Hello marketing leaders, strategists, and innovators! 👋 Thank you for dropping by to learn practical AI applications and gain strategic insights to help you grow your business, elevate your and your team’s strategic value as marketers, use business as a force for good, and help advance your career.

Prefer to Listen? Try the AI-Generated Podcast

For those who prefer to consume information through audio, I’ve used Google’s NotebookLM to transform this newsletter into a short podcast episode, featuring a natural conversation between two AI hosts. Although the hosts refer to me LIE-za instead of LEE-zuh :-), the podcast captures the insights in an engaging and relatable way, making the content more inclusive for different learning styles. You can listen to it here.

Disclaimer: This podcast was generated by AI based on this written newsletter and reviewed by me to ensure ethical and responsible AI use. It’s designed to provide an efficient, more inclusive way to consume information.

The Shift from “Growth at All Costs” to “Sustained Profitability”

In a world that has shifted from “growth at all costs” to “sustained profitability,” are you feeling the pressure to expand into new segments? upmarket into new enterprise verticals? internationally into more countries? Hold that thought.

In fact, narrowing your focus, not broadening it, is a key to success to achieving your goals in the era of AI. It’s now about choosing the select few segments that we can serve best and defend, and do so profitably. It’s about improving retention, increasing lifetime value, and building trust and loyalty.

Today, we’re diving into one of the most strategic and impactful uses of AI in marketing: using AI to evaluate, identify, and align on top target segments. This isn’t just another marketing tactic – it’s a strategy that will elevate your role, align your entire organization, and pave the way for sustained profitability.

The Challenge: Resisting the Expansion Urge

When times are tough or growth goals are high, many companies try to do more by chasing new markets or customers. It seems like a good idea, but it can backfire. Spreading yourself too thin often means you can’t give your best to any one area, and you end up with poor results.

Picture this all-too-common scenario, as an example:

• The CEO is championing Healthcare, enamored by its large market size and big brand potential customers.

• The CFO is pushing for Financial Services, citing impressive market growth rates and weaker competitors.

• The CPO is advocating for Professional Services, noting the best fit with the product roadmap in meeting the needs of top accounts.

Each executive is right—but only from one or two dimensions. This is where you, as a marketing leader, armed with data and AI-driven customer and market insights, can guide the conversation towards a holistic, strategic view.

The AI-Powered Segmentation Process

Here’s how you can use the power of AI to drive strategic segmentation and alignment in your organization.

You can listen to me explain the process in this video (from 30:47-40:05) and/or read through the steps below, including conversations with ChatGPT. You’ll need ChatGPT Plus, Teams, or Enterprise for this use case and not the free version.

Given his work with many CMOs and Heads of Marketing, I asked Drew Neisser his thoughts on how CMOs are getting more value out of AI.

“Believe the hype. AI is rapidly changing every aspect of marketing. Savvy B2B CMOs are using AI as strategic sparring partners–to challenge their thinking, examine segmentation options, and inspire creativity. And yes, they use AI for more than creating pithier, more persuasive content faster.”

1. Marketing’s Important Prep Work

As a marketing leader, your role is to set the stage for strategic decision-making:

a) Set the Stage

• Articulate the need to transition from “growth at all costs” to “sustained profitability”

• Explain why narrowing the focus is critical in the current business climate

b) Use the Framework

• Identify key criteria for segment evaluation (e.g., market size, growth rate, competitive intensity, fit with product)

• Identify the segments you want to assess. The segments could be industry verticals, regions of the world, applications, or use cases. For the purposes of this example, we will use industry verticals.

Figure 1 below shows the screenshot of the output from ChatGPT only as a reference for the framework. The next steps discuss how to prompt ChatGPT to get the output.

c) Prepare and Protect Your Data

• Gather relevant data from various sources (market research, CRM, financial reports, etc.)

• Cleanse, curate, and structure the data for AI analysis. This is one of the hardest steps as data tends to be messy, coming from different sources in different formats and plagued with missing or inaccurate data. You’ll also need to remove, redact, and anonymize sensitive data prior to sharing it with AI.

Here are 10 strategies for protecting sensitive data when using AI.

While this can be challenging, several AI solutions now offer built-in data protection features. These range from private, on-premise systems to enterprise platforms with advanced security measures.

Always scrutinize the privacy safeguards of any AI tool you consider. Protecting your data maintains customer trust and preserves your competitive edge.

See Figure 2 to see an example of the types of inputs and sources for the various evaluation criteria.

d) AI-Assisted Analysis

• Leverage AI to analyze segments across all criteria

• Use AI for force ranking segments based on each criterion

The following screenshots in Figures 3, 4, and 5 depict the AI conversation (prompts and responses) to analyze the data for market size and growth evaluation criteria. Note that you can instruct ChatGPT to do the forced ranking and build the heat map.

