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John Brian SutterMIDIOR ConsultingJuly 15, 2010Actionable Market Segmentation
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Actionable Market SegmentationJohn Brian SutterMIDIOR ConsultingJuly 15, 2010
blog.midior.com
www.midior.com
Follow us on Twitter: @midiorite 2
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Actionable Market SegmentationJohn Brian SutterMIDIOR ConsultingJuly 15, 2010
MIDIOR Overview
Our premise is simple - inspire excellence in developing products and leveraging technology.
MIDIOR is a one of a kind firm, uniquely qualified to help our clients reach new levels of innovation and efficiency. We are technologists with a passion for delivering business results. We are innovators with our eyes on process for sustainable and repeatable results. We are hard to define - and yet we fit right in the middle of the solution to our client's dilemmas - right there at the intersection of technology and business. Every industry, from manufacturing to financial services to education, is entirely dependent on building competencies in the acquisition, development and deployment of technology. It's as fundamental as knowing how to work the phones - yet it is a complex subject, where success is dependent on the right combination of skills and expertise.
At MIDIOR, we help our clients improve profitability and growth by increasing their "return on technology." In particular, we focus on improving the relevance and leverage of our clients' product and technology portfolios against business objectives. Whether we are working with a software vendor hoping to accelerate their product development cycle, a financial services firm looking to achieve an order of magnitude cost reduction, a manufacturer of industrial supplies trying to define a product roadmap, or a retailer hoping to double throughput at point of sale, our role is clear: leave behind a client who is more adept at taking advantage of technology.
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Actionable Market Segmentation – how to assess market opportunity for new products and services and turn that analysis into actionable steps that will increase market share and win sales.
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Theme: The collection of key measures will help you make better product decisions. (or at least build a case for product investments and marketing programs)
Goal: increase market share and win sales.
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What is Actionable about Market Segmentation?
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‣ Key Buying Factors
‣ Need States
‣ Usage/Purchase Occasions
‣ Occasions
‣ Lifestyles
‣ Psychographics
‣ Demographics
‣ Geo-graphics
‣ Behaviors
Segments = Data (about customers)
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‣ One to One Marketing
‣ Market of One
‣ Usage/Purchase History
‣ Loyalty Programs
‣ Review and Attitudes
Market Segmentation
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9Segmentation can be very different depending on your product, your customer, and the marketplace.
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10Managing the Product Successfully means Measuring Product Success Factors
WHERE IS THE OPPORTUNITY FOR CUSTOMER SUCCESS?
TRANSLATION: WHERE IS THE REVENUE?
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Actionable Market Segmentation
ASSESSMENT SALES / MARKETING ENABLEMENT THE SCOREBOARD
MARKET OPPORTUNITY ANALYSIS
1 - A Data Framework to measure opportunity by Segment and an actionable dimension
2 - Prioritize investments in Product and Marketing
3 - The right framework facilitates product decisions on a ongoing basis
KEEP SCORE AND COMMUNICATE PROGRESS
★Review Action Plans and Programs★Communicate Progress★Schedule Updates to the Market Analysis★Product Management Dashboards
EXECUTE ACTION PLANS
Programs and tactics drive sales activities supported by specific targets of opportunity: The right Customer, The right Product Mix, The right messages
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Do product managers value market opportunity analysis?
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MIDIOR Product Management Survey for 2010
Market research and competitive analysis - Part of the job description?
Amount of time spent on Market research and competitive analysis
(where this is part of the job description)
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Market Opportunity Study
FROM THE MIDIOR PLAYBOOK
Uncover the current state of your product(s). Identify and qualify Competitive Threats Establish a framework for monitoring success in the marketplace Create Business Scorecards for sharing information within your organization Recommends the best mix of investment and resources to generate revenue and opportunity in the right markets.
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Market Opportunity Study getting to The Money Slide15
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Where in the world will customers buy your product and services?
What if you could answer that question with fact based information?
