Friday, July 27, 2012

Market segmentation 101

The creator of Bidsketch wrote this piece about how market research led to a new pricing model that doubled his monthly revenue:
What industry do they belong to?
How many users do they have?
How often do they use Bidsketch?
What features do they use the most?

The next step was to have phone calls with most of the founders/CEOs on the list.

Some key questions I asked in my phone calls:

How many employees do you have and how many people use Bidsketch?
How much time does Bidsketch save you on each proposal?
How important is feature X to you/your team?
Describe your typical/ideal proposal workflow.
In order of importance:
1. Know your users
2. Understand their needs
3. Determine the right customer segments - 3 is a good number of segments
4. Target each segment in your pricing model

Extra credit - Most users don't get the difference between Basic and Advanced. Ergo, they opt for Basic, because it is cheaper. Create segments that provide an association between users and their actual profession/status.

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