Expanding into New Segments: What Assumptions Hold / Which Don’t
When your company expands into a new segment, whether through strategic planning or executive mandate, the product marketing team inherits the challenge of making it work. The key question isn’t whether the segment is worth pursuing, but rather: what from your existing approach still applies, and what needs to change? This post offers guidance for product marketers on evaluating new segments and setting realistic expectations for growth segments.
How New Is the New Market?
All companies, especially public and PE-backed technology companies, face pressure to grow. The need for growth often leads companies to enter new verticals or to seek new buyer types within existing verticals. These new segments can be adjacent to the core market or several concentric circles away.
The degree of newness matters. In the best cases, the new segment shares many characteristics with the existing one. Moving upstream or downstream is the best example of this. The product addresses similar core functions (e.g., processing transactions, compliance, analytics). The difference is in scale, sophistication, budget, and sometimes risk tolerance.
In these upstream/downstream scenarios, the challenge becomes determining the right-sized solution package: how to create the “lite” version when moving downstream, or how to deliver the higher level of service, integration, and market credibility required when moving upstream.
In other situations, the segment may fall under the same vertical umbrella, e.g., banking and insurance, but the buying motions of each segment can diverge sharply. The shared vertical can mask fundamental differences in how buyers evaluate solutions, what they consider credible proof, and what drives urgency.
Revisiting ICPs, Personas, and Pricing
The product marketing team needs to figure out what still applies and what needs to be adjusted for the new segment. Product marketing teams have ICPs, personas, pricing strategies, and an understanding of why the product wins customers in their core segments.
In the ideal world, the needs, perceptions, and behaviors of the are segment are “close enough” to the core segment(s) that the product marketing team can apply the same strategies and simply tune messaging and packaging.
In reality, these may or may not be relevant to the new segment, and the risk is assuming too much transferability. Even subtle variations in key market dimensions can lead to pronounced differences in interest and adoption.
Using their understanding of existing segments as a starting point, product marketers can identify where the new segment overlaps with the core market and where it diverges in areas such as:
- Current processes and tools used today
- Pain point alignment: whether the pain points your solution solves are recognized and prioritized, or trigger urgency
- Value criteria: how buyers in the new segment frame success and value
- Proof point requirements: case studies, benchmarks, references, etc.
- Competitive landscape: what do buyers view as viable alternatives and credible solutions
- Pricing: Willingness to pay and preferred pricing models (seats, volume, outcomes, etc.)
In the simplest sense, it is the process of reviewing existing ICPs, personas, etc., with an explicit what still holds vs. what breaks lens.
The level of investigation needed (and conducted) depends on resources, how “new” the segment feels, and the magnitude of expectations. Does senior management view it as an interesting opportunity to test, or as a high-growth segment, and what is the risk if it falls short of expectations?
How much to invest in determining what still holds vs. what breaks also depends on how far the new segment sits from your core market and the stakes. For adjacent segments with modest revenue expectations, customer interviews and a deep dive into internal data (e.g., the CRM, Gong) may provide sufficient insight. For more distant segments or larger commitments, prospect interviews and quantitative surveys become essential. Existing customer behavior won’t reliably predict how prospects in a truly new segment will respond.
Setting Realistic Expectations
Beyond positioning the solution for success, systematically profiling the new segment has an additional benefit for product marketing and sales teams: it helps to measure what success will reasonably look like in year one.
The push to enter new markets is often driven by high-level signals of opportunity rather than by detailed exploration of the opportunity’s nature and scope. The perceived potential seen by the board, PE firm, or other stakeholders focused on financial growth can set unrealistic expectations for the product marketing and sales teams, who are under pressure to message and sell the opportunity into existence. In other cases, the opportunity may be large but will require years of effort to realize due to accessibility challenges, such as building channel partnerships or securing credible reference accounts.
Developing/confirming sector-specific ICPs, personas, journeys, etc., can help product marketers/sales make an evidence-based case for realistic growth targets.
In many expansion efforts, the biggest risk isn’t entering the wrong market—it’s misjudging what success will look like. Product marketers who invest early in understanding the new segment—rather than assuming transferability from existing markets—are better positioned to set realistic expectations and build the credibility needed to execute over the long term.
If you’d like to read more about Isurus’ perspectives on segmentation and TAM research, check out these related posts:
Segmentation with purpose: Aligning objectives with market insights — Guidance on designing segmentation schemes that support real decisions rather than theoretical precision.
Six Dimensions for Assessing a Market Opportunity — A practical approach to evaluating buyer reality, feasibility, and constraints before committing to a new market or product.
If you’d like to talk about a pricing challenge you are facing, you can reach us via our contact page: https://isurusmrc.com/contact