article | November 22, 2012
Putting Customer Segmentation To Work In The Field
Customer/prospect segmentation is a key first step in making wise allocation decisions. You might have the best propeller-heads available performing segmentation analysis. But if you can’t drive segmentation into the field you’re wasting much of your company’s expense and effort.
How it Begins
The word has come down – sales costs need to remain flat next year. But, of course, at the same time revenue needs to increase by 8%.
Sitting with the Regional Sales VP, the scowl returned to his face. “This region has – by far – the most growth potential. If anything, I should get additional resources. You don’t know what you’re talking about.” That’s the third time he’s said something along these lines in the past ½ hour. The meeting was just about over and there’s still little common ground.
The third of four regional stops to nail down 2013 budgets for the Sales EVP and the CFO. Each of the RVP’s has been saying the same thing. They alone have the most opportunity and need more headcount, not less. You sigh heavily as you think what a long week this has been.
Between A Rock & A Hard Place?
As a sales operations leader, how often have you had similar meetings? With tight budget allocations, the tug of war begins and you feel like the rope.
It’s a tight spot you’re in. How do you balance this all and make the right decisions for the organization? With all the data potentially at your disposal, it’s easy to get bogged down in the minutia.
At 30,000 feet, you need to have answers to some key questions locked and loaded. Otherwise, these budget meetings could be counterproductive.
Many marketing purists focus on the mechanics of segmentation work. Is the segmentation based on data that predicts revenue opportunity? Have all the right variables been run through a multi-regression model appropriately? Has the prospect data source been carefully selected to ensure reliable output? Data analysis and propeller-heads won’t deliver revenue. The sales team on the street delivers the revenue.
Operationalize Your Customer / Prospect Segmentation
It’s one thing to use the output from a segmentation effort to help decide on resource allocations. Put the talent where the money is. Good segmentation will enable you to determine which of the four RVP’s is right.
But you need to help them deliver the revenue. Good segmentation will also give you the following:
You have to deliver this data down to the sales rep level. Then you have to design a plan that reps, managers, directors all follow to maximize the up-side.
Make it Pay Off
Take the following steps with any segmentation work:
If you’d like to talk directly about operationalizing Customer Segmentation I’d like to hear from you. Keep the conversation going.
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