Module 1 — Strategy · Lesson 1.3
Segmentation, Targeting and Positioning
Choosing whom to serve, what to say no to, and the one idea you want to own
What you'll learn
- Segment a market by job and circumstance rather than by convenient demographics
- Choose a target using explicit criteria and write down what you are choosing not to serve
- Distinguish a focus for your effort from a fence around your market
- Write a positioning statement that names the alternative, the difference and the proof
Every company is positioned, deliberately or not. If you do not choose a position, the market chooses one for you — usually 'another one of those', filed next to whatever you most resemble. Segmentation, targeting and positioning (STP) is the discipline of choosing on purpose. Its value is not the vocabulary; it is that each step forces a trade-off that teams otherwise avoid.
Strategy is choosing what not to do
Michael Porter's 1996 Harvard Business Review essay What Is Strategy? draws a line between operational effectiveness — doing the same things better than rivals — and strategy, which he defines as the creation of a unique and valuable position, involving a different set of activities. A position is only sustainable if it involves trade-offs: choices that make you better for some customers precisely because they make you worse for others. Porter's summary is the most useful sentence in this lesson: the essence of strategy is choosing what not to do.
For a small company the trade-offs are concrete. Serving agencies well might mean a pricing model, onboarding, case studies and integrations that enterprise in-house teams do not want. Choosing agencies means declining to build those enterprise features this year, and declining some enterprise deals. A positioning exercise that ends without a list of things you will not do has not produced a position — it has produced a slogan.
Segmenting by job, then choosing
Start from the jobs you found in research (Lesson 1.2), not from firmographic boxes. Group buyers by the circumstance that sends them to market and the progress they want: 'agencies whose clients now demand weekly reporting' is a segment; 'agencies with 20–50 staff' is a filter you may apply afterwards to find them.
Then score each candidate segment on a few explicit criteria: how acute and frequent the job is, how well your product does it compared with the alternative they use today, whether you can reach them affordably, whether they can pay, and whether winning some of them makes the next ones easier (references, word of mouth, a community where they gather). Write the scores down. The point is not precision; it is to make the reasons for the choice visible so they can be challenged.
A focus is not a fence
Classic STP advice says to target a narrow segment. The Ehrenberg-Bass Institute's buying-data research pushes the other way: larger brands have higher penetration and slightly higher loyalty on almost every metric, and brands grow mainly by acquiring more category buyers, not by deepening loyalty among a chosen few. The Institute's response to its critics stresses the 'double' in double jeopardy: being small costs you both buyers and loyalty.
The two are reconcilable once you separate focus from fence. A focus is where you spend scarce effort: the segment your case studies, product roadmap and outbound are built for, because a small team cannot be excellent for everyone. A fence is a belief that only that segment can buy from you — and it is usually wrong. Buyers outside your focus will find you and buy, and your brand work (Lesson 1.1) should be broad enough to be remembered by them. The LinkedIn B2B Institute's 95-5 framing makes the same point from the other direction: most future buyers are invisible to an in-market targeting list today.
Practically: target narrowly with activation and product, reach broadly with brand.
Writing the position
A position is the one idea you want buyers to associate with you when the job arises. A practical template has four parts. For whom: the target, described by job and circumstance. Instead of: the alternative they use now, including doing nothing. We are: the category frame that tells them what kind of thing you are. Because: the specific, provable difference — and the proof.
Example: 'For agency operations leads whose clients have started demanding weekly reporting, instead of stitching spreadsheets together every Friday, we are the client-reporting workspace that assembles the pack automatically from the tools the agency already uses — proven by a median setup time of one afternoon across our last twenty customers.' Every element is testable. If you cannot fill in the proof with something you can show, the difference is an aspiration and does not belong in the position yet.
Positions are held in buyers' minds, not on your website, so test the statement in interviews: read it to a prospect and ask them to say it back in their own words. If what comes back is not recognisably your idea, the position is not working, however good it looks internally.
Make the choice binding
- 1
Record the position in the charter
On /workspace-kvn, write the four-part position into Vision, and the things you are choosing not to do into Negation. The Negation is enforced: the agent will refuse to create tasks that contradict it, which keeps a written trade-off from quietly eroding.
- 2
Log the segment scoring as a decision
On /knowledge, record the segment scores and the choice as a decision entry, including the segments you declined and why.
- 3
In /clients, Deal Room and Network contacts carry tags. Tag each by segment so later analysis can split reply rates and deals by the segment you chose. Kavanah has no segment builder; tags are the honest mechanism.
Is the position working?
- Playback accuracy
- Of prospects you read the position to, the share who can restate its core idea in their own words.
- Healthy signal: Most of them. Our suggested bar is a clear majority across five or more tries.
- Share of new deals in the focus segment
- New Deal Room deals tagged with the focus segment, divided by all new deals, over a quarter. You compute this from tags.
- Healthy signal: A majority, with a meaningful minority from outside it — a 100% share suggests your brand reach is too narrow.
- Negation hits
- Times the agent refused a task because it contradicted a written Negation.
- Healthy signal: Some hits mean the boundary is doing work; none at all for months may mean it is too vague to bite.
Key takeaways
- ·Strategy is choosing what not to do; a position without trade-offs is a slogan.
- ·Segment by job and circumstance, then score segments on explicit criteria.
- ·Focus effort narrowly, but do not fence the market — brands grow by reaching many category buyers.
- ·A position names the target, the alternative, the frame and a provable difference — and is tested in buyers' words.
A position is abstract until it becomes a profile you can find and a message you can send. The next lesson builds both: the ideal customer profile and the message hierarchy.
Sources
- 1.What Is Strategy?
Michael E. Porter · Harvard Business Review, November–December 1996 · 1996
Operational effectiveness is not strategy; strategy is a unique and valuable position involving trade-offs; 'the essence of strategy is choosing what not to do'.
- 2.Answering critics
Byron Sharp, Ehrenberg-Bass Institute · marketingscience.info · 2016
Larger brands have higher penetration and slightly higher loyalty metrics too — the 'double' in double jeopardy.
- 3.Effective brand growth: Acquisition or retention?
Ehrenberg-Bass Institute for Marketing Science · marketingscience.info · 2021
Brands grow mainly through acquiring buyers, which argues against fencing the market off to a narrow loyal segment.
- 4.The 95-5 Rule
LinkedIn B2B Institute · LinkedIn Marketing Solutions · 2025
Most potential buyers are out of market at any time, so a targeting list of in-market buyers misses most future demand.