When’s the Best Time for My Company to Enter a New Market Segment?


You chose a beachhead market. Aligned internal stakeholders. Repositioned the business and external messaging. Wrote amazing case studies. Tightened your product-market fit. Switched to a proactive growth model. And business is booming.

Don’t stop.

It takes discipline to expand gradually.

Now, there’s 2 things that’ll need to happen:

  1. When the timing’s right, you’ll transition your messaging to cater to late majority customers.
  2. When your business is solid enough, you’ll expand into adjacent market segments.
The Adoption Curve & New Market Segment Expansion
The Adoption Curve – Transition to The Late Majority

Looking for New Market Segments

It’s a good time to revisit the customers you contacted before, but that didn’t purchase.

Has the tide changed?

The late majority – or conservatives – is the last significant market segment in the adoption curve. Like early adopters, they’re stubborn in their resistance to the early majority.

The late majority only buys when a product has become standard. In other words, they follow the early majority.

That’s why they’re a great gauge of whether or not you’re dominating your beachhead market.

Their primary objective is to avoid risk and “don’t screw anything up.” It’s your “no one ever got fired for buying IBM” type of customers.

They want to see proof before deciding to use a product. They’ll put off using it until it’s really easy to adopt.

They might know of your company or have become aware of it through their early majority contacts, but they’re quite different from them.

At this point, you’ll definitely know of a few prospects that seemed like perfect fits as customers, but were just not ready.

Revisit those organizations:

Have they become familiar with your product? Do they know of other organizations using your technology? Has the problem evolved? Is the timing better? Can you provide sufficient proof to de-risk implementation?

You’re looking for your tipping point, when – based on word of mouth and market share – your niche market segment dominance becomes inevitable.

When’s the Right Time to Enter a New Market Segment

More specifically, you want to consider expanding into new market segments when:

  • You’ve captured the largest market share within your beachheadAre you at 30, 40 or 50% market share? Don’t stop until you dominate the market.
  • All prospects have at least heard of your productDo you have good brand awareness? Can you do a market survey to find out?
  • You’ve already taken away the best opportunities – the most profitable, the fastest growing, the best customers. You want to make this an un-assailable position. Let competitors fight for scraps.
  • You have resources that can be freed up without reducing your grip on the market – You can service the late majority while expanding into new market segments.
  • You have the cashflow to build other salesforce, support teams and marketing pipelines.

When the momentum from capturing market share in your beachhead is felt, you can leverage it to expand into new market segments.

Expand gradually, and takeover more market opportunities.

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How to Truly Own Your Beachhead Market in B2B

How to Truly Own Your Beachhead Market in B2B
© Control Alt Deceit: A Game of Lies, Betrayal and Questionable Business Strategies

In B2B, you need to change your mindset to truly dominate your beachhead market.

Your marketing, your distribution, your whole product, your focus — everything has to change.

Your value proposition has to change from ‘look at all the great things that can happen with our product’ to ‘here are the specific problems we can solve’.

It’s a very different game.

You need your one sentence benefit; it has to be crystal-clear.

As entrepreneur and author Tim Ferriss says, “People can dislike you or your business but they should never misunderstand you.”

You only get one shot at positioning per prospect. Your positioning should answer: How do we help customers like them. What’s so great about it? And so what?

It’s essential.

The great thing is that once your message is consistent and targeted, it becomes a lot more impactful.

Once you’re able to take on your prospects’ perspective, wants and challenges, you can speak to their reality.

At LANDR, where I used to work, it was not uncommon to see the performance of messages and landing pages double when switching from generic messaging – speaking to all customer types – to speaking to a targeted audience.

You can do the same.

At this point – and based on your new positioning – you’ll want to do a complete rework of your website, your sales collaterals, your ads, your landing pages, your social media accounts, your whitepapers, your testimonies, your client lists and case studies.

In all likelihood, you’ll need to go a lot further than that.

How to Find Candidates for Case Studies in Your Beachhead Market

Case studies are an essential currency in B2B. Along with in-person events, they’re often cited as the most effective B2B marketing tactics.

They’re good for quickly building credibility and giving you an edge over competitors, which is just what you need.

