Targeting: It’s About Choosing Your Customers

The good news is that, according to Circle Research, 91% of B2B marketers segment their market for targeting purposes. The bad news is that 81% rely on firmographics which for many marketers is just company size, industry vertical and geography. That’s not near good enough.

Rowan Noronha, founder of the Product Marketing Community, has a nice definition of targeting as follows: “Targeting is about which markets, customer segments, buyers, and industries you decide to serve, and which competitors you decide to win against.” Rowan is completely right. It’s about choosing versus just spraying and praying as the old expression goes. Rowan asked me to provide a “micro insight” video clip on targeting. You can find the 8 min video clip here.

What is targeting? Is it the same thing as “firmographics”? 

Firmographics is a just a start but not nearly enough. Here are the 7 parameters we recommend for firmographics. 

  1. Size of company (e.g. annual revenue, number of employees)
  2. Industry vertical (e.g. health care, financial services, technology, etc.)
  3. Geography/region (e.g. Northeast US, Benelux, UK, etc.)
  4. Legal status (e.g. publicly held firm, privately held, non-profit, government agency)
  5. Growth rate (growing, stable, decline)
  6. Persona (e.g. job title that you are targeting such as CIO, CISO, CFO, etc.)
  7. Department (e.g. IT, Customer Care, HR, Sales, Marketing, Engineering, etc.)

Why do product marketers need to go beyond firmographics? 

Now let’s go beyond firmographics so that your targeting is more laser focused and your sales/marketing spend will yield better results. It takes more upfront work but the best targeting requires uncovering more about the target firms. In fact, your Ideal Customer Profile (ICP) should inform additional criteria. Here are three additional targeting criteria that will give you more of an indication of propensity to buy:

  • Strategic Initiatives. With a little internet research, you can see if the target company has specific initiatives such as GDPR compliance, Digital Transformation, Hybrid Cloud, 5G, IOT, AI, etc. Sometimes these are noted in the public filings (e.g. 10K report) as well as in customer forums such as G2, Gartner Peer Insights, and some vendors like TrustRadius and Capterra. Have your demand gen team select a list vendor that will also crawl LinkedIn posts for additional clues about your target contact’s areas of strategic interest. TechTarget, Discover.org and DemandBase offer targeting services based on user behavior which may reveal a purchase intention for a strategic initiative.
  • Adjacent purchase: the target company has deployed an adjacent technology that might be highly correlated with or even be a prerequisite for your solution. For example, maybe your solution is an AI-based business intelligence apps that leverages SAP HANA deployments. Maybe your target firm is a bolt-on to Salesforce.com that specializes in cloud-based financial services companies. Perhaps your specialized HR software for employee engagement works exceptionally well for customers who have deployed Workday for enterprise HRIS. In all three examples, your target firm has deployed a key technology that will help you narrow field of potential targets. 

Why is it imperative to consider your competition as you target where to play and how to win? 

You must thoughtfully choose where you want to do competitive battle. And if your category has several competitors then do your homework to see where you can further narrow your target to hurt the competitors where they are weakest (e.g. geo, industry, size, etc.) for a flanking strategy. Splunk did this against IBM and carved off a huge growth area for midmarket security information and event management (SIEM) customers. If you feel you can win a frontal attack to unseat or disrupt your top competitors then focus on their sweet spot and go head to head by drafting behind their top-of-funnel (TOFU) and middle-of-funnel (MOFU) marketing efforts and focus on differentiation versus category building which is much more expensive. Okta did this for remote access management versus Microsoft and stole a lot of market share. Salesforce is legendary for taking on Oracle initially in the midmarket but then scaling up to the enterprise.

Sometimes the biggest competitor is “do nothing.” In that case, you’ll want to target firms where they may not have deployed a competitors’ solution but show evidence of need. What evidence? See the purchase intention criteria which described above pertaining to strategic initiatives and deployment of adjacent solutions. 

We hope you find these 10 targeting criteria (7 firmographics ones plus presence of strategic initiatives, adjacent purchase, and competition) very helpful in your targeting exercises. If you adopt all ten then you are well on your way to being in the top 10% of B2B marketers who are focusing their sales/marketing efforts for the highest ROI.

 

 

Sridhar Ramanathan has more than twenty years of experience in technology companies, from startups to blue chip firms. As the Marketing executive for Hewlett-Packard’s Managed Services business, he was responsible for marketing worldwide and managing the portfolio of HP services’ $1.1B unit. He also held profit & loss responsibility for electronic messaging outsourcing and e-service business units. Thanks to Sridhar’s efforts, HP became the #1 ERP Outsourcer and experienced growth in the data warehouse market, now well over a $1B revenue stream. Sridhar has played interim executive roles for a number of technology firms, leading their sales and marketing functions in the high growth phase. Sridhar holds an MBA from the Wharton School of Business and a BS in Engineering Physics from U.C. Berkeley. He is active in non-profit work as Vice Chairman Emeritus of the Board of Child Advocates of Silicon Valley, an organization that provides stability and hope to abused and neglected children.