Defining The Focal Market 84x6s

MARKETS, NEED-FINDING AND PLANNING DEFINING THE FOCAL MARKET: MARKET SEGMENTATION Three questions:  Why segment? o Helps you prioritize o Helps you manage your resources o Helps you identify the focal market o Helps you become better than your competitors  Starting with change management. Unclear if market will pay  Starting with LBSAA. Segment into different customers with pain points. Unclear what the value proposition is that will meet their needs  Ultimate goal: o Describe the segment in of a typical customer/buyer.  3Ws:  Who buys?  What product do they buy today?  Why would they switch today and tomorrow?  To look at:  Demographics – gender, age  Behaviors – routine, usage patterns  Needs – pain points o Describe the size, potential value and growth of the segment: To compare segments, look at size (total population), growth (perceived adoption rate) and profitability (based on customer’s income) o Deliver services to the segment. How actionable – can I serve them? UNDERSTANDING NEEDS 4 steps of needs identification  Gather raw data on customer needs: o Focus groups with 8 – 10 customers: Highly productive but expensive o Interviews: Cheap, effective and fast  Interview all stakeholders – s, buyers, advisors  5 – 20 subjects. Sweet spot is 10 o Surveys: Good for specific companies like pricing and product features but less useful in opportunity identification  Interpret the data  Organize the needs by type  Establish relative importance of their needs

CAVEAT: Facebook and Google didn’t do it. But it increases the odds of success. Will the value the product? Is change management a pain point? TO DO: 1. Start with LBSAA. Segment into different customers with pain points. 2. Clarify what the value proposition is that will meet their needs Ultimate goal: a) Describe the segment in of a typical customer/buyer. 3Ws: a. Who buys? Demographics – gender, age b. What product do they buy today? Behaviors – routine, usage patterns c. Why would they switch today and tomorrow? Needs – pain points. Accessibility. i. Gather raw data on customer needs: 1. Interviews: Cheap, effective and fast a. Interview all stakeholders – s, buyers, advisors b. 5 – 20 subjects. Sweet spot is 10 2. Forget the product concept and focus on need 3. Ask about current behavior rather than speculating about the future 4. Ask for specific examples rather than generalizations 5. Identify the steps in the customer journey or experience ii. Interpret the data iii. Organize the needs by type iv. Establish relative importance of their needs b) Describe the size, potential value and growth of the segment: To compare segments, look at: a. Size (total population) b. Growth (perceived adoption rate) c. Profitability (based on customer’s income) c) Deliver services to the segment. How actionable – can I serve them?