Key Takeaways
- In today’s uncertain economic climate, CMOs face the challenge of stretching limited marketing budgets while aligning sales and product teams around the right priorities.
- The Relative Targeting Framework helps organizations identify where they can win, not just where they want to compete, by evaluating market opportunities against internal readiness.
- Every product-market opportunity falls into one of four categories: Active, Nurture, Dormant / Internal Gaps, or Dormant / Off the Radar.
- Change Healthcare allocated approximately two-thirds of its marketing budget to Active segments and the remaining one-third to Nurture opportunities.
- This framework minimizes internal friction by aligning marketing, sales, and product around a shared, defensible framework.
- Done right, structured targeting improves sales alignment, strengthens product collaboration, and helps marketing play a more strategic, respected role in corporate planning.
In today’s uncertain economic climate, CMOs face a daunting challenge: how to stretch limited marketing budgets while aligning sales and product teams around the right priorities. It’s no longer enough to simply ask for more spend. You have to justify every dollar and demonstrate tangible returns.
The solution? A disciplined, data-driven approach to targeting and investment, one that starts with honest conversations across the organization.
The Case for Strategic Targeting: A Lesson from Change Healthcare
Consider the example of Change Healthcare, a leading healthcare technology firm navigating a complex merger and preparing for an IPO. With pressure mounting from every direction, the company needed a clear, defensible strategy for allocating marketing resources.
Their answer was the Relative Targeting Framework, a method for evaluating market opportunities against internal readiness. In essence, it helped the organization identify where it could win, not just where it wanted to compete.
Four Target Categories to Guide Investment
Through cross-functional alignment meetings, Change Healthcare’s marketing team categorized each product-market opportunity into one of four groups:
- Active: The internal team and the external market are both ready. Full go-to-market motion is greenlit.
- Nurture: Internal readiness is strong, but external conditions (e.g. buyer maturity, regulatory timing) still need to catch up.
- Dormant / Internal Gaps: The market shows promise, but internal capability gaps (product maturity, messaging, enablement) hold it back.
- Dormant / Off the Radar: Neither internal nor external conditions are favorable. These areas are deprioritized.
Armed with this segmentation, Change Healthcare allocated approximately two-thirds of its marketing budget to Active segments, while the remaining third supported Nurture opportunities. Sales efforts tied to Dormant targets were deprioritized, with a clear rationale: focus on where you can create real, near-term impact.
As Kevin Brooks of Change Healthcare explained:
“This data-driven approach refined our investment focus and amped up our ROI confidence.”
Kevin Brooks, Change Healthcare
It also minimized internal friction by aligning departments around a shared, defensible framework.
Building Your Own Targeting Playbook
For CMOs looking to apply a similar approach, here is a simplified roadmap:
1. Assess Your Current Alignment
Start by understanding where marketing, sales, and product currently stand. What segments are each group prioritizing? Where are the disconnects?
2. Unify Around a Consistent Evaluation Process
Use structured criteria to evaluate both external market attractiveness and internal readiness. This could include market size, competitive landscape, internal capabilities, sales enablement readiness, and more.
3. Categorize Your Targets
Place each opportunity into one of the four segments: Active, Nurture, Dormant / Internal Gaps, or Dormant / Off the Radar. Be transparent and collaborative in these discussions, especially with sales and product leadership.
4. Fill Internal Gaps
For segments with strong market potential but internal roadblocks, invest in enablement. This could mean product enhancements, better training, clearer positioning, or improved content. Use this process to shape your roadmap.
5. Revisit and Reassess
Your markets, products, and teams will evolve. Make this targeting framework a recurring part of your annual planning cycle.
A Smarter Path Forward
When done right, this kind of structured targeting process does more than optimize budget. It improves sales alignment, strengthens product collaboration, and helps marketing play a more strategic, respected role in corporate planning.
In a world where every marketing dollar counts, this approach allows CMOs to invest with confidence, and to silence the noise that too often surrounds budget allocation.
Want to apply this to your own business? Book a 15-minute strategy call with Alan, or learn more about CMO coaching with Demand Revenue.
Frequently Asked Questions
What is the Relative Targeting Framework?
The Relative Targeting Framework is a method for evaluating market opportunities against internal readiness. It helps organizations identify where they can win, not just where they want to compete.
What are the four target categories in the Relative Targeting Framework?
Active (internal team and external market are both ready; full go-to-market motion is greenlit), Nurture (internal readiness is strong but external conditions still need to catch up), Dormant / Internal Gaps (the market shows promise but internal capability gaps hold it back), and Dormant / Off the Radar (neither internal nor external conditions are favorable).
How much marketing budget should go to each category?
At Change Healthcare, approximately two-thirds of the marketing budget went to Active segments, while the remaining third supported Nurture opportunities. Sales efforts tied to Dormant targets were deprioritized, with a clear rationale: focus on where you can create real, near-term impact.
How does the Relative Targeting Framework reduce internal friction?
It minimizes internal friction by aligning marketing, sales, and product around a shared, defensible framework, rather than by opinion-based debate.
How do I start applying this framework at my company?
Start by understanding where marketing, sales, and product currently stand and where the disconnects are. Then use structured criteria to evaluate both external market attractiveness and internal readiness. Categorize each opportunity, invest in closing internal gaps where market potential is strong, and revisit the framework as part of your annual planning cycle.
