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Segmentation: Why Marketing Shouldn’t Write Checks Your Product Can’t Cash

I got a response to this post via email which can be summarized as “Why does differentiation for tech products always have to be around technology?  Most successful companies I know had me-too technology but a laser focus on their segment”.  Good question (you could try commenting on the blog next time – huh, bub?)

I agree that folks marketing technology products often focus too much on technology and not enough on other parts of the mix that are potential differentiators, in particular sales channels, pricing models, partner/solution ecosystem and go to market strategy.  Most of the time new products in the technology business start out as technology ideas, not necessarily ideas for a new business or an idea related to an unmet customer need (and I don’t mean technology when I say that) per se.

By all means, focus on a segment.  Who are the buyers in the segment?  Understand how the buyers make decisions and who they turn to for advice.  Make sure you understand what pricing and distribution models work for that segment.  Think about the entire ecosystem around the solution. Are their partnerships that would help you differentiate your solution? Make sure your Go To Market plan makes sense.  Where do folks in your segment find out about products?  Who influences their purchase behavior?  All of that is important.

But don’t forget that the product has to make sense too.  I worked at a company that tried for years to position their successful large enterprise product to smaller companies by simply dropping the price and making it available through different channels.  The thinking was that the customers would see that they were getting more features that other products in the segment for the same price point.  The problem was those “features” weren’t important in this segment.  They were large enterprise features.  The added complexity of installing and managing a product with all of those “features” scared the heck out of smaller businesses and they stayed away.

Just saying your product is great for a segment doesn’t make it so.



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