Use 2×2’s to Grow Brands and Quickly Conduct STP

Segmenting, targeting, and positioning can become a complicated exercise that burns time, effort, and energy.  Below you will find a proposed methodology that for me, has worked 90% of the time, with 20% of the effort.

Segmenting, targeting, and positioning exercises aren’t only for a launch when you are bringing a product to market.  Segmenting, targeting, and positioning exercises need to be done for a variety of reasons during the life cycle.  These include:  poor performance, the entry of a new competitor, a change in your product profile (i.e. enhancement), or an unexpected change in customer behavior or perceptions.  You can change the trajectory and grow your brands, products, and services by revisiting it.

This article assumes a working familiarity with segmenting, targeting, and positioning.  For a primer, go here. Instead, this post is just to help you navigate it faster and provide you with a method to approach it and make it easier.

Segmenting, Targeting, and Positioning…in that order

Make sure no one distracts you by convincing you that the order isn’t S-T-P, or that targeting comes last.  If anyone suggests this, they are likely confusing ‘Sales Targets’ with ‘Marketing Targets.’  There’s only one order for this exercise.  Segmenting…Targeting…Positioning.

Using 2×2’s

The method I suggest uses 2×2 boxes to tackle the exercise.  2×2 boxes can reduce very complex things into nuggets that can be more easily conceptualized, understood, explained, and digested.  Boil the task at hand down to the two most important considerations and place them on each axis.  Plot the options in each of the four boxes.

Segmenting

Simple segmentation can be boiled down to the two axis of ‘control’ and ‘precision.’  Control is a person’s ability to have influence on his situation.  The two options are Geography, a factor which we only have limited control, and Behavior, which a person can control.

The other axis, Precision, is how advanced our understanding of customer information may be as marketers.  Geographic location of customers is one of the simplest ways to segment customers.  Demographic segmentation requires significantly more information, and a more robust action plan to execute against.  Similarly, it is easier to watch and observe how customers behave, but is harder to learn and fully understand what they believe.

Marketers should evaluate all categories and based on the information available, choose a segment category that they believe can be quantified with enough information to be actionable.

If you can’t get data about your customer’s beliefs…you shouldn’t segment your customers in that way.  The same holds true for any segmentation category.

Once you have chosen a way to segment, the hard work begins.   Profile your customers based on their geography, demographics, behaviors, or beliefs.  Look for the differences that are clear between the customers so you can understand how they think and act.

Targeting

Now that you have your customer segment identified, you need to establish how you plan to target them and the approach you will use.

The targeting matrix considers the two factors of Potential and Ability to Win.  Purchase potential is how much that customer segment can impact the growth of your product.  The ease a customer can be convinced to make a purchase decision is their Ability to Win.

Breaking out the different groups in your chosen segment, identify which you would ignore, grow by trying to add to the funnel, convert from another product, or target for education.  Identify the group that you anticipate will be the most valuable for your business by applying metrics to size them.

Marketing targeting exercises oftentimes becomes more confusing than it should be.  As mentioned previously, many people confuse it with sales targeting, which is a different exercise.  Good Segmenting, Targeting, and Positioning ensures that sales targeting does not become mistaken for marketing targeting.  If not, it will water down the results and executional effectiveness.  If you have to, keep the working group to a very small team of marketers to combat this problem.

Once you have chosen a target group within the segment, you can dig into how you want to position your product with that group for the greatest impact.

Positioning

You now have a target, or a couple that should be explored because they could lead to growth of your business.  Great positioning should take advantage of what you have learned about your customer in segmenting and targeting.  Design your positioning to make selling your products and services easier.

An article on the HBR website really changed my thinking on positioning, and I adapted what I saw there to fit more closely to the healthcare and biotech market.  It is a great read and can open your mind to how to apply the approach not just to positioning, but to overall brand strategy.

In healthcare and biotech there is a tendency to be very safe or try be all things to all people.  There is also a very high incidence of ‘me-too’ positioning where competitors have product positions that are nearly indistinguishable from each other.   It is a warning sign if you are consistently ending up in the ‘Aspirational’ box, or are settling on positions that migrate to the safe zone of ‘customer or patient confidence.’

Challenge yourself to dig in and map your competitors positions on these axis.  Determine where you can place yourself to reach a competitive advantage.  Additionally, spend the requisite time on defining the specific adjectives to convey what your product is about.  Minor variations in word choices can make or break your positioning, and may make or break your campaigns.

Suggestions

Segmenting, targeting, and positioning is one of the few exercises that can be dangerous if it isn’t done well.  Most marketing activities, when done even at 50 improve your growth rate and are things you can continue to build on.  Starting with a framework you can commit to when you approach segmenting, targeting, and positioning could be the difference between growth or decline.

Please take this framework and adapt it as needed. 

I’d love to hear your impressions of it.

Comment or drop me an email.

Where you have improved upon this foundation?

Where are other places 2×2’s can apply to solve difficult problems?