Improve Your Ability to Segment Customers

Segment customers, both by size and by need, to identify your targets. You increase your sales by selling more products to your current customers and by finding new customers. But, not all customers are equally valuable to you. Your best customers are the core of your business. The purchases these Core customers make from you provide a good profit. Other customers are less valuable to you than the Core customers. Some will purchase products from you, but at low prices. Or, they will be costly for you to serve because they require a lot of service but buy little from you. Others will not buy from you at all. The time and resources you spend on them are wasted.

The segmentation activity on the Basic Strategy Guide identifies your Core customers and creates new segments of these Core customers according to their needs.

This Segmentation Activity covers the first eleven steps of the Basic Strategy Guide.

Step 1
: Define the products, competitors and customers of the business.

Step 2
: Segment all the industry's customers by size.

Step 3
: Understand the purpose of multiple roles in customer relationships

Step 4
: Place the total industry purchase volume on a Customer Size/Supplier Role matrix.

Step 5
: Estimate the average volume by position on the Size/Role matrix.

Step 6
: Find the annual amount and location of the industry's positive volatility.

Step 7
: Determine whether "Wins" or "Failures" account for the majority of the industry's positive volatility.

Step 8
: Find the Company's strengths and weaknesses on the Size/Role matrix.

Step 9
: Separate the sources of the Company's change in share.

Step 10
: Compare the Company to the industry on the components of volatility.

Step 11
: Classify and assign company objectives to each current and potential customer.

Return to Improve Your Ability to Segment Customers

Subscribe Now

Subscribers Start Here