Marketing Services to Targeted Industry Segments

(Originally published as a Marketing and Business Development column in the
April 2001 issue of AFSMI's The Professional Journal.)

By William K. Pollock

Many services organizations believe that simply because their services offerings may be used by customers of all types, sizes and industry segments, that they must target their marketing and business development efforts to the market as a whole - that it does not make sense to restrict their sales and marketing efforts to a smaller than universal marketplace. However, even the largest OEMs, ISOs and systems integrators - who arguably can provide all services to all segments - generally prefer to approach each targeted segment on an individual basis, using segment-specific sales and marketing, advertising and promotion, and marketing collateral.

In fact, many of the largest - and most successful - services providers have built their respective service delivery organizations on at least a partially decentralized basis, in order to ensure that they can provide focused services to each of their most attractive industry segments. As such, those services providers that are large enough to support multiple industry segments generally also have multiple internal organizations, infrastructures and service delivery processes designed to support each targeted segment.

For example, many large OEMs may have separate financial services, healthcare, enterprise and government services divisions. However, even those organizations that seemingly cater to only a single industry segment have found that individual sub-segment targeting also makes sense. These may include medical/healthcare ISOs that divide their services portfolios into support for hospitals, clinics and private practices; or networking providers that separate their organizations into support for Service Providers (i.e., telcos) and Enterprises (i.e., all other businesses).

For any services business, there are usually always prospects in certain segments that ultimately become better customers than those in other segments. As such, your business may be best served by directing its marketing and business development efforts toward a select, and prioritized, number of individual segments rather than to a more broadly defined and all-encompassing universal market base. This is what is commonly known as "market segmentation."

The primary reasons for segmenting the general marketplace are essentially based on marketing and economics. If your company can only produce a certain number of products, or deliver a certain number of services, within a finite timeframe, it would make great sense to concentrate its efforts in segments that are:

  1. Most likely to buy its products and services
  2. Most likely to buy multiple products, and longer-term services
  3. Most likely to be repeat customers
Further, by concentrating your business' sales and marketing efforts on a limited number of attractive - and receptive - segments, you can:
  1. Streamline your marketing approach, thereby benefiting from sales and marketing economies of scale
  2. Focus your efforts on segment-specific product/service attributes, thereby delivering a targeted approach that will better reflect your understanding of the customers' specific needs
  3. Position your business as a major "player" within a smaller number of targeted segments, rather than as an "also-ran" in a general market universe
Once the concept of market segmentation is adopted by your business, the ability to choose the right segments, define and classify them accurately, and prioritize them with respect to planned sales, marketing and promotional activities becomes of critical importance. This can most easily be accomplished by utilizing a three-phased approach to marketing and business development, as follows:
  • Phase I - Market Research and Discovery
  • Phase II - Validation and Concept Testing
  • Phase III - Qualification and Development
Market Research and Discovery
The Phase I activities should focus primarily on the market research and "discovery" aspects of the overall segmentation effort, representing the foundation upon which the remainder of the process will be based. The key components of this phase will be to identify the most attractive market segments for future business development; to define each of the selected segments in terms of their respective structure, size and anticipated growth trends; and to identify the most relevant market usage/purchase characteristics that define each of the segments vis a vis your product and service lines.

Validation and Concept Testing
The second phase should focus primarily on the concept testing that will confirm and validate the specific needs, requirements, preferences and expectations that prospective users in each targeted segment would have with respect to the company's product/service offerings. This would also typically include the identification of any presently unmet needs (i.e., a "gap" analysis), and the respective likelihood of users in the segment to acquire/purchase your company's products and services in the future.

Qualification and Development
The Phase III effort should focus on the qualification of potential users within each segment through the establishment of potential purchase/usage parameters; prioritization of prospects, by type; and the identification of the most attractive prospects for future business development. The completion of all of the activities leading up to, and including, this phase would then result in the ability of the company to link these qualified lists directly to planned marketing and promotional activities.

These may include the:

  1. Development of segment-specific marketing collateral
  2. Establishment of a targeted advertising and promotional program
  3. Implementation and tracking of a pre-qualified business development call program
  4. Development of a formal plan for introducing the company and its products/services to new prospects at the most appropriate segment-specific trade shows, through advertising in the most complementary trade journals and magazines, and via the company's own website and printed matter marketing collateral
The execution of this phased market segmentation approach represents a critical step toward acquiring a better understanding of each individual market segment's unique needs, requirements, preferences and expectations relating to potential purchases/sales of the company's product/service line. It is also a necessary process for any organization that desires to expand its existing customer base strategically, and penetrate successfully into new customer and market segments.

Any business could benefit substantially from broadening its historical customer base by penetrating new, fast-growing and receptive segments. However, just because your company's products and services could potentially be used by all types and sizes of customers, does not necessarily mean that you should attempt to "be all things to all parties."

Even the very largest businesses that, conceivably, could "offer all things to all parties," have recognized that there are far greater benefits that can result from their ability to first understand and support a smaller, targeted and more manageable number of "pre-qualified" industry segments.

William K. Pollock is president of Strategies For GrowthSM (SFGSM), the Westtown, Pennsylvania-based services consulting firm specializing in strategic business planning, services marketing, CRM consulting, market/survey research, and customer satisfaction measurement and tracking programs. Bill may be reached at 610-399-9717 or via e-mail at

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