To find the right case study candidates, you should look for:

  • Customers with good product knowledge – They’ve used your product for a long time or use it extensively;
  • Clients that achieved exceptional results – They got a significant return on their investment using your product;
  • Customers with recognizable names – And here, it’s not names that are recognizable to you, it’s names your ideal customers would recognize. Who do they respect?
  • Customers that came to you after working with a competitor can also be good candidates; they’ll help highlight your competitive advantages and the ease of switching from another vendor.

Case studies are usually best included in contracts. Melanie Crissey, product marketer at FullStory, recommends working case study discounts into renewals, not new contracts, because when you sell a deal, you can’t know with certainty that the product will work for the customer.

Once you’ve identified a few candidates, you’ll want to reach out, find common ground and interview them. You can use this case study question list to make sure you’re asking the right questions:

How to Write Case Studies for Your Beachhead Market

A reasonable length for a case study is around 500 words. You want to make sure your case study has a logical flow and tells the story from start to finish.

A great case study allows someone to really get to know the customer.

You’ll want to:

  1. Explain the problem
  2. Introduce the company/product
  3. Describe how the challenge was overcome, and
  4. Sum it up, giving it a happy ending

You’ll include real numbers, talk about the specific strategy and quote your customer in their own words to make the case study relatable.

Now, getting case studies won’t always be an option. Some clients – even real early advocates – are limited in what they can say or share publicly.

In those scenarios, you can negotiate to use the company name and logo on your website, write a short testimony, publish a joint press release about the deal, write a blog post or technical paper about the experience, get the customer to take occasional calls from prospects or do a joint presentation at a conference.

There’s many ways to get creative here.

But even after having created compelling case studies, you’ll want to go deeper:

How to Truly Own Your Beachhead Market in B2B

You lose a lot of time learning a domain which isn’t yours. You’ll have a hard time being as credible as an expert from the market with established contacts.

As a founder, you should always think: Who in the industry already has the knowledge we seek? And, who can I recruit as partner, advisor or employee to gain that credibility?

Those people can be:

Advisors – People with influence or working for influential companies in your beachhead market OR market experts with the right connections.

When we were targeting our security beachhead market at Psykler, the name of a certain security specialist kept popping up.

It was clear that a lot of our prospects looked up to this person and that he had a lot of influence on the market we were targeting.

We invested a lot of effort in convincing that influencer to join us as an advisor. We made some headway, but it was still a work in progress when Psykler ran out of money.

Experts and salespeople selling or working in your beachhead market – There’s most likely people already selling to your prospects or working in other capacities to service those customers.

They already know what’s sellable; they know the levers and pain points. Chances are, they also have connections. They’re the people you want to hire to speed up market dominance.

Other companies selling in your market – You may be the first with this solution in the beachhead market, but there’s certainly other companies servicing the same customers. Get close to these companies.

They can help open doors, provide insights and, maybe, even partner up to help you capture market shares.

Finding Watering Holes in Your Beachhead Market

To integrate even deeper, you’ll want to discover the watering holes and go where the customers are. Where do prospects gather for pleasure or for work?

It can be a conference, tradeshow, seminar, restaurant, bar, hotel or professional association networking event.

Swedish data visualization startup Spotfire even set up their company’s sales office in the same building as the two restaurants where their targets – energy industry executives – met for lunch and drinks.

You need to go to the places where your target customers already are and piggy-back on those places to attract them.

Events and conferences are fast-tracks to communities / target markets. What events do your prospects value? Where do they go to learn?

Box CEO Aaron Levie jokingly says that every B2B company has a conference and that your company isn’t serious if it doesn’t have one. ;-)

That’s because it works. You want to build the community between customers; be the place where they want to be and learn.

Figure out what interests they share and how they buy.

You need to adapt to that reality.

It’s a lot of effort, but the more deeply you integrate in the market, the more your beachhead will pull you towards the things that truly matter.

How to Find Business Opportunities by Analyzing B2B SaaS Pricing Pages

A lot can be learned by studying B2B SaaS pricing pages.

