Challenge
Aligning commercial strategy with market opportunity
A digital health provider sought insights into refining and enhancing their strategy to meet market standards. Although the company had previously developed an internal market sizing model, the current design still required external validation and additional enhancements.
The company aimed to increase their chemical engineering (CE) market by 4%, identify the top 300 profitable accounts and increase focus on 400 key health networks. However, there were four primary challenges that hindered these goals:
Identifying target groups and revenue
Estimating the total addressable market (TAM) size for CE
Developing a dynamic, decision-supporting tool
Aligning segmentation with go-to-market (GTM) strategy
With Alexander Group’s expertise in GTM strategy, machine learning capabilities and proven ability to translate data into actionable insights, the company partnered with us in creating a dynamic, scalable approach to market modeling and segmentation.
Solution
Powering segmentation and GTM alignment with machine learning
Alexander Group first conducted stakeholder interviews to align goals and validate assumptions. From there, our team began assessing internal and external data to gain a deeper understanding of growth opportunities and areas for improvement. By utilizing machine learning, our team was able to:
Visualize the market size’s total addressable market (TAM) and send potential at the account/product level
Determine breakpoints and segment disruption through applying firmographic and opportunity-based segmentation
Delve into current go-to-market strategy results by benchmarking revenue group, documenting commercial model components and identifying optimization levels
This full analysis revealed significant opportunities in TAM expansion, for-profit market expansion and growth headroom.
To begin making shifts, our team developed and delivered a dynamic Excel model with what-if analysis capabilities, created segmentation and disruption outputs with dynamic control and prioritized Core and Large systems based on potential and strategic fit.
Alexander Group also recommended incorporating four additional financial variables—program service expense percentage, cash on hand, net income margin and long-term liabilities—into the current model. An opportunity scorecard was developed to prioritize accounts, and adjustments to the GTM model were proposed to improve efficiency and win rates.
With these recommendations, the client would be able to grow their TAM and uncover significant financial growth opportunities.
Impact
Total addressable market (TAM) expansion, strategic prioritization and scalable planning
The improved model, which incorporated the four proposed financial variables, will support 19% more variability and significantly enhanced accuracy.
The refined model is projected to increase the Target Zone Clinical Engineering TAM by 4% and add $1.2B in opportunity through the reclassification of seven IDNs into a higher-value segment. Long-term, the model will add $1.6B in incremental TAM from for-profit hospitals added, with 304 accounts showing strong strategic potential. The redesigned model will have a projected final Target Zone TAM reaching $12.9B, and a total of 395 IDNs were prioritized across three tiers based on TAM size.
Ultimately, the redesigned model will have a projected final Target Zone TAM reaching $12.9B.
The client also extended the project by three weeks to incorporate account-level propensity modeling, which led to the creation of a targeting matrix that combined product opportunity with likelihood of buying. This additional time allowed for more precise customer prioritization and laid the foundation for a repeatable annual planning process.
Ready to Drive Growth with Machine Learning?
Contact Alexander Group today to begin modernizing segmentation, sharpening GTM strategy and uncovering new opportunity areas.
About Alexander Group
Alexander Group understands your revenue growth challenges. Since 1985, we’ve served more than 3,000 companies across the globe. This experience gives us not only a highly sophisticated set of best practices to grow revenue—we also have a rich repository of unique industry data that informs all our recommendations. Aligning product, marketing, operations and finance efforts behind a successful sales organization takes insight and hard work. We help the world’s leading organizations build the right revenue vision, transform their organizations and deliver results.
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