If you use market segments and personas interchangeably, your market aim could be a little off! Use them in conjunction with one another though, and you have higher value targets for product management, product marketing, sales and customer success teams. The Playbook:
Think of market segments as the WHO and personas as the WHAT & WHY.
Market segments typically consist of the following three components.
- Industry, e.g., healthcare, retail.
- Size – large, medium, small or tier 1, tier2, tier 3.
Ideally, you’d use all three components, but many companies use only size and geography, or industry and geography because of the nature of their products or services.
Segmentation gives your organization a consistent way to answer the WHO question without any ambiguity by calling your target customers what they call themselves. Not far behind is your ability to quantify growth opportunities for new and existing solutions. Personas aren’t much help there. It’s far more difficult to count the number of target customers by role.
Personas complement market segments by telling you WHAT your target customers are trying to accomplish in terms of goals and priorities, WHY the aforementioned are critical to their success and metrics by which they’re measured. In other words, personas tell you how your target customers define their own success. The stronger your alignment, the better!
When you combine market segments and personas you have clearer value targets that align product, marketing, sales and customer success teams to the most lucrative market segments and a common set of customer outcomes with the highest strategic value in those markets.
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