Market Segment


Context: you have multiple "types" of customers for your product



  • talk to your customers: Customer Discovery
  • identify patterns/clusters among them, esp based on their needs/pains/jobs-to-be-done
    • think like a human persona, not a demographic group
    • ideally they also "reference each other" (this is more true in B2B, even with SMB, than with consumers (unless that consumer group is such a tribe that many of them are active in a virtual community))
  • try to assign a large sample of customers to 1 cluster or another (this can be very challenging)
  • track the AARRR and Very-Disappointed metrics for each cluster
  • focus your product strategy and attention on the smallest number of segments (ideally 1!) that love you and are large enough to meet your next-12-mo revenue goals
    • making a landing page (you should probably do this even for segments you don't focus on, in hopes of using traffic paths to put leads/customers into segments)
    • hang out where those customers spend time online, do Sales Safari
    • focus your customer development outreach on those people
    • use those people's vocabulary to iterate your landing page, and even product-vocabulary, etc: positioning
    • make a Lean Canvas to consider whether any other parts of your business model should change to maximize success with this segment
    • make an opportunity solution tree to identify/prioritize problems and solutions - do not do this for non-focus segments.
    • recognize that segmenting is a model/bet (thinking in bets), and needs to be examined periodically
  • the best piece I've read about this process of focusing-in on "best" customers is at (2020-08-04) Rahul Vohra Shares Superhumans Product Market Fit Framework.

Jul'2022: good April Dunford thread: 9 times out of 10, if we are serving multiple segments, even though it might not seem like it on the surface, the value is the same. If it isn't then generally you have a long term product strategy problem, masquerading as a positioning problem.

cluster of purchasers/users with common needs/desires for a given product in a Market

so should be based on needs-definition (Job to be Done by each Persona), not Demographics or even Psychographics (though both of those things can add some context)

see Crossing The Chasm, Warm Niche

cf Customer Discovery, Customer Development

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