The idea of "targeted" marketing has become ubiquitous over the last decade. In fact, I'd argue it's become so prevalent that, for many marketing teams, it's the only form of marketing they're doing. And it's a problem.
When I say "targeting", what I mean is focusing on one single vision of your ICP. And it makes perfect sense logically, which is why so many CEOs, COOs, and others get behind it. The idea that it's a waste of time to market to the masses when we know who our customer is.
And from this idea, we've moved away from many traditional forms of marketing to much more specific ones. For many marketers, the holy grail is to get into prospective customers' inboxes. It's like Field of Dreams: if you build your database, the leads will come!
But the problem is, the data actually shows the opposite to be true. The more we target, the less growth we see. And this applies across both B2C and B2B organizations.
The Ketchup Problem
Let me give you an example: ketchup. When I hear ketchup, I think Heinz. I'm by no means a ketchup aficionado, nor am I a Heinz loyalist, but when I buy it, I usually buy it from them.
Now, I don't buy a lot of ketchup. I probably pick up 2 or 3 bottles a year. One at the start of the summer, one near the end, and maybe one around January or so. But I am Heinz's best customer. Or rather, the customer profile I represent is.
But if we analyze Heinz's customer data, their marketing department will likely see some ketchup krazies in there. Customers who love ketchup and customers who love Heinz. Maybe they go through a bottle a month, maybe they go through a bottle a week, and the "targeted marketing" logic goes: we should be focused on them. Our evangelists! They buy 12 bottles a year! They buy 52 bottles a year! That's way better than 2 or 3! High frequency, measurable loyalty, strong preference. They are the obvious candidate for an ideal customer profile!
It certainly looks that way at least. So we start creating content for them. We start posting in Ketchup forums and taking out ads in Ketchup Weekly. And we do see an uptick amongst those ketchup lovers! But we've forgotten something. Most ketchup lovers are probably well aware of Heinz. Most of them probably know more about us than we do. We're spending a lot of time and money preaching to the choir, and ignoring the rest of the congregation. We don't convert any of those mustard fanatics who may be ketchup-curious. We don't introduce ourselves to new generations who are just getting into the condiment game. We stop being a household name and start becoming a niche product.
The reality is, for most products, I am the ideal customer profile: a light, occasional buyer. In fact, some of the biggest companies' best customers only buy their products once a year. The loyalists, extremists, evangelists? Those buyers look, from the inside, like exactly who a brand should be chasing. But they are not where growth comes from. They are already converted. There are not many of them. And the ceiling on how many more of them exist is low.
The growth lives in households buying Heinz two or three times a year, every year, without ever thinking of themselves as Heinz loyalists. They reach for it by instinct rather than decision. That instinct was built over years of consistent visibility, and it holds as long as the brand stays present. There are hundreds of millions of households like this. The aggregate volume is enormous, and the opportunity to win or lose them is always available, because their relationship with the brand is habitual rather than emotional. They stay as long as Heinz stays familiar. They drift the moment something else takes up that space instead.
Some of you might see this as obvious, but, again, the data shows that most marketers are missing this key fact. And just so you know that I'm not simply trying to be contrarian, check out the Ehrenberg-Bass Institute. They've done all the research on this and agree with me wholeheartedly.
Coca-Cola tells a similar story. Research has shown that a significant portion of Coca-Cola buyers do not purchase the brand even once in a given year. These are not lapsed customers or dissenters. They are infrequent buyers of a category they do not think about very often. Light buyers of this kind make up the majority of any brand's customer base across virtually every consumer category that has been studied. They buy less per occasion, but there are far more of them, and their lifetime contribution compounds over years and decades. The instinct to look past them in favour of high-frequency buyers is understandable. The math appears to favour depth over breadth. In practice, it works the other way.
Why This Matters Even More in B2B
The B2B version of this problem is less visible but just as consequential. Say your organization currently services a variety of industries including financial services, the entertainment industry, insurance, and a bunch of others. So, you create content, and take out ads where the decision makers within these industries live, right? You buy full page ads in the Insurance trade magazines, you buy booth space at financial service industry events, and you try and harvest as many email addresses as you can to bolster your database. That should work, right? Sure, you'll probably generate some leads with this targeted approach, but let's look at your competitor who takes a broader approach.