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17It’s all about leveraging data
Collect Key Metrics at the Entity Level (Customer) Interview Key Constituents & Stake Holders
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18It’s all about leveraging data
Define the Industry Segments & ICPBand data attributes for entities into groups
Uncover the current state of your product(s). Identify and qualify Competitive Threats
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19It’s all about leveraging data
Hoovers | OneSourceSFA / CRM | Industry Websites | Google
Product Strengths / WeaknessesMarketplace FactorsCustomer GoalsNew Requirements / New OpportunitiesCompetitor Awareness + Strengths / Weaknesses© 2010 MIDIOR Consulting All
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Market Opportunity Workstreams
DEFINE SEGMENTATION FRAMEWORK
WHAT IS THE IDEALCUSTOMER PROFILE DEFINE THE SEGMENTS Framework for Roll up
VOICE OF THE CUSTOMER RELATIONSHIP MGRInterviews (40)
CLIENT INTERVIEWSInterviews (40)
Qualitative Data
CLIENT AND PROSPECT ATTRIBUTES
CRM Extract BUSINESS ENTITY Extract(Hoovers, OneSource)
Quantitative Data
VOICE OF THE MARKET SECONDARY RESEARCH(Analysts)
PRIMARY RESEARCH(Interview Competitors)(Product Evaluations)
Market Data
Other Data for 360 Analysis: Product Costs, Operations Measures, Enhancements, Sales Operations, etc.
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Market Opportunity Framework
• Step 1 Define the Segments (Industry)
BANKS (Large)BANKS (Central Banks)
COLLECTIVE FUNDS
INSURANCE COMPANIES
NON-PROFIT / ENDOWMENTS
PENSION FUNDS (Corp)PENSION FUNDS (Public)
SOVEREIGN WEALTH FUNDS
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Market Opportunity Framework
• Step 2 Define the Geographies of interest for the Industry Segments
NORTH AMERICAUNITED STATESCANADA
EMEAUNITED KINGDOMSCANDINAVIA AFRICAWESTERN EUROPEIRELANDEASTERN EUROPEMIDDLE EAST
ASIA-PAC CHINASINGAPOREHONG KONGEMERGING ASIA1
AUSTRALIANEW ZEALANDJAPAN
1 NOTE: EMERGING ASIA = Malaysia, Vietnam, Thailand, Korea, Kazakhstan
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Market Opportunity Framework
• Step 3 Define the measures that quantify revenue opportunity
ASSETS UNDER MANAGEMENT IN USD ($B)BASED ON ASSETS UNDER MANAGEMENT > APPLY BASIS POINTS FORMULA TO CALCULATE REVENUE POTENTIAL
OTHER MEASURES / FORMULASCOMPANY SALES REVENUEMARKET VALUEPROFITSGROWTHNUMBER OF EMPLOYEESNUMBER OF LOCATIONS
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Market Opportunity Framework
• Step 4 Determine your current product’s relative strengths and weaknesses in the geographies of interest
WHAT DO CUSTOMERS SAY?INTERVIEW CUSTOMERS
WHAT DO RELATIONSHIP MANAGERS SAY?WHAT’S HAPPENING ON THE FRONT LINE?SALES WIN / LOSS REPORTS
WHAT DO YOUR OPERATIONS / SUPPORT PEOPLE SAY?SUPPORT REQUESTS
WHAT DO THE ANALYSTS SAY?INDUSTRY REPORTS
CONSULTANT’S ASSESSMENTPRODUCT WEBPAGES / COMPETITOR WEBPAGESINDUSTRY ARTICLESPRESS RELEASES
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Market Opportunity Framework
• Step 5 Organize and Group Geographies by Markets. Score each Geography by Product Readiness Scores
AT A HIGH LEVEL, PATTERNS CAN EMERGE THAT ARE ACTIONABLEPRODUCT READINESS SCORES WITHIN MARKETS OF OPPORTUNITY
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Now that we know the Size of Each Market, let’s calculate what clients will pay for the product and determine the real market opportunity. © 2010 MIDIOR Consulting All
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Group Category Competitor A Competitor B Competitor CBusiness Overview Client Service & Relationship Model
Differences between full service and custody only clients
Liability TransfersOperating ModelProducts/Services
Competitive Landscape Competitive standing in each segmentCompetitive advantage in each segmentCompetitive deficiency in each segment
Innovation New Market Opportunities (upcoming legislation, geographical differences, segment differences…)
Industry/Client TrendsNew Product OpportunitiesProduct Differentiators for full service vs. custody only
Product Perception Internal ComplaintsClient ComplaintsProduct Strengths Product Gaps/WeaknessesSalesRelationship management and client serviceOperations
Strategy Pricing Strategy (bundled, lowest price, charge back…)
Client Segmentation
Competition Tab
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“We would like to see packaged products so that ‘Security Services’ is one stop shopping.”
