How Do You Segment A Market?

One of the things you learn early in marketing is that you can’t be all things to all people.  One of the failures of entrepreneurs is they create something and then think it can work everywhere for everybody.

One time I was talking to the CEO of a company I was invested in.  I asked, “Who is your target market?”.  He said, “We are throwing things at the wall to see what sticks.”  Lunch was not digested well that day.

Usually when we think about market segmentation, we think in terms of verticals.  The financial sector, the health sector, the ag sector.  It often works.  It allows us to allocate resources and target.  It can help organize sales calls and media because often the customer base in one sector is moved by the same message.

But, what if you had a product that could in fact be used lots and lots of different people? What if we didn’t segment by sector and segmented by job function inside a company?  Targeting that one individual inside a company that is like other individuals inside other companies, irrespective of business silo.  Is this an efficient sales process?

I am not sure, but it’s an idea I had.  Today using big data and web preferences, we can microtarget different people with the same beliefs, even though they might not have a lot of other things in common.  This has certainly worked with Facebook ads, and other kinds of advertising.  Does it work in startup SaaS businesses?

I suppose SalesForce is a good example.  It doesn’t matter what you are selling, as long as you are selling.  Except, their initial target market was the SMB market.  While I can’t find anything on the web, my gut tells me they microsegmented the SMB market to gain traction.