Too broad segmentation results in damage across the entire customer journey. It’s a ‘fine’ you pay forever…
In the past weeks, you’ve seen several reflections on the topic of positioning. Today is the final one in the series: To tune or not to tune your segmentation – that’s the question.
Why bother? At the end it all starts with recognizing what’s harming performance in your SaaS company:
The apparent signals: dreading sales cycles, win rates that feel too low, and the typical discount battles.
But there are more signals to watch:
- Unnecessary waste of your marketing budget (targeting people that will never buy)
- Poor quality ‘leads’ in your pipeline that are better off with your competitors)
- The costly attempts to satisfy customers that will never become ambassadors
- A bland Product roadmap filled with features to please a single customer
- A higher than the average churn rate
When you sense any of this, you might have a segmentation problem (or better segmentation opportunity).
As you can see, a go-to-market strategy with too broad segmentation impacts the business in many ways: The resources you need (both people and money). Your revenue potential. Profitability potential. Customer lifetime value (LTV), etcetera.
It not only harms the business at the beginning of the customer journey –
𝗶𝘁 𝗱𝗼𝗲𝘀 𝗶𝘁𝘀 𝗱𝗮𝗺𝗮𝗴𝗲 𝗮𝗰𝗿𝗼𝘀𝘀 𝘁𝗵𝗲 𝗲𝗻𝘁𝗶𝗿𝗲 𝗰𝘂𝘀𝘁𝗼𝗺𝗲𝗿 𝗷𝗼𝘂𝗿𝗻𝗲𝘆. 𝗜𝘁’𝘀 𝗮 ‘𝗳𝗶𝗻𝗲’ 𝘆𝗼𝘂 𝗽𝗮𝘆 𝗳𝗼𝗿𝗲𝘃𝗲𝗿.
This is why sharpening your segmentation is such a critical component of your value foundation.
- It defines the clarity of your positioning
- It defines how compelling your value proposition can be
- It defines the level of leverage you can create across the business
It’s a choice. And the good thing is: It’s a choice that you can make right now.
Here’s the link to the long-form blog
𝗠𝘆 𝗾𝘂𝗲𝘀𝘁𝗶𝗼𝗻 𝗳𝗼𝗿 𝘆𝗼𝘂 𝘁𝗼 𝗿𝗲𝗳𝗹𝗲𝗰𝘁 𝘂𝗽𝗼𝗻
Out of all the benefits you can get from sharpening your segmentation, which one do you desire most?