FRANKCURRENT CLIENT
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Market Opportunity Analysis
Data and Information about each segment
All new opportunities for your product
Your existing clients
Your competitor’s existing clientsSpecific Insight on which product + marketing needs
fit the right segment for driving specific revenue
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Actionable Market Segmentation
ASSESSMENT SALES / MARKETING ENABLEMENT THE SCOREBOARD
MARKET OPPORTUNITY ANALYSIS
1 - A Data Framework to measure opportunity by Segment and an actionable dimension
2 - Prioritize investments in Product and Marketing
3 - The right framework facilitates product decisions on a ongoing basis
KEEP SCORE AND COMMUNICATE PROGRESS
★Review Action Plans and Programs★Communicate Progress★Schedule Updates to the Market Analysis★Product Management Dashboards
EXECUTE ACTION PLANS
Programs and tactics drive sales activities supported by specific targets of opportunity: The right Customer, The right Product Mix, The right messages
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Sales Enablement > Ideal Customer Profile
• SELL THIS
Revenue > 200 M
Employees > 1000 Industry: Financial Services High Tech Healthcare
NOT THIS
> opportunities for channel partners
US Government Agencies
Intl Government Agencies Education
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Sales Enablement
• Key Selling messages via BrainShark
• The elevator pitch
• Success Stories via Enterprise Social Media
• Export lists of ICP profiles
• Standard Product Manage Best Practices
• Work with Marketing on Action Plans
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Actionable Market Segmentation
ASSESSMENT SALES / MARKETING ENABLEMENT THE SCOREBOARD
MARKET OPPORTUNITY ANALYSIS
1 - A Data Framework to measure opportunity by Segment and an actionable dimension
2 - Prioritize investments in Product and Marketing
3 - The right framework facilitates product decisions on a ongoing basis
KEEP SCORE AND COMMUNICATE PROGRESS
★Review Action Plans and Programs★Communicate Progress★Schedule Updates to the Market Analysis★Product Management Dashboards
EXECUTE ACTION PLANS
Programs and tactics drive sales activities supported by specific targets of opportunity: The right Customer, The right Product Mix, The right messages
© 2010 MIDIOR Consulting All Rights Reserved© 2010 MIDIOR Consulting All Rights Reserved
34Keep Score using a Dashboard that leverages the data you collect
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The Product Manager’s Dashboard
• Create Product Manager’s Dashboard with the data from Market Opportunity Data using a graphics tool (Swiff Charts or Adobe Flash)
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The Product Manager’s Dashboard
• Create Product Manager’s Dashboard with the data from Market Opportunity Data using a graphics tool (Swiff Charts or Adobe Flash)
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The Product Manager’s Dashboard
• Create Product Manager’s Dashboard with the data from Market Opportunity Data using a graphics tool (Swiff Charts or Adobe Flash)
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Lessons learned
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“Who is our top competitor? DB2 for AS/400”
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Who remembers OS/2?
“I wouldn't want to be in your shoes. I wouldn't want to have to compete with the IBM company.”
Jim Cannavino, head of IBM's personal-computer business
1989To : Bill Gates, Chairman of Microsoft Corp.
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• Did you know: OS/2 was adopted widely in the financial services sector early on because of its reputation for dependability. And banks are traditionally squeamish about moving off of any system because of concerns about losing customer data.
•"It's very reliable, and you want it to be reliable and stable. OS/2 is doing what we want," said Ron Ferri, a technology relationship consultant at FleetBoston Financial Corp. "You could run with that for a while, until vendors moved off it.“
• ComputerWorld Aug 11, 2003
Who remembers OS/2?
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Actionable Market Segmentation
ASSESSMENT SALES / MARKETING ENABLEMENT THE SCOREBOARD
MARKET OPPORTUNITY ANALYSIS
Study the Market by creating a Framework for the data and build a practice of collecting feedback.
KEEP SCORE AND COMMUNICATE PROGRESS
★Keeping Score using tools that leverage market opportunity data can have a very positive effect on the entire team. It creates enthusiasm and encourages focus for meeting sales goals.
EXECUTE ACTION PLANS
In addition to standard Product Marketing practices, help direct the Sales Team with qualified lists and tools.
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