Master Your Go-to-Market strategy: (part 1) – Identifying Your Ideal Customer

GTM strategy is the backbone of all marketing efforts. A good GTM strategy needs to be consistent, actionable, and adaptable to your market's changing dynamics. But how do you create an effective and actionable GTM plan?

As an experienced marketer who has worked on multiple GTM strategies, I’m thrilled to share my learnings and insights from throughout my career.

I break down the GTM process into four steps. Each step builds on the last, ensuring you develop a comprehensive understanding of how to successfully bring your product to market.

Our journey begins with the foundation of any successful GTM strategy: identifying your Ideal Customer Profile (ICP) and segmenting your market.

Why You Should Identify Your ICP Before Any Marketing Effort？

Identifying your ICP is crucial because it ensures that your marketing efforts are precisely targeted, maximizing efficiency and effectiveness. An ICP helps you focus on the customers who are most likely to benefit from your product, leading to higher conversion rates, better customer retention, and more efficient use of resources. It allows you to tailor your messaging, content, and campaigns to resonate deeply with the right audience, thus improving engagement and ROI.

HubSpot is a notable example of a company that effectively identified and targeted its ICP, leading to significant success. Initially, HubSpot focused on small and medium-sized businesses (SMBs) that needed robust yet easy-to-use marketing tools. By clearly defining their ICP, they tailored their products and marketing strategies to meet the specific needs of these businesses. This focus helped them grow rapidly, dominating the inbound marketing space and achieving substantial market share.

On the flip side, Gucci, a globally recognized luxury brand, faced significant challenges during the 1980s and 1990s that nearly led to its downfall due to a lack of clear understanding of its Ideal Customer Profile (ICP). During this period, Gucci attempted to rapidly expand and cater to broader, more diverse markets. This over-expansion included opening stores in locations that did not align with the luxury brand perception, and lowering prices to reduce inventory, which confused customers and diluted its luxury image. By the mid-1990s, Gucci was on the verge of bankruptcy, with significant drops in sales and brand value.

With the acquisition by PPR (Kering) and the revolution led by Tom Ford, Gucci was able to recover and eventually thrive again in the competitive luxury market. But not every brand has a second chance like Gucci. We should keep our ICP in mind from day one, and continually align our strategies and products with the preferences and expectations of our ideal customers.

How to Identify Your ICP?

A deep understanding of your ideal customers and their needs is based on comprehensive research on market demands, customer preferences, and competitive dynamics. There are various ways to conduct your market research, such as surveys, questionnaires, industry reports, and review sites, all of which can help you gather the information you need.

Get first-hand feedback

But the most important thing you need to do is talking with your real customers.

If you already have paying customers, perfect! Speak with them, understand what they like about your product and why they’re willing to pay for it. These conversations also provide insights into what keeps customers coming back, informing your retention strategies.

If you are launching a brand new product, talk with your active beta users. Ask for their feedback, not only about the usability and functionality but also about whether your solution solves their pain points and how likely they are to pay for it.

Equally important is talking with prospects who didn’t convert. Understanding why these prospects chose not to move forward can identify gaps in your offering or reveal competitive advantages your rivals may have. Maybe your solution didn’t fit their company size or industry, or perhaps a competitor offered a better deal. Directly asking these questions helps avoid assumptions and provides accurate insights into their decision-making process.

The Million-Dollar Questions

Through your research, you should be able to answer these golden questions that will illuminate your ideal customer profile:

• Who are they? (Industry, location, company size)
• What are their burning problems? (Pain points and needs)
• How are they solving them now? (Current solutions)
• How urgently do they need a fix? (Urgency for a solution)
• How can your product be their hero? (Your solution and value proposition)
• Who are the competitors, and what's their game plan?

Here is an example of Smartify Marketing's ICP, you can use the form as a template, and if you can easily fill out this form, congratulations! You have defined your ICP.

Does ICP= marketing audience?

Now that you've identified your ICP, does that mean you found your marketing audience?

Well, not quite.

ICP refers to the company or organization that would benefit most from your product or service, but when we run marketing campaigns, we target individual people. To implement our account-based marketing approach, we need to first identify within those organizations who are the decision-makers or influencers in the purchasing process, commonly referred to as the buying committee or buyer personas.

For B2B SaaS products, the selling process can take 3-18 months and usually involves more than one stakeholder throughout the journey.

There are various structures that can help you identify and categorize the different roles in the buying journey. One widely recognized model is Miller Heiman's Strategic Selling Model, which you can customize based on your own business features.

Miller Heiman's Strategic Selling Model

Miller Heiman's Strategic Selling Model is a widely respected framework that emphasizes understanding the various roles within a buying committee. It identifies key stakeholders and their influence on the decision-making process. The roles typically include:

• Economic Buyer: Holds the budget and makes the final decision.
• User Buyer: The person who will actually use the product or service.
• Technical Buyer: Evaluates the technical merits and compatibility.
• Coach: Internal champion who provides insight and guidance.