They take out ads in the national newspapers. They get TV spots in key major urban areas or, more likely, on major streaming apps, they get some transit ads out in key urban areas as well. They put themselves out in spaces so that your grandmother will recognize their name. She may not know what they do, or who they are, but she knows the name.
And that single factor: knowing the name, has a greater impact than all the e-blasts, webinars or event booths you'll ever do.
But, wait a minute: why are we targeting grandmothers? They don't buy my product! No, no they don't. But if your grandma knows about a company, chances are the people who do buy your product do too. And that's key, because 80% of B2B buyers know the product they are most likely going to buy when they start their research process. And that product is almost always the one with the most name recognition.
If you're marketing your SaaS org in a handful of subreddits and the people there love it, that's great, but it's not how you grow. Here's an example for those of you who might be a bit more… mature: Beta video cassettes were the better product on paper. It had evangelists amongst the emerging "video" niche, but it was VHS that dominated. Because more people knew the name.
Same with HD DVD discs and Blu-Ray decades later. Blu-Ray of course won that battle. While Blu-Ray was the more advanced format, it didn't win because of the specs on paper. In fact, the differences between the two formats was pretty negligible for the average consumer. But then the Playstation 3 came out, and it featured a Blu-Ray drive. And all of a sudden, the term was a household name, and from that point on, there was no contest.
When Targeting Becomes a Ceiling
Another example: for decades, SAP built its reputation on enterprise software. Large manufacturers, global banks, complex multinationals: these were the customers SAP understood, served well, and oriented its entire identity around. The brand became synonymous with enterprise-grade ERP, which was a genuine strength, but also, eventually, a ceiling. By the time SAP recognized the scale of the SMB market and began developing products specifically for smaller businesses, it faced a problem that had nothing to do with product quality: most small and mid-sized businesses simply did not think of SAP when evaluating their options! Their name was so stuck in Enterprise circles, that it didn't even register in SMB decision makers' minds when the time came to buy.
The brand association had been built so precisely around one customer type that it had become effectively invisible to an enormous segment of the market. SAP had to build SMB-specific products, SMB-specific pricing, and SMB-specific go-to-market efforts largely from scratch, in a market where competitors with less capable software had already built familiarity and trust.
The lesson is not that SAP should have ignored enterprise customers, or that you should ignore your niche verticals, but that you can't forget that a brand built entirely around its most intensive buyers eventually stops being known to anyone else. If you hyper-focus and target, you create this tiny ecosystem that, at best, has a distinct growth ceiling. At worst it isn't even self-sustaining and you end up shrinking year over year.
The buyers most worth reaching through brand activity are often the ones with no awareness of you right now, who will not be in the market for another two or three years, and who will make a relatively fast decision when they finally are. What shapes that decision is largely determined before the active search begins. Precision has its place. But in most categories, the discipline that matters most is not how tightly you can define your audience. It is how honestly you are willing to define how large that audience actually is.
The 50/50 Solution
So, I've blown a lot of smoke, what's the solution? Ideally, you split your marketing budget, 50/50 between vertical specific marketing and broader, brand awareness campaigns. The broader campaigns are going to create a future base of leads, bringing in new verticals you may not have even realized you serviced, new entrants into the fields, etc., with the added bonus that brand trust and authority goes up significantly with greater brand name recognition. The targeted campaigns are going to bring in that smaller amount of leads amongst orgs within your verticals who happen to be at specific category entry points. And the beautiful thing is, the broad campaigns will support the more specific ones.
So, while you may be tempted to double-down and pump all your budget into a handful of specific verticals, if you really want growth, you've got to play the long game and make sure my grandma knows your name.
Also, one last caveat: just putting your name everywhere isn't what I'm espousing. Good content and good copy matter more than you'll know. There are a million commercials, billboards, and ads that you see and forget immediately. There's more to it than just spray and pray!