How to Narrow Down Your Target Market
When you are bringing a product or service to market (or in fact, deciding how you want to position your whole business in the marketplace), businesses often start by looking at their Total Addressable Market - that is, the maximum size of the possible customer base who would want to buy your product or service.
This seems obvious: as a business you want to have a large potential customer base so you can sell to lots of people and drive revenue.
In some cases, however, this total market can be too large for you to make a meaningful impact. It's important to narrow down the ideal type of customer who needs your services and will eventually be in market for them. Then, you can narrow down this large Total Addressable Market to a realistic and refined Total Realizable Market.
As an example, Roadmap's Total Addressable Market (TAM) = all businesses.
But we all know if you serve everyone, you serve no one, so you have an ideal customer profile defined by firmographics to help you focus and realize your Total Realizable Market (TRM).
Niche Down
TRM = Small Businesses (under 100 employees and under $100 M) that sell to B2A (Business to Any)
Niche Down Again
- By Industries
- By Locations
- By Firmographics (are they growing?)
All of a sudden, you TAM goes from millions to thousands. This gives you a better focus for sales and marketing efforts. But keep niching down with Intent Data.
Intent Data is data signals on target accounts (whether assembled in your CRM or complied by third-party sources) that tell you which target accounts are showing indications they may be ready to buy. This data further focuses on marketing and sales, compressing the sales cycle and making all teams more efficient in filling your sales pipeline.
So focus first on determining your ICP (Ideal Client Profile), then niche down that total realizable market with intent data to get a market that's showing buying signals and that is where you should focus on to fill your pipeline.
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