This model helps sales teams navigate complex B2B sales by mapping out the influence and priorities of each role, allowing for targeted strategies to address each stakeholder’s needs and concerns. This model was introduced by Robert Miller and Stephen Heiman in 1985 and has been developed and iterated by professional sales organizations over the past decades.

Right now, you can easily set up your buyer roles in your CRM system. If you are using Salesforce, you will find 9 predefined contact roles in the buying committee, If you are a HubSpot user, the list is slightly different. But both of them are variations of the original Miller Heiman's Strategic Selling Model, but offer a more flexible and customizable structure tailored to the specifics of a sales environment.

You might argue that these roles are for sales organizations and it's not marketing's job to work with them. If you think like this, you should not be reading this article now—you should first change your mindset.

In modern B2B GTM strategy, marketing and sales are inseparable, and you should never see them separately. Our marketing strategy should be aligned with sales and even customer service from day one. Only when all channels orchestrate harmoniously can we bring our product to the market successfully. We will tackle more about that in Step 2 and Step 3. Now let's get back to our audience.

Segmentation Savvy: Why It Matters

The market is a vast and diverse landscape. Imagine trying to sell the same hiking boots to everyone – from casual strollers to hardcore mountain climbers. Not exactly a recipe for success!

Market segmentation divides a broad target market into subsets of consumers with common needs and priorities. This is particularly crucial for products that serve diverse audiences with varied requirements. By segmenting the market, companies can tailor their marketing messages and product offerings to meet the specific needs of each segment, improving relevance and effectiveness.

Now imagine you are an e-commerce business owner looking for a data analysis tool to help you better manage your inventory and boost your growth. If you received the following two emails, which one would trigger you to read it and check the product?

The answer should be obvious.

Market segmentation helps marketers craft more relevant and specific content and offers based on a better understanding of the specific needs and pain points of the segmented group. We will dive deeper into this topic in the next step. Right now, let's look at some of the most common segmentations.

Geographic Segmentation

Geographic segmentation divides markets by geographic regions, which is probably the most intuitive and easiest segmentation. Different regions may have varying demands and preferences, different languages, cultural norms, and economic conditions, and addressing them can increase the relevance and appeal of your product and marketing offers.

For big enterprises running businesses globally, this segmentation is not only practicable but also necessary, as it’s the foundation of localization and allows the alignment between marketing and sales efforts across different time zones and cultural contexts, ensuring relevant and timely engagement with prospects and customers.

Firmographic Segmentation

Firmographic segmentation can be a supplement to geographic segmentation or used independently depending on your scale and product. It divides markets by company characteristics such as industry, company size, annual revenue, and the number of employees. By understanding the specific needs and challenges of different types of businesses, you can tailor your marketing and sales strategies to address those needs more effectively.

B2B companies, especially those offering products or services that cater to specific industries or business sizes, should use firmographic segmentation. For example, a SaaS company providing CRM software may have different offerings for small businesses versus large enterprises.

HubSpot is a successful example in this regard. Being a CRM provider themselves, they have the advantage of collecting data on various attributes and classifying their potential business customers accordingly. They then offer different solutions for small businesses, medium-sized enterprises, and large corporations, each with tailored features and pricing models to suit the specific needs of these segments. This segmentation and customization are consistent throughout their marketing and communication, creating a coherent experience for their prospects and customers.

Behavioral Segmentation

Behavioral segmentation is a more advanced method that requires the collection and analysis of vast amounts of customer data, especially first-party data. This approach divides the market based on customer behaviors and usage patterns such as purchase behavior, product usage, benefits sought, customer loyalty, and occasion-based purchases. By understanding how and why customers interact with your product, you can create highly personalized marketing campaigns that address specific needs and motivations. This can lead to increased customer satisfaction and loyalty.

Behavioral segmentation is particularly beneficial for e-commerce businesses and content providers like media and publishers. Amazon is a prime example of this. The e-commerce giant uses customer purchase history, browsing behavior, and product reviews to personalize the shopping experience. Recommendations for products are tailored to individual users based on their previous behavior on the site. This approach not only enhances the user experience but also drives sales by suggesting relevant products.

Customizing Your Market Segmentation

You can create your own market segmentation using any of these three methods, or a combination and/or variations of them. The most important thing is to understand why you need to do market segmentation and the benefits it can bring to your business. Before choosing a segmentation method, consider your current resources, capabilities, and priorities. Remember, you can start with the simplest and most feasible segmentation and gradually improve it over time.

Conclusion

Defining your ICP and segmenting your market is the foundation of any successful GTM strategy. Use a combination of market research methods and direct customer feedback to gain a deep understanding of your ideal customers. This will set the stage for targeted and effective marketing campaigns, leading to greater success in the marketplace.

Stay tuned for the next step in our GTM series, where we'll dive into crafting a compelling value proposition and messaging that resonates with your target audience. This journey is just beginning, and I’m excited to share more insights and tips with you along the way.