Customer Segmentation for Sales
Customer Attuned consultant Paul Cranston considers the value of Customer Segmentation for Sales Teams. This is the second in this series that explores how this new approach to segmentation benefits organisations. The first post looks at the Customer Segmentation Canvas’s value for marketers.
As you may already know, the B2B Customer Segmentation Canvas is a new approach to segmenting customers and prospective customers. Unlike other approaches, it uses the dimensions of a customer’s appetite and opportunity for a relationship and the level of relationship and trust. Check out the information on our Customer Segmentation Canvas page.
Customer Segmentation for Sales Teams
Customer Segmentation for sales is an often neglected opportunity. As I have written before, businesses too frequently leave money down the back of the metaphorical sofa by not understanding their customers. CRMs that are too complicated, too ignored, too ill-fitting to the business’s needs can hide good insights that can not just support sales teams, but help them flourish.
Use of the Customer Segmentation Canvas offers an approach to Segmentation that benefits sales teams:
1. Organise and Improve Sales to Existing Customers
Here is the initial challenge: to make the Customer Segmentation Canvas really work and improve sales to existing customers, you need to invest in understanding them. Why should one existing customer be positioned in Segment 1 and not Segment 3, or in Segment 2 and not Segment 4? The answer is about the opportunity and / or appetite that they have for a relationship with you.
If you only make blue and red widgets, and one specific customer only requires widgets that are blue there is no opportunity for additional sales. The void of opportunity or appetite for additional sales positions them in Segment 1. Sales team effort on the customer in Segment 1 is likely to be wasted; they do not want red widgets! Pushing them to buy red against their desires, could even result in negative sentiment.
However, the customer that just needs widgets, and lots of them regardless of colour, is more suited to Segment 3.
So, the sales team focuses on the customer in Segment 3.
To accurately place existing customers within the Customer Segmentation Canvas demands an understanding of your customer’s appetite for your offerings. You also need an understanding of your products and customers’ propensity to buy different products. Something that requires good category management.
2. Define Sales Strategies for New Customers
Having identified which Segments your customers reside in, you have at your disposal valuable information with which to profile your prospects. Profiles that help to define a strategy for targets.
Without any trust in the relationship, any prospect will be allocated to Segments 1, 3 and 5.
The company that is looking to plan for future growth might target customers that would sit in Segment 3; customers with plenty of opportunity for a relationship and sales. The Customer Journey would look at resourcing the right people to move the once acquired customer from Segment 3 to 4, and from Segment 4 to 6 to realise mutual value.
While it is tempting to consider profiling your Segment 3 customers and going after your customers’ competitors, a benefit to the Customer Segmentation Canvas is that it requires a variety of insights. This means that you have different information to target prospects – not by size, industry or location but by their attitudes and behaviours. So, instead of targeting your customers’ competitors, you could consider getting introductions to your customers’ partners.
Some companies do not think long term, favouring short-termism. So a company without a well-thought out strategy, might inadvertently target customers that would suit Segment 1. Low revenue and yes, low friction, but not the greatest long term strategy for growth!
3. Opens Doors to New Sales Opportunities
The very process of working to understand your customer better, opens doors for sales teams. Effectively segmenting your customers by behaviours creates valuable insights for solution-based selling. For example, knowing the problems that your products and services solve, not just at a superficial level, but deep down (as explored by Toyota’s ‘5 Whys’ approach) equips sales teams with insights to build better future sales.
Understanding the attitudes of customers builds an arsenal of ambassadors that are willing to support your promotions. This can be either with case studies, testimonials but also with introductions. Some will be willing to collaborate at industry events. Imagine, just one introduction to a customer’s partner could open to the door to an entirely new sector.
We believe that this new approach to segmentation offered by the Customer Segmentation Canvas supports the demands of sales teams. Check out the canvas and its resources for yourself. If you need help segmenting at scale or implementing it within your CRM for systematic segmentation, please get in touch.
Download the workbook and blank canvas and the segmentation cheat-sheet by clicking on the icons below:
- The 6 Segments of Customer Segmentation - December 4, 2024
- How to use the Customer Segmentation Canvas - December 4, 2024
- Introduction to B2B Customer Segmentation Canvas - November 27, 2024
