All of us who have had some exposure to Marketing or Sales “101” have had the concept of customer segmentation drummed into us. As I walk the halls of corporate Australia these days I commonly hear Heads of Sales and Marketing talking about their new “Go to Market”, “Channel Strategy”, “Customer Segmentation” pursuits. Too often, when I walk down the same corridors months later the buzzwords have faded and there is negligible beneficial legacy following the rhetoric.

Beyond the glamour terms, is a bunch of hard work that often ends up in the too hard basket. Truth is, there is usually real merit in executing these types of initiatives. The devil is in the detail…….of implementation.

10 golden rules that studies of more than 50 sales and marketing oriented corporates, over 20 years, across 15 or so industries and sectors have taught us at The Next Level………….

  • Ensure that the parameters you use for segmentation of your customer base are mathematically, and scientifically defensible………..relegate subjective input to the back end of the process not the front end
  • Adequately cover the fundamental concepts of current value (what is this customer actually worth to your business today) and potential value (what is the total value of the customer in the class of goods or services in which your business competes) in your segmentation model
  • When you create the segment lines of delineation, be clear on why and what the segments will mean and be used for
  • Develop your segmentation model in such a way as to facilitate parallel tiered account management programs
  • Use the mathematical basis of your segmentation to syphon off the lower end segment to be managed by your internal sales team
  • Savagely question which activities can only be executed with the customer by your high cost mobile sales force resource during face to face site visits……..relegate all other activities to your lower cost internal sales department
  • Scrutinise your lower end customer segment in terms of the degree to which you really want to do business with them………..make the rules of engagement such that they do business with you in a way that is more profitable than it is currently
  • Ensure your high value customers are put on to better programs than your lower value customers. Build “gold”, “silver” and “bronze” level account management programs………….and then train, measure and incentivise your sales force to deliver
  • Where you control the desired customer behaviour (eg minimum order quantities) – build the behavioural factors into your tiered service offering. Where the customer controls the behaviour (eg payment timeliness) – build the behavioural factors into your trading terms and conditions incentives (eg scalable rebates)
  • Build trading terms and conditions incentives for the upper end segment to do business with you in a way that is mutually beneficial………….and provides a powerful partnering role for your mobile sales team to administer

All sounds easy, huh? We would be delighted to offer you a no-obligation meeting to discuss how you might implement such a sales and service direction.

Contact us at The Next Level by calling 03 9012 7378, email