Once you’ve honed in on a market, you can find business opportunities by analyzing the technology landscape, looking at what business customers are already buying.

You can speed up product-market validation by identifying gaps in the product offerings on the market and capitalizing on those opportunities. This is what this post is all about.

What You Can Learn by Analyzing B2B SaaS Pricing Pages

B2B SaaS pricing models are usually representations of the company’s business model.

The features, plans, price points and omissions all say something about the way the business delivers value to its customers. In other words, every line in a pricing table is intended to get a certain reaction from prospective customers.

By going through different pricing pages in the market you’re targeting, you can learn about:

  • The features that are most-valued by customers;
  • The “whole product”, or the features that customers expect;
  • Customer segments and the functionalities they value and pay for;
  • Typical engagement length and churn rates.

How to Analyze B2B SaaS Pricing Pages

You’ll need 3 things to successfully analyze pricing pages in your market:

  1. A clear definition of your vision: When you know what you’re trying to achieve it’s easier to define competitors and solutions worth including in your analysis;
  2. A list of the players in the space: You can find B2B SaaS products competing in your space (or related spaces) using Google or by querying sites like AngelList and Crunchbase;
  3. An idea of which businesses are successfully selling in the space: For this analysis, it’s best to focus on businesses generating actual money. You can use directory sites like Capterra, G2Crowd or GetApp to get a feel for a business’s customer base. Alternatively, some businesses might have published revenue numbers you can use.

Select the 10 to 12 most relevant products’ pricing pages. For each of these pages, we’ll look at value metrics, expected features, plan differentiations, add-ons and price points. It’s all below.

How to Find the Value Metric in a Pricing Table

A value metric is the main reason why customers buy a subscription (e.g. number of users). It’s also often the reason (e.g. ‘we need more user accounts’) why they upgrade to a higher-priced plan.

In the context of a multi-axis pricing model (e.g. number of users and features), it tends to be the main axis along which customers make purchase decisions.

As an example, project management tool Wrike (below) has both feature and seat differentiations for each of its plans:

B2B SaaS Pricing Pages – Wrike Pricing Page
Wrike’s Pricing Page

To find the value metric, look for the main benefit that fluctuates in either quantity or quality from one plan to the next.

Knowing what the value metric is tells you what businesses expect to pay for (e.g. users), and how they evaluate purchase decisions for this type of software.

How to Define “the Whole Product” with B2B SaaS Pricing Models

Typically, the common functionalities across the different pricing plans are part of the whole product – the things that must be put in place just so your startup can be considered a valid vendor by your prospects.

B2B SaaS Pricing Pages – Wistia's Standard Features
Wistia – Standard Features

Those features are important enough to be listed, because they have an impact on the buying decision, but they’re not strong enough to get customers to upgrade to a more expensive subscription.

You’ll probably have to build all of these features just to be able to compete with the specific product.

How to Analyze Plan Breakdown

A well-designed pricing page helps prospects quickly self-qualify:

B2B SaaS Pricing Pages – Leadpages Upgrade Path
Leadpages – Upgrade Path

A well-designed pricing page also makes it easy to understand the transition from plan to plan, by making the differentiating features and benefits crystal clear.

For the above example (Leadpages), a company would upgrade from Standard to Pro for:

  • Unlimited A/B Split Testing;
  • Online Sales and Payments;
  • SMS Campaigns;
  • Email Support.

They would also upgrade from Pro to Advanced for:

  • Advanced Integrations;
  • More SMS Campaigns;
  • Priority Support.

SMS campaigns seem to be a distinctive feature (possibly the value metric) that helps move customers from one plan to the next. For larger organizations, deeper integrations, advanced support and personal customer success drive upgrades.

Plan differentiations give good insights as to what different types of organizations and buyers value.

Are There Add-ons?

According to ChartMogul, roughly 20% of B2B SaaS businesses sell unbundled add-ons on top of their pricing plans.

B2B SaaS Pricing Pages – MailChimp Add-On Feature
MailChimp – Example of an Add-on Feature

Add-ons are features or feature groups that may only be valuable to a subset of the customer base. Those customers are generally willing to pay a premium for theses features.