You’ll need to repeat this process for each of the other criteria. Note that some criteria may require a qualitative rather than a quantitative assessment like fit with roadmap. In those cases, you’ll need to feed AI with the forced ranking based on your unique insights, experience, expertise, and data.

• Finally, instruct AI to output the full table, adding the forced rankings for each segment to determine the top ones. You can also vary the weights of the criteria to see how weights impact the results.

Reminder to always check AI’s work as we, as human, are ultimately responsible for the final outcomes and impact.

2. The Executive Debate

This is where the magic happens. Your role is to facilitate a productive discussion using AI-generated insights as a starting point:

a) Present AI Findings

• Share the AI-generated segment rankings and analysis

• Explain the methodology and criteria used

b) Facilitate Discussion

• Encourage executives to share their perspectives

• Use AI insights to challenge assumptions and broaden the conversation

c) Refine the Model

• Adjust rankings based on executive input

• Use AI to simulate different scenarios in real-time

For your convenience, you can use this custom GPT (Generative Pre-trained Transformer) called Business Prioritization Assistant. A GPT is an AI built to do a specific task. My team and I develop the custom GPT to help you more easily conduct what-if scenarios by changing forced rankings and weights to determine segment prioritization.

Russ McGuire, one of the best business and market strategists I know has conducted numerous executive strategy workshops using this framework. I couldn’t talk about this approach to segment prioritization without including some insights from him.

“Getting data on the page allows the team to focus on what’s real and not just talk past each other based on their favorites. It also keeps the discussion or debate from being dominated by the loudest or most powerful voice.” 

d) Build Consensus

• Guide the team towards alignment on top segments to validate (not pursue yet). There may not be agreement on every single debate but there needs to be consensus on the reasons why the team chose the specific top segments.

• Ensure all perspectives are heard and considered.

Remember, the goal here isn’t to let AI make the decision, but to use it as a tool to enhance human collaboration and strategic thinking.

3. Validation: The Reality Check

Now that you have alignment on potential top segments, it’s time to validate these choices in the real world:

• Market Pulse – Quick customer, partner, and stakeholder interviews, surveys, and research to validate assumptions for top segments.

• AI Analysis – Process validation data to highlight discrepancies between assumptions and feedback.

• Refinement – Adjust segment profiles based on findings, updating rankings if necessary.

4. The Final Decision

Armed with AI-driven insights and real-world validation, it’s time to make the final call:

• Executive Meeting – Present findings and facilitate discussion on data-driven insights, strategic fit, and capabilities.

• Consensus Building – Guide team to agree on top segments, ensuring understanding and support for the rationale.

• Action Plan – Develop strategy for chosen segments, including objectives, resources, timeline, and communication plan.

The Power of AI in Strategic Focus

Using AI to identify and align on top target segments is a game-changing strategy that benefits the entire organization. This is one of the most important and strategic initiatives that you and your marketing team can drive, leveraging both your market knowledge and AI to propel business success.

In the era of AI, focusing on a select few most valuable segments is crucial. AI allows you to personalize content and experiences at scale, helping you earn trust, better engage customers, and build loyalty within these key segments. This targeted approach, when everyone from the CEO to frontline employees aligns on it, gives the organization clear focus and purpose.

This alignment leads to:

• Precise goal-setting and resource allocation for key segments

• Focused competitive strategy and clearer decision-making

• Enhanced collaboration and execution across departments

The result is a culture of alignment where everyone works towards shared goals, improving both business performance and employee satisfaction. This AI-powered approach to segmentation drives better ROI by focusing efforts on the most promising areas, enabling sustained profitability in a competitive market.

In today’s AI era, success comes from strategic focus, not trying to do everything. When used responsibly, AI is an invaluable tool to guide this process, helping you navigate the path to sustained success.

How are you approaching segment selection? What challenges do you face? Share your insights as we explore this intersection of AI and strategic marketing together.

The Practical AI in Marketing newsletter is designed to share practical learnings and insights in using AI responsibly for go-to-market strategy, product, brand, demand, content, and digital, and growth marketing. Subscribe today and let’s learn together on this AI journey!

For those who prefer more interactive learning, explore our applied AI workshops, designed to inspire teams with real-life use cases tailored to specific marketing functions.

Also check out this team transformation case study and step-by playbook of how we helped transform a lean GTM team into a human-AI powerhouse with human and AI teammates.

Or, if audio-visual content is your style, here are virtual and in-person speaking events where I’ve covered a variety of AI topics. I’ve also keynoted at many organization and corporate-wide events. Whether through the newsletter, multimedia content, or in-person events, I hope to connect with you soon.