Recently, over 300 individuals were surveyed and asked to define sales enablement. Over half responded that sales enablement consists of developing sales productivity materials. That’s part of it and there are many tools you can use to increase sales productivity. Account segmentation is likely one of the most important. It’s difficult to grow revenue faster than your industry’s growth rate and faster than your competitors. Leverage the How to Make Your Number in 2018 to access a revenue growth methodology to hit your number quarter after quarter, and year after year.
Sales Enablement leaders are asked many questions by salespeople. The most important are related to making their number.
- What accounts do I call?
- Where are the best opportunities?
- What accounts should I contact first?
- How can I improve my results?
Do you have good answers? Regardless of your situation, this blog will help you answer all of them. And, help you demonstrate the value of enablement to internal stakeholders.
What is Account Segmentation?
Your first step is to download the Account Segmentation Tool. It identifies the 19 key components of account segmentation. Use it to educate your salespeople. Use it to strengthen your alignment to marketing, finance or your analytics team. Learn the methodology used to create the company segmentation plan. Then build it into your learning curriculum.
You don’t need to become an expert in the analysis. But you should understand the benefits and how the process works. The more you know, the better you can prepare sales to use segmentation. Increasing their odds of making the number.
Why is this important? Not all accounts are created equally. Some will spend a little, and others will spend a lot. Some will spend this year, and others will spend next year. Some will respond well to your value proposition and others will respond well to your competitor’s value proposition. If you cannot rank accounts best to worst on revenue potential and propensity to buy, you will miss the number.
Why Segment Markets?
Customers are different. Some are small, while others are large. Some are driven by price, while others want the best service. Some want breadth of services, while others want a targeted offering. Some are early adopters, while others prefer battle-tested solutions. In the end, segmentation helps salespeople meet the needs of a diverse customer base.
Segmentation also helps create Ideal Customer Profiles or ICPs. These are target accounts with the greatest spend potential at the lowest acquisition cost. Accounts are scored and prioritized using a flexible formula. The formula applies to current customers, opportunities, and prospects. Sales Reps are then better able to prioritize up-sell, cross-sell, and new acquisition activities.
Other departments are favorably impacted as well. For instance, Sales Operations can optimize your territory design, compensation plans, and quotas. Marketing will more effectively deliver content targeted to these high value customers and prospects. Product development can more accurately determine who to target with products and services. Alignment and collaboration drive stakeholder visibility.
How to Segment Markets
The best segmentation plans use three categories: profile, behavior, and needs. They are often blended together to effectively target customers and prospects. Understanding who they are, what they do, and their needs are important. This helps salespeople satisfy a diverse customer base. Ultimately this approach translates into:
- Larger deals
- Faster sales
- Better win rates
Below is an explanation of each category.
- Profile – Segmentation based on how the customer is.
- Behavior – Segmentation determined by what the customer does.
- Needs – Segmentation centered on customer needs.
What is the Process?
There is a five step segmentation process that you can use to educate salespeople. Once they grasp it, they’ll begin to comprehend its importance.
1. Review current customer data – collect data on current customers (spend, size, industry, employee count, products purchased, etc.).
2. Conduct expert panel and market research – select successful sales people to capture best practices. Research the marketplace to validate findings and uncover new opportunities.
3. Complete data analysis and modeling – collect additional information, including: Suspect list, Opportunity list, and third-party data. Collaborate with database owners to eliminate unreliable information. Match existing customer database with firmographic information to fill the gaps.
4. Determine propensity-to-buy factors and define the Ideal Customer Profile – rank the top 4 factors most important in identifying a potential customer. Convene expert panel to assign weights to the top factors according to relative importance. Calculate potential spend for each customer segment.
5. Calculate potential and score prospects across factors – quantify the sell-to-market. Then determine potential per segment and prioritize target markets. Implement business rule for sales coverage.
An effective Account Segmentation process delivers:
- A prioritized list of current customers and prospects
- Potential spend figures for all customer types
- An Ideal Customer Profile
- A completely analyzed customer master database
This allows you to help sales with bigger deals and improved win rates.
Do you remember the questions at the beginning of this blog? Account segmentation provides answers to them all. It also increases your value to sales leadership by improving your sales enablement impact. It’s time to realize the benefits of segmented customers and prospects. This will help your salespeople make their number. Download the Account Segmentation Tool to ensure your success.
Have expectations gone up and left you wondering if you can make your number? Here is an interactive tool that will help you understand if you have a chance at success. Take the Revenue Growth Diagnostic test and rate yourself against SBI’s sales and marketing strategy to find out if:
- Your revenue goal is realistic
- You will earn your bonus
- You will keep your job