These features hint at the existence of a sub-segment within the business’s core market. They’re opportunities to build niche products.

How to Analyze the Business Model

In SaaS, price sets perception. If the product is expensive, it may appear premium. If the product is inexpensive, it may attract a large number of smaller customers.

By displaying monthly prices first, the price point looks lower. By defaulting to annual plans, the price point looks higher. This can be a form of pre-qualification.

On top of the additional cashflow, annual plans help lessen the impact of churn or cancellations. Businesses heavily promoting Annual or Quarterly plans often do so to reduce a high churn rate.

The price points and plans most highly recommended say a lot about what a business’s ideal customer profile is.

B2B SaaS Pricing Pages – Survey Monkey's Default Yearly Plan
Survey Monkey – Annual Subscription by Default

Bonus Tip: Revisit Past Versions of B2B SaaS Pricing Pages

You can use Wayback Machine to revisit past iterations of pricing tables. This will allow you to see what businesses have learned about their business models.

  • If a feature was free and it’s now included in a paid plan, it usually means that it was driving upgrades;
  • If something was part of a paid plan, but it’s now available for free, it often means that it was a strong incentive to get prospects to sign up.

This information is valuable and can be used to define a good product positioning.

How to Find Business Opportunities from B2B SaaS Pricing Models

Once you’ve analyzed the different pricing pages in your market, you can start thinking about how to compete with the established players.

To overcome the status quo coefficient and get businesses to adopt a new technology product, you need to find an area where you can be 10x better than the known alternatives.

To find those opportunities, ask yourself:

  • Are there ways to deliver significantly more value along a similar value metric?
  • Can you offer the value metric for free (or at a discounted rate) and bring forth a new value?
  • Can you turn an add-on feature into a standalone product for a niche market?
  • Are there ways to offer more value by creating a product focused on the specific needs of a sub-segment?
  • Can you turn a differentiating feature into a core part of your business?

There are a lot of ways to position your product by focusing on a niche and emphasizing different value drivers.

Understanding what businesses pay for helps you focus on proven value propositions to speed up your product-market validation.

How to Run Customer Exit Surveys to Improve Product Retention

No matter how great your product is, it is very likely that 40-60% of your free trial users never see the product a second time.Samuel Hulick, Author of ‘The Elements of User Onboarding’

Whether you’ve found product-market fit or not, your business will be confronted daily with:

  • Visitors coming to your site and leaving;
  • Users signing up for your product without using it;
  • Paying customers churning.

Although these 3 situations are completely different, they have one thing in common: they’re great opportunities to learn how to improve your product and tighten your product-market fit.

For this post, we’ll focus on customer churn (e.g. churners), but learning from all 3 situations is essential to make your business grow.

Why Customer Exit Surveys Matter

There are countless reasons why visitors cancel their subscriptions.

Maybe…

  • They found another product that better matches their needs;
  • They’re only using a fifth of your product functionalities;
  • Your product is slow and buggy;
  • Your support can’t answer their questions;
  • Their business has cashflow problems and no longer can afford the subscription;
  • Your user or economic buyer has left the organization;
  • The credit card associated with their account expired;
  • Your product has become too expensive;
  • Etc.

These situations can be handled differently, yet they all lead to churn.

Sometimes your product is at fault, and sometimes there’s nothing you could have possibly done to prevent the cancellation.

Customer exit surveys help you gain valuable insights into how well your product meets the goals and requirements of your customers; they help you prevent future cancellations.

How to Recruit Participants for Customer Exit Surveys

It’s notoriously hard to recruit customer exit survey participants.

Because they’ve already expressed dissatisfaction with your product (they left!), a lot of churners won’t want to engage further with your team. Chances are, the participants you’ll get will be either early adopters or the angry-type. It’s something to keep in mind when analyzing survey data.

The best time to ask churners to take your survey is at the time of cancellation – when they’re still thinking about your product – as part of your downgrade flow or via email.

You’ll get the best response rate by asking the following question during the downgrade flow:

“What’s the single biggest reason for you cancelling?”

