The Science of Marketing

Aaron Ross of Build a Sales Machine blog fame, wrote an insightful post, "The Fatal Mistake Boards & VP Sales Will Make in 2008 Planning", a couple of days ago. In this post he contends that hiring more sales people will not help you hit your revenue bogey, mainly because sales guys are not good prospectors and don’t necessarily help grow the pipeline. I agree – good sales people are farmers, not hunters. It is up to marketing to find the fertile lands for sales to farm. This hunting should be accomplished with data and a scientific approach to market segmentation.

Along with the return to financial restraint in the high tech market comes a rekindled focus on solid business fundamentals, namely building and selling great products. In this levelheaded environment, companies must place an added importance on reducing their sales and marketing costs to strengthen the bottom line, and collapsing their sales cycle to speed time to revenue. In order to accomplish both, companies must be extremely diligent in their market segmentation efforts, identifying the spaces where they’re likely to find the best prospects, and focusing their sales and marketing dollars on real opportunities.

In order to effectively segment a market, first determine the measurable attributes that help match a prospect’s needs with a company’s solution — increasing the odds of winning. Such attributes include a prospect’s size, vertical market space, and current infrastructure. For example, a developer of high end storage backup software may be most interested in targeting Global 2000 enterprises in the financial and manufacturing industries that have already deployed a storage area network (SAN).

Once these attributes are identified, characterized and prioritized, the next step is to determine the areas of overlap between each attribute to establish "hot spots," niches that embody the desired prospect profile. A Venn diagram, as depicted below, is often useful as a visual representation for these hot spots. By assigning a ranking to each area of overlap, where the highest ranking represents the intersection of every key attribute, it is easy to see where sales and marketing resources are best allocated.

By maintaining an ongoing market segmentation effort, companies can target the prospects that are most apt to purchase their products and services, and align sales and marketing strategies to best appeal to market hot spots. Using these hot spots as a guide, lead generation becomes more focused, prospect qualification is faster, fruitless sales meetings are avoided, and budgets go further. Additionally, by measuring each new customer based on the attributes set forth in the market segmentation effort, companies can audit their hot spots and adjust their strategies accordingly.

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