There is a distinct difference between establishing marketing strategy and business development plans and creating a sales pro forma. The former includes the development of a focused, marketing plan that will provide the focal point for all your proactive business development activities. And one of the most powerful and effective strategies is market segmentation. Part savvy artistry, part pragmatic business opportunism, market segmentation enables a business to accelerate its growth through the disciplined, focused pursuit of one or more target industry verticals.
Some of you are saying: What is he talking about? How does limiting the size of your potential market result in more clients and sales revenue? Isn’t that counter-intuitive? It may initially appear that way on the surface. But by focusing on a specific industry vertical you gain a multitude of marketing advantages.
By specializing in an industry you can gain all of the following benefits:
- Institutional knowledge of that specific industry, its issues and challenges, and trends
- An appreciation and understanding of the culture of organizations in that sector
- You will be able to “talk the talk” and “walk the walk” because of your industry knowledge
- You will be credible as a “trusted adviser;” an “insider” who “gets it”
- Word-of-mouth publicity is enhanced as your reputation grows and expands
- Your marketing message can be specifically tailored to your target audience and it will resonate
- Depending on the industry sector, there may be opportunities to create proprietary products
- Benefits communication and enrollment strategies can be customized for that specific employee audience
- Specific capabilities can be developed that address the needs of the target audience, which provides you with a sustainable competitive advantage
- Increased referrals, since most finance and HR professionals leave an employer but stay in that same industry sector
- Proactive business development activities are channeled to a target audience, not the general market
- Most industries have “trade” associations which can provide you with speaking opportunities for “seminar selling” where you will be introduced as a subject matter expert
- Those associations likely communicate with their members through newsletters and webinars, which can provide you with opportunities to publish pertinent articles and white papers
- All of the above contribute to prospecting getting easier
- The sales cycle is shortened
- Sales revenues grow exponentially
Clients of ours have segmented the market to serve employers in the following sectors: healthcare; public schools; municipalities; state government agencies; private schools; non-profits; gaming; utilities; and hospitality, among others. One firm does business with 6,000+ school districts for one or more product or service offerings. Another does business with 23 state government agencies and 12 state universities in their home state and has more than 125,000 policyholders. Another has seen its revenues grow at a 40% compounded annual growth rate for the last six or seven years. How do those metrics compare to your practice?
Which industry or industries to focus on will depend largely upon your location, contacts, capabilities, experience and product offerings. A logical place to start would be to consider any “natural” markets that you might have. Market segmentation represents a huge marketing opportunity. And once you implement your marketing plan, your prospecting and business development activities will quickly become easier and more effective.
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