  • [  ]  I don’t understand how to use your product
  • [  ]  It’s too expensive
  • [  ]  I found another product that I like better
  • [  ]  I don’t use it enough
  • [  ]  Some features I need are missing

If email is the best option for you, you’ll want to contact churners right after cancellation with a low-friction exit survey.

Some businesses incentivize their churners with gift cards (e.g. Amazon gift cards) to increase the number of responses they get, but this is often unnecessary, and can lead to biases in data collection.

How to Analyze Customer Exit Surveys

Once you know why your customers are leaving, it’s not hard to realize that some cancellations could have been prevented.

However, to truly understand what the data means for your product, you have to segment responses using key criteria:

  • Subscription plans (e.g. Basic vs Pro, Monthly vs Yearly);
  • Personas;
  • Product engagement;
  • Subscription length (First month vs Second year);
  • Feature set used;
  • Etc.

There are usually patterns to be found, but they won’t be apparent without segmentation.

These patterns will help refine your customer success, onboarding, pricing, product, etc.

Customer Exit Survey Interviews

To dig deeper into these patterns, I recommend conducting Jobs to Be Done interviews.

Contrary to customer discovery interviews, Jobs to Be Done interviews focus on a single story. In this case, it’s the story of what led your users to stop using your product and start using another. Because of this, these interviews are often call “Switch” interviews.

Here are a few customer exit survey questions I like to use in these interviews:

SAMPLE QUESTIONS WHAT IT TELLS YOU
  • Why did you initially sign up for [PRODUCT]? Did you evaluate other tools?
  • What was your previous experience with [SOLUTION SPACE]?
These questions help you understand your customer’s expectations coming in, and what convinced them to give your product a try. They help you understand whether the customer was a good prospect to begin with.
  • What were you using [PRODUCT] for? How often were you using it?
  • When was the first time you had the first thought that maybe [PRODUCT] wasn’t going to work? Or realized that you weren’t using it?
These questions help you understand the Job they were hiring your product for, and what sparked their cancellation.
  • What happened the last time that you used [PRODUCT] for [JOB TO BE DONE]?
  • What happened the first time you had [JOB TO BE DONE] that you didn’t use [PRODUCT] for?
  • Why did you cancel the day that you cancelled? Why that day, and not the day before or after?
  • What are you using now? How do you feel it compares to [PRODUCT]?
  • What happened the day you started to move to the new [PRODUCT]? Why did you start that day and not after?

These questions help you understand whether the customers are actually better off with a different solution. It also gives you good insights into the actual switch.

Note: if they’re not using a replacement product or just not using anything, it might mean that they perceived your product as a nice-to-have.

  • What would it take for you to reconsider subscribing to [PRODUCT]?
  • How much do you feel [PRODUCT] improves [JOB TO BE DONE]?
  • What is the biggest benefit of [PRODUCT]?
Bonus questions: These questions can help you evaluate the perception of value and benefits of your product.

To make sure you capture valid information, you’ll want to brush up on the code of conduct for customer interviews.

A Customer Exit Survey Template

There are several customer exit survey examples available online. To help you get started capturing cancellation reasons and Jobs to Be Done, we made our customer exit survey script available:

Get Started Fast – Download my Customer Exit Interview Template for Free

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The 9 Best Innovation Books for Innovators, Entrepreneurs & Intrapreneurs

I wrote Lean B2B to help entrepreneurs apply the Lean Startup methodology in B2B. It’s something I had struggled with, and a reality I was aware of.

Among the happy discoveries that followed the publication of the book was the realization that the second largest group of buyers (after B2B founders) was innovation consultants and intrapreneurs. Not only did they buy the book, they also found a lot of value in the content.

Organizations like the Netherlands Aerospace Centre, ING and Altran have used Lean B2B to prioritize innovation projects and capture requirements from business customers.

Innovation and entrepreneurship often go hand-in-hand in these organizations: To build or to buy is a question innovation managers have to answer. Businesses need to decide which innovation projects to fund.

To help assess innovation projects, I have put together a list of the 9 best books on innovation:

The Top Business Innovation Books

The Best Innovation Books in 2018 – Diffusion of Innovations

Diffusion of Innovations – Everett M. Rogers

One of the most important early innovation books, and the only book about farming on this list. Diffusion of Innovations is a great example of how technological changes impact all sectors.

