for being easily accessible. However, growth starts outside the walls of the enterprise, and that’s where the go-to-market strategy should start. After all, the market is literally in the title of the discipline.
Three elements make up Market Selection:
Growth Opportunities: the chunky, big areas of growth that the enterprise should bet on over the next few years to grow revenue
Segmentation and Targeting: understanding the universe of accounts and the roles inside of them, and deliberately choosing targets within them (and ignoring others)
Revenue Motions: The strategy inside of an account to actually land the revenue, matching buyers with value.
2) Routes-to-Market
While the Market Selection process looks at the world from the perspective of the customer, the Route-to-Market planning process is concerned with the company getting to the customer. Route-to-Market planning includes marketing and sales coverage and channel economics; addressing channel conflict; and role design in the internal sales force. It is very much a mechanical and economic exercise, whereas market selection is an empathetic and creative exercise.
Note: Market Selection and Route-to-Market Planning are intimately linked and thus must be designed concurrently and iteratively. It would be a mistake to run each process in sequence, only thinking about coverage and role design once market selection and revenue motions have been finalized. Instead, two teams should work in concert, communicating regularly, and ending up with an integrated Market Selection and Route-to-Market strategy that works together.
3) Organizational Structure
Strategies need structures to operate. The structure of a B2B go-to-market strategy is hugely predictive of its success. Organizations with many siloed teams—particularly sales and marketing—tend to operate in those silos, regardless of the stated strategy. Geographically separated organizations tend to be geography-centric—even if sales territories are realigned toward industries
Organizational Structure can be broken down into two parts. First, the overall design of the organization is concerned with the roles, reporting structures, relationships, and specializations that will execute the go-to-market strategy. Second, capacity planning determines the right number of people that will be required to execute revenue motions in quota-bearing roles.
First Step Toward a Modern B2B Go-to-Market Strategy
While developing a resilient go-to-market strategy is crucial, the reality is that it is only one piece of the puzzle. To truly future-proof your business and set the stage for sustainable growth, a comprehensive approach is necessary. And this blog covers just one piece of the puzzle. Whereas, there are Operational and Analytical frameworks vital for market entry, and ultimately Execution and Engagement activities to drive revenue success.
For a more comprehensive look at the blueprint above, we invite you to download our whitepaper, “Part 1: Growth Design – A Roadmap for Modern B2B Go-to-Market.” We delve deeper into the graphics above and all of the components needed for growth. Learn how to effectively select your markets, choose your routes-to-market, and design an organizational structure that best supports your strategic objectives.
The B2B marketing landscape may be ever-changing, but with the right guidance, your business can not only adapt but thrive.
Download our whitepaper, “A Roadmap for Modern B2B Go-to-Market: Part 1 – Growth Design”
Learn what it takes to find and maintain predictable revenue growth in our essential 49-page whitepaper.
Example of what a respondent would see in a MaxDiff battery
Example output using MaxDiff offers more differentiation between options.
