How do you manage the risks of entering new customer segments?

I think we have a tendency to just create our ICP:s and Buyer persona profiles from internal input, and then we struggle to validate or to ongoingly challenge our views. Having all sales people schedule at least 3 interviews with companies in your assumed ICP:s per quarter will give you updated insights into the actual changes that are happening in the ICP to determine if it is still our ICP. Give them a list of questions to ask, have them record the sessions. Benefits: - Ongoing insights from the real live ICP:s you are targeting. - Great content idea factory - The sales people will learn loads - they wont ask these questions without your help.

Before you start aiming for a new group of people, it's important to know exactly who your best customers are, what issues they face, and how your solution can make their lives better. This way, you can concentrate your efforts, save your resources, and come up with a strong reason for them to choose you. You can use tools like surveys, chats, or made-up characters to create your perfect customer picture and make sure your guesses are correct.

Every product could have multiple segments that it could sell into. You need to profile your product and understand what concerns it is able to address, and then find out apart from the segment which other market segment has similar concerns or work in similar environments and have similar needs, then slowly move into that segment by first targeting prospects that welcome products that can help solve some of the issues they currently face. Once you are successful here, gradually roll out the products to a larger customer base. In my view one to one discussions and understanding of how this product works as a solution in this new segment is the best approach.

This is basically the ABC, first steps while targeting new segments or ramping up new teams. The more you can narrow and better you understand your ICP and their specific problems the easier it will be to know where to find them, how to approach, use their language rather than your usually internal terms. Basically that’s how you win.

Develop customized marketing strategies and determine appropriate product pricing. Understanding the dynamics of the customer segments is key while establishing appropriate service options that bring high return and incremental revenue.

Entering into new customer segments is ideally based on data-driven insights and includes strategic partnerships as well as growth by acquisition of existing services. Organizations often remove many of the risks associated with reaching new customer segments when they simply purchase a proven solution. A good example of this is when Google bought Fitbit and its associated software instead of spinning up a new and more costly solution. Google simply entered into the medical wearables market that was new to them with some level of confidence based on their acquisition strategy.

Now we are talking about being able to assess the opportunity size, which will allow you to make a basic plan on how to grow step by step with realistic KPIs and goals. Obviously it includes upfront verifying PMF.

For any product that needs to get into new segments it’s important that it’s trying to address a segment that has growth potential and could be lucrative if successful. Yes, it’s possible there could be more competition but it’s also likely it’s a larger opportunity then the niche you have been addressing so far focused on a narrow segment. The volumes could offset the lower margins here and there could be scalability - it’s important as mentioned earlier in the article that do not spread your resources too thin - you can’t be everything to everyone ever - so focus on a larger segment where in your assessment you could make an impact with an entry and make it a viable business proposition and get a share of the business.

As with any project you need to have clear steps, defining the right milestones to be achieved at every stage. Utilizing the SMART frame is very helpful however you need to remain vigilant for any need to adjust, revisiting the process oftentimes

Generating sales is important, but Key Performance Indicators (KPIs) shouldn't be limited to just sales metrics. They should encompass a broader spectrum, including both stakeholder-related KPIs and both tangible and intangible aspects. Trust plays a pivotal role throughout the entire process, even in something as seemingly simple as answering the phone. Therefore, it's essential to focus not only on achieving hard sales but also on crafting a comprehensive and trustworthy package.

A lot depends on the kind of products we are talking about here - certain consumer products where the cost is low could have a quick penetration, a big ticket value item could take longer time. You need to set some deadlines and prepare a check list and tasks to be done and by when. A dipstick approach tells you if you are in the right direction and need to move in more aggressively. The only metrics now is the lifetime value of any customer no matter what product we are talking about. Depending on the product costs, profitability, potential you could set your own yardsticks to monitor the progress and move further ahead. It’s important that while you do all this and try to make inroads into new segments, you do not ignore existing ones.

Absolutely. If you do not wish to drain your valuable resources, you need to choose a new segment, explore all possibilities, gain a thorough understanding and then pitch the product to the new segment and then see the value it delivers there. Once you have had a reasonable success, that is you have had a chance for a repeat buying or referring the product and solution you provide by the customers in the new segment to other customers, you push ahead more aggressively to cover the market segment and reach out to a larger customer base. Product sampling, usage support, field meetings can expedite the process of rolling into new segments and taking the competition by surprise.

Once you have your ICPs and buyer personas roll up your sleeves and conduct interviews. Meet with your prospect stakeholders, not to sell to them but to learn as much as you can about them. My most common approach has been in the lines of: "We are planning to address X market or segment. We've done our homework but I don't know the industry as well as you do. Can you tell me if my logic/strategy makes sense to you? Do you get the USP I am trying to pitch?What am I missing? What would you like to see from me?"., Be open, transparent and curious with your prospects. A lot of them will revert as customers going forward. But more importantly you will get insights that will make sure you have less blindspots.

Establish a system to gather regular feedback from the new segment. It helps in making necessary adjustments and understanding their evolving needs.

Yes, reaching out to customers via email, webinars, social media and phone is all a great way to present your products and the concerns they address. However, please do note that meeting customers one on one and taking feedback, sampling a product and getting an understanding of how the product is helping them, going out to provide usage support or through audio visual means are necessary for a quicker understanding and roll out. A successful business is one where not only the customers like your product but are willing to refer it to others. They are willing to review it positively and refer to other potential customers. That can greatly reduce costs. Make sure your product delivers that kind of value to the new segment.

Asking questions is one of the most useful tools that is greatly underutilized in sales. Salespeople are so focused on convincing the client that they fail to listen to what the client wants. Asking questions for the sake of it isn't useful such as: "Do you have any questions?" or "What do you think, is this what you want?" Leading Questions that guide the client to get to the desired outcome are what's important. Such as: "Do you see the value our solution provides you?" or "what would it take for you to hit the green light on proceeding with us?"

There's alot you can learn from the internal customer facing teams as they are touch points of the organization because they interract with different segments and types of clients. They hold a rich background on what customers need and want. Never overlook this team in the test and evaluation step of the process.

Consider vertical or horizontal integration across the value chain, entering a new market can also happen via strategic partnerships mitigating the risks considerably

Before entering a new segment, take a hard look at the competition you’ll be facing. It may be another company, it may be a substitute product, it may be other factors (including cultural differences). Regardless of your product or the perceived demand, you must look ahead to see how your competition will respond once you enter a new segment.

Prepare a plan that outlines potential risks and how to address them. This includes a strategy for rapid course correction if things don’t go as planned.

Consider ways to de-risk the costliest elements of your proposition. Decide how long you will need for a true read of the market after your initial launch, and align this date with early break clauses within contracts with service providers and leases for physical locations. Retailers breaking into new markets might consider pop-up stores to test the waters before committing to a long-term lease. This enables you to pivot relatively quickly if your current approach is not delivering the expected results.