The book introduced the different categories of adopters (innovators, early adopters, early majority, late majority, and laggards), on which Geoffrey Moore expanded in Crossing the Chasm. It also created some of the early theories around innovation adoption in large organizations.

The Best Innovation Books in 2018 – Blue Ocean Strategy

Blue Ocean Strategy – W. Chan Kim, Renée Mauborgne

A global bestseller among business leaders. Blue Ocean Strategy introduced a useful framework to understand the relative positioning of offerings and businesses.

Blue Ocean Strategy draws a comparison between the way businesses compete in red oceans, where companies compete in an existing market space and work to exploit existing demand, and blue oceans, where companies capture new demand by creating (and competing on) new parameters.

The Best Innovation Books in 2018 – Innovation and Entrepreneurship

Innovation and Entrepreneurship: Practice and Principles – Peter F. Drucker

The first book to define entrepreneurship as a systematic discipline. Innovation and Entrepreneurship remains as relevant today as it was 30 years ago when it was published.

The book advocates focus, building from a position of strength, and being market-driven. It’s a great read to understand the differences in the practices of innovation and entrepreneurship and create the processes to make innovation projects successful in organizations.

The Best Innovation Books in 2018 – The Lean Startup

The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses – Eric Ries

The book that kickstarted the Lean Startup movement, and inspired Lean B2B. The Lean Startup looks at how organizations can create greater levels of agility through continuous experimentation.

Minimum viable products (MVP), validated learning, innovation accounting, and the build-measure-loop are just some of the innovation tools that were popularized by The Lean Startup.

The Best Innovation Books in 2018 – The Innovator's Dilemma

The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail – Clayton M. Christensen

One of my favorite innovation books. The Innovator’s Dilemma demonstrates how incumbents have historically been disrupted by more focused and nimble technology companies.

The theory behind the book was widely adopted by the tech sector. Some of the largest technology companies today, like Facebook, now actively seek out products, platforms and companies with the potential to disrupt them (e.g. WhatsApp and Instagram acquisitions).

The Best Innovation Books in 2018 – Lean Enterprise

Lean Enterprise: How High Performance Organizations Innovate at Scale – Jez Humble, Joanne Molesky, Barry O’Reilly

To effect change in an organization, intrapreneurs need buy-in from management and processes to quickly respond to market changes.

Lean Enterprise looks at how The Lean Startup can be used to change processes and influence upper-management. It offers a lot of valuable advice on how to move fast at scale and change the organization. It’s a must-read if you’re in charge of an innovation project within a large organization.

The Best Innovation Books in 2018 – Creativity, Inc

Creativity, Inc: Overcoming the Unseen Forces That Stand in the Way of True Inspiration – Ed Catmull, Amy Wallace

Creativity, Inc looks at the creative and innovation processes of Academy Award–winning animation studio Pixar.

The book looks at the unique environment that Pixar built to maximize creative throughput and become one of the most profitable movie studios. There’s a lot to learn from this book in terms of leadership and creativity management, which are both key in innovation.

The Best Innovations Books in 2018 – Subject To Change

Subject To Change: Creating Great Products & Services for an Uncertain World – Peter Merholz, Todd Wilkens, Brandon Schauer, David Verba

Subject to Change was written by the partners of Adaptive Path, a now-defunct experience strategy and design agency.

The book explains why companies need to develop qualitative customer research capacities to understand customer behaviors and inform innovation projects. It’s a great primer on making an organization more customer-centric and market-driven.

The Best Innovation Books in 2018 – Making Ideas Happen

Making Ideas Happen: Overcoming the Obstacles Between Vision and Reality – Scott Belsky

Innovation won’t succeed without good execution. If your organization has great ideas, but doesn’t have the processes and people in place to realize them, it won’t be able to make a dent in the market.

Making Ideas Happen will help you build the capacity to make ideas happen. The book offers a lot of actionable advices to improve productivity and create better products.

Do you agree with my list? What are your must-read innovation books? Tweet at @LeanB2B.

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