The Death of Industry Classifications: Why Business Models Are the Future of Targeting
Let’s get straight to the point: industry classifications are broken.
They were built for a world where simplicity ruled, where businesses fit neatly into predefined boxes labeled “Software Development,” “Food and Beverage,” or “Manufacturing.” But here’s the problem: in today’s hyper-complex, nuanced economy, these labels are about as useful as a paper map in the era of Google Maps.
What sales and marketing teams should care about isn’t the NAICS code or LinkedIn industry tag. What they should care about—what actually drives results—is the business model of their target audience.
Why Industry Classifications Are Failing You
Think about it: does knowing a company is categorized as “Food and Beverage” help you understand how to sell to them? Not really. It’s a vague, catch-all bucket that ignores the nuances that matter.
Take restaurants, for example. Are they:
- Fine dining or casual eats?
- A franchise chain or an independent location?
- Operating 10 locations or just one?
- Using delivery apps like UberEats, or are they strictly in-house?
The traditional classification of “Food and Beverage” doesn’t answer any of these questions. And yet, these are the precise insights your sales and marketing teams need to craft messaging that resonates, run campaigns that convert, and build relationships that last.
It’s not just restaurants. Consider HVAC companies. Does it matter if there are 10,000 HVAC companies in the US? Not really. What matters is:
- How many advertise on Google?
- How many have instant quote forms on their websites?
- How many are running active social media campaigns?
The difference between knowing their category and understanding their business model is the difference between generic outreach and precision targeting.
The Power of Business Models
Understanding a company’s business model means you’re diving into how they:
- Sell: Do they focus on B2B, B2C, or a mix of both?
- Operate: Are they e-commerce-first? Subscription-based? Marketplace-driven?
- Scale: Are they hyper-local or global? Franchise or independent?
- Reach Customers: Are they leveraging paid media? SEO? Delivery apps?
This is the information that provides clarity. This is the level of sophistication you need to truly understand their problems—and position your solution as the answer.
Why Traditional Databases Fall Short
Most traditional data providers are stuck in the past, offering static, surface-level classifications. They can tell you how many “Software Development” firms exist, but they can’t tell you if those firms sell SaaS or on-premise software, if they target startups or enterprises, or if they rely on outbound sales versus self-service models.
Here’s the truth: traditional databases lack the depth and sophistication required for modern GTM functions.
This is why tools that leverage keywords, LLMs (large language models), and advanced tagging are the future. Instead of asking, “How many HVAC companies exist?” you can ask, “How many HVAC companies are advertising on Google, and how many offer live chat on their website?”
That’s the kind of actionable insight that drives revenue.
What You’re Leaving on the Table
The next time you run a TAM analysis or pull a list from LinkedIn using vanilla industry classifications, ask yourself:
- What am I missing?
- How many opportunities am I leaving on the table because I didn’t go deeper?
- What insights would transform this list from “a bunch of names” into a true pipeline driver?
Your buyers don’t think of themselves as “Food and Beverage” or “Software Development” companies. They think of themselves as businesses with unique challenges, customers, and goals. If you don’t understand their business model, you’re not speaking their language.
The Future is Here
The future of targeting isn’t about slapping a generic label on a business. It’s about understanding their DNA—how they work, what they sell, and who they sell to. That’s the insight that transforms your go-to-market strategy from mediocre to unstoppable.
Let’s stop settling for what’s easy. Let’s start demanding the insights that actually matter. The tools exist. The data is there. All that’s left is to use it.
So, what are you waiting for? It’s time to ditch the classifications and start digging into what really matters: their business model.
