Compete Smarter, Not Harder: A Process for Developing the Right Priorities Through Strategic Thinking

CHAPTER 5

Targeting the Right Customers in the Right Space with the Right Offering

Pivot from strategy to tactics: strategic segmentation and value proposition—prioritization and following the money.

—“Ruthlessly Prioritize”—sign in Sheryl Sandberg's conference room at Facebook headquarters.¹

The Story of Henry Ford and the Vagabonds

Willie Sutton was a notorious bank robber. When asked why he robbed banks, incredulous, he responded, “Because that's where the money is.”² If only companies would adopt the same single-minded obsession with following the money. We think of segmentation as many things; however, we should consider it first and foremost as a tool to strategically prioritize business opportunities, the commonly accepted business practice of following the money.

Inside of the value chain, segmentation is about prioritization above all else—as much about what to overlook as what to focus on.

To begin, we need to be clear about what segmentation is not—and if you read no further than this paragraph in this book, your time reading may have been well spent. Repeat after me: you cannot segment products. There is no getting around this as priority number one in segmentation; yet it is perhaps one of the most common mistakes, one of the most common “Rizzutoisms,” in business. ...