The Key to Developing a Market Segmentation StrategySeptember 15, 2014 | By Wayne O'Neill
Market segments are defined by the client themselves. They could be based on geography, but often it revolves around what they’re in business to do. People in education likely hang together, those who are in Healthcare tend to socialize with each other, and likewise for other industries. The illusion is that all of those segments can be thin sliced by geography or operation model type.
Where people go wrong
Before our coaching, clients rarely understand that their target clients are constantly redefining themselves. While it may be easy to assume that their targets are the same as they were two years ago, in actuality they are changing consistently around their understanding of vertical markets.
In addition to that, humans, by nature, try to categorize everything. Usually, when service providers are looking to diversify their market, they’ll start listing off industries in which they can apply the skills that they’ve already used. They might think they can pursue ten different avenues, but in reality, everything must be prioritized. Or, the mistake others make is that they select a vertical, say, Higher Education, and they think that’s enough. But they haven’t made the really important decisions yet. The question is, where? How? What type of higher education? Everything can’t be delved into deeply all at once.
Once you figure that out….
If you dig deeper and find these answers, this leads to seeking out for bigger answers, such as finding out about the business and political issues. If people figure out the business and political issues, that’s 80% of the game. But to fully win, you must understand who the stakeholders are. If you connect stakeholders to thought leaders and you know who they are, then you have everything you need.
In every industry, you’ll need to know, listen to, and understand the pundits. Who shapes the thought in a segment? Who are the leaders? How do you make profit? These are questions you need to be asking.
Let’s talk Higher Ed
Higher Education is an interesting vertical right now, because it’s completely transforming from the way universities once were. People are bringing up things like the disengagement of students, and they’re finding solutions to that issue. College campuses no longer revolve around dorms, fraternities, or sororities—they now revolve around place creation with a lot of mixed use developments and retail stores. Now, going on campus is like going shopping.
It’s a common error to think that you understand higher education while not seeing the thin slicing going on within. The difference between for-profit and not-for-profit higher education is significant, as is how larger institutions are different from smaller institutions and how even community colleges within the same district can vary considerably. Los Angeles community college district, for example, can have 170,000 students at one community college, while another down the street has 10,000. But the unifying theme is that they’re all struggling in the way that they connect.
Here’s the Bottom Line….
Focus on the thought leaders and the stakeholders. They are your key to a successful pursuit.
Pay attention to the way in which the businesses you’re targeting are changing. They’re constantly changing.
Image Credit: Michael Carlan