KEI&S

M45GrowCustomers & Sales· Module 1

Customer Segmentation

The business sells to everyone the same way. Marketing is generic, and the best customers get no special attention.

  • Start
  • Grow
  • Customers
  • Strategy
  • ~5 min · Worksheet

The business problem

Treating all customers the same wastes effort. Some customers value speed, others price, others advice. Some are highly profitable; some cost more than they pay. Without segmentation, the business cannot focus its offer, sales effort or service levels.

Why it matters

Segmentation is how a business decides who to serve, what to offer each group and where to invest in growth. It turns a crowd of customers into a strategy.

What you will learn

  1. Segment customers by needs and value, not only demographics
  2. Describe what each segment buys and why
  3. Estimate size and profitability of each segment
  4. Choose priority segments

Core questions

  1. What distinct groups of customers do we serve?
  2. What does each group value most?
  3. Which segments are most profitable and growing?
  4. Which segments should we stop pursuing?

Work through the module

CaseWhat is happening?

Paint manufacturer, 50 people · Illustrative teaching case

A paint manufacturer sells through hardware shops, contractors and property developers with a single price list and a single sales team. Segmenting shows contractors value colour consistency and delivery, developers value credit and volume pricing, and shops value display support. The manufacturer designs a distinct offer for each.

DecisionWhat does the leader need to decide?

Keep one offer for all, or design different offers for priority segments?

FrameworkHow should they think about the problem?

Needs-based segmentation

Group customers by what they need and how they buy, then by their value to the business. A good segment is distinct, reachable, large enough to matter and profitable to serve.

ToolWhat can they use?

Segment profileWorksheet

  1. Segment name and description
  2. Primary need and buying criteria
  3. Size, revenue and margin
  4. How they buy and who decides
  5. Priority: grow, maintain or reduce
ApplicationHow does it apply to their business?

Apply it to your own business:

  1. Sort your top 50 customers into groups by need
  2. Complete a profile for each group
  3. Choose one or two priority segments
ImplementationWhat changes?

What should change in the business:

  1. Tailor offer, messaging and service to priority segments
  2. Tag customers by segment in your CRM or sales records
  3. Report revenue and margin by segment
ReviewDid it work?

How to tell whether the change worked:

  1. Is growth coming from priority segments?
  2. Has margin improved in targeted segments?
  3. Is sales effort aligned to priorities?

After this module you should be able to decide

Keep one offer for all, or design different offers for priority segments?

And leave with: Three to five customer segments with distinct needs and value.

Sequence · Customers & Sales

  1. Customer Segmentation
  2. Customer Profitability
  3. Sales Architecture
  4. Pipeline Management
  5. Customer Retention
  6. Pricing

Next step

Start with what is actually happening.

Tell us what is happening in your business. We will help identify the appropriate next step.

Start With Your ProblemTake the Business Diagnostic
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