Why identifying the right customer segments is the starting point of sustainable growth
A great product or service doesn't guarantee success. Without a strategic approach to market entry and expansion, even the most innovative solutions can struggle to gain traction. At the heart of any effective go-to-market (GTM) strategy lies one critical principle: market segmentation.
At OnTarget, we help companies unlock growth by bringing clarity, focus, and structure to their GTM motion. And it all starts with understanding exactly who you’re going to market to and why. That’s where segmentation makes all the difference.
What is market segmentation?
Market segmentation is the process of dividing your broader market into distinct groups of potential customers who share common characteristics such as industry, company size, location, or specific needs. Each segment is then approached with tailored messaging, offerings, and go-to-market tactics.
Instead of shouting into the void, segmentation allows you to speak directly to the people who are most likely to buy from you — in a language they understand, through channels they trust, and with solutions that actually matter to them.
Segmentation can be based on several criteria:
- Firmographics (B2B): industry, company size, revenue, geographic location, growth stage
- Behavioral: product usage, engagement level, purchase frequency
- Needs-based: pain points, desired outcomes, urgency of problem
- Decision-making: buyer roles, internal dynamics, procurement process
Why is segmentation essential to a GTM strategy?
Let’s put it plainly: Without segmentation, you're guessing. With segmentation, you're optimizing.
Here’s how segmentation enhances every layer of your GTM strategy:
1. Sharper positioning
When you know exactly who you’re talking to, you can craft a value proposition that directly addresses their priorities. No more generic promises, just relevance.
2. More effective messaging
Tailored communication converts better. Segmentation allows you to refine tone, content, visuals, and messaging to resonate with each group.
3. Sales efficiency
Your sales team spends less time qualifying and more time closing. With segment-specific insights, sales reps can ask the right questions, offer targeted solutions, and accelerate the decision-making process.
4. Smarter resource allocation
Rather than spreading your budget thin across all markets, you invest in segments that offer the highest potential for growth or profitability.
5. Faster learning loops
Focused segments enable you to track what’s working and what’s not more clearly, so you can iterate faster.
Real-world example: selling to the maritime industry
Let’s say your company has developed an AI-based maintenance solution for maritime vessels. Your total addressable market might include:
- Superyacht management companies
- Commercial shipping fleets
- Offshore energy platforms
- Port service providers
Each of these segments has completely different operational realities, budget structures, and decision-making dynamics.
Now imagine trying to market the same product in the same way to all of them — you’d likely miss the mark in each case. But with clear segmentation:
- You can position the solution as a cost saver for commercial fleets
- As a luxury uptime enhancer for superyacht owners
- As a compliance-driven necessity for offshore platforms
Same product. Different story. Different results.
How to build a segmentation strategy that works
You don’t need to get it perfect from day one. But you do need to get started. Here’s a framework we use at OnTarget when guiding clients through segmentation as part of their GTM development:
1. Audit your current customers
Who’s already buying from you? What do they have in common? What triggered their decision? This helps define your early "ideal customer profiles" (ICPs).
2. Analyze the broader market
Look beyond your current base. What are the major verticals, use cases, and trends in the market? Where are the gaps or unmet needs?
3. Group by shared characteristics
Form meaningful segments — not just by industry, but by problem-solution fit, level of digital maturity, or go-to-market readiness.
4. Prioritize your segments
Not all segments are created equal. Evaluate each based on criteria like:
- Market size and growth potential
- Level of urgency or need
- Competitive dynamics
- Strategic alignment with your offering
5. Tailor your GTM approach
Now that you know who you're targeting, adapt your messaging, content, sales playbooks, and marketing channels accordingly.
The risk of skipping segmentation
Trying to sell to “everyone” is like setting your GPS to “somewhere.” You’ll get moving but probably not in the right direction.
Without segmentation:
- Your message is vague and unmemorable
- Your sales cycle is longer and less predictable
- Your team is misaligned and unfocused
- Your GTM efforts feel more like trial-and-error than strategic execution
Segmentation gives your GTM motion structure, direction, and momentum.
A note for scale-ups and innovators
Many fast-growing companies delay segmentation because they think they need to "scale first, focus later." In reality, the opposite is true.
Early segmentation doesn’t limit your market, it helps you win it. Focused success in one or two high-fit segments builds credibility, reference cases, and learnings that you can then leverage to expand into adjacent segments later.
Final thought: clarity is your competitive edge
In crowded and complex markets, the companies that win are not always the ones with the most features, the biggest teams, or the flashiest branding. They’re the ones with clarity about who they serve, how they serve them, and why it matters.
Market segmentation is how you gain that clarity. And once you have it, everything else — your product roadmap, messaging, sales strategy, and even customer success — becomes sharper, faster, and more effective.
Need help mapping your market?
At OnTarget, we specialize in helping B2B companies in high-value industries build GTM strategies that drive real traction. Whether you’re just entering a new market or want to sharpen your focus for growth, we’ll help you identify your most promising segments and create a tailored plan to win them.
