priate for that business type. People will respond to relevance, and the type of business they work in is highly relevant to them—less so for size of company and location.
codes were used, this coding system rolls up to a broader definition of industry through the use of five- or four-digit definitions. In many cases, the results of the profiling are also very useful for segmentation within a target market.
• Markets of known opportunity.Most companies focus on target markets in which there is a proven sales opportunity. As a result, cus- tomer acquisition efforts are focused in known market opportunities, even though, in my experience, the definition is usually too broad. As an example, I frequently hear that the target is “small businesses” or “mid- market,” and if that’s the case, the target needs further narrowing. Fre- quently the definition of a good target is not one that can be easily quantified, and a list of such companies is not easily found. Recently a sales force automation client was targeting mid-market companies that have at least ten salespeople. Mid-market wasn’t so hard to pin down by employee size, but finding a list by number of salespeople is impossible.
So, one of the first lessons in targeting inputs (other than from the pro- filing step) is to define targets in a manner that can be tied to outside databases and lists of companies. Otherwise, the definition may sound good but not be actionable.
• New product introductions. Most companies have new products or services that they are planning to introduce, and for many of these introductions, new target markets are in the picture. One of the main jobs of product or market management is to define the marketplace and opportunity even before effort is expended on product development.
Logically, there should therefore be prior work on target markets for these new initiatives. That’s in the ideal world. Unfortunately, far too often the product development is driven out of technology (“we can”), with the hope that a large enough market exists for this product or service. I read a study fifteen or so years ago showing that as much as 50 percent of the sales of a new product were in areas that were not envisioned in prod- uct development. My first job at B.F. Goodrich Chemical found me work- ing as a product manager for a product that was developed as a denture adhesive (not successful) and then was sold in large quantities as a thick- ener for cosmetics (very successful). The moral of the story for market- ing is that often the targets for new products turn out to be misguided.
By the way, another use of profiling is to identify who is inquiring about
a new product or service. It can be very useful to actually test or check the assumptions of the new product development group.
• Competitive openings. We all should be focused on our direct competition, and this landscape does change. What is needed is a com- petitive intelligence-gathering process, which is not the subject of this book but is an effort that will routinely uncover openings based on the activities (or lack thereof) of the competition. For example, the shake- out that occurred after the “dot-com bomb” opened up markets for other companies, as many software providers went bankrupt and their cus- tomers were stuck with software that was now a true legacy system. In my experience, not many target markets are defined as a result of open- ings created by competitive movements, and I suspect that fact is due more to lack of intelligence than to companies’ reluctance to wade into a mar- ket based on a competitive opportunity. This highlights the importance of including a field on the database regarding the competition found at each prospect and customer. Then you can move quickly when a com- petitor has gone out of business, is experiencing a quality problem, or cannot supply. The competitive environment and not industry type, in this case, now defines the description of the target market.
There they are—four methods to develop target markets. This process is essential, as it directs much of the following activity. It usually is done at planning time—and it sets the stage for the next chapter, which covers segmentation.
Summary
Of all the marketing processes in B2B, profiling and targeting is one that is frequently overlooked or not done thoroughly enough. Of all the sources of marketing mistakes, the lack of selecting the target markets wisely enough is frequently the root cause. We have an opportunity each year at planning time to either improve this process or continue repeating tar- geting mistakes.
For companies that have been in business for a number of years and have a number of customers and prospects, the data exist to profile and target in a more scientific manner than to assume that the target mar- kets are the best ones for marketing concentration. True, the majority of
the target segments will be the same, but it is the ones that do not log- ically occur to the planning group that will be missed or underappreci- ated. This is particularly true if the current description of the target markets is too broad and/or lies in the hands of the sales group, which thinks geographically.
Ron O’Brian gave me the best advice years ago—put your head in the right position and your body will soon follow. A good targeting process will put the marketing “head” in the right position, and the rest of the job will follow so much more easily.
71
The essence of this book is that the marketing and sales functions are coming closer together and being integrated to cover the sales territory and achieve the seemingly dichotomous twin goals of “sell more” and “spend less.” So, just exactly how do you do this? The fact is that, while expen- sive and increasingly inefficient, the sales call is still the ultimate method to communicate with high impact. In more popular terms, it’s the true one-to-one marketing! If marketing communications is to achieve a mea- sure of success in assuming some of the sales coverage role, there is a need to know much more about the customer and prospect. Knowing more about the company and individual within the company leads to messages with a high degree of relevance and, therefore, impact. No longer will undifferentiated advertising and marketing messages get through the clut- ter and the time crunch faced by everyone. Simply, the higher the rele- vance, the more the communication will break through this clutter and register with the targeted decision maker or influencer.