Customer Segmentation

You are wondering what you can do so your team won’t leave new customer acquisition up to chance? And how you can manage all customers to their needs? Find out more about how customer segmentation helps you with these challenges.

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Customer segmentation: What good does my knowledge of the customer do?

One thing is clear in B2B sales: not all customers are the same. There are some top customers. You cover 80% of your sales with them. At the other end of the scale are the small customers. These are usually many customers with relatively low individual sales. And there are the customers in between.

Your sales staff likes the top customers particularly much. They would prefer to acquire only such customers. Small customers, in contrast, are often a challenge for your team: their management is time-consuming. But the lower returns seemingly do not make the high effort worth it. Except: how do your employees identify these customer groups and delineate them correctly from each other? This is precisely where customer segmentation comes into play...

IT ALSO APPLIES TO CUSTOMER SEGMENTATION:

PRESCISION IS THE BE-ALL AND END-ALL

How does customer segmentation help me in B2B sales?

Customer segmentation is the ace up your sleeve. This is because who analyses and knows his customers well cannot only find further top customers with the gained insights but also manage his existing customers in the ideal way. The solid knowledge about your customer is the starting basis for your success in B2B sales.

No longer poking in the dark in new customer acquisition

To be able to segment our customers, you need to deal with them intensely. You find out which requirements, needs, preferences and characteristics your customers have. This valuable knowledge helps you with new customer acquisition: it enables you to address your target customers personally and specifically.

One step ahead of your competition

At the same time, you will secure competitive advantages in B2B sales: while your competition is still poking in the dark or is searching for potential customers like “needles in the haystack,” you know exactly where you have to start. This way, you will specifically acquire top customers and expand your existing customer base.

Making existing customers happy

Customer segmentation is also the basis for developing the matching strategy for each customer segment and for using your resources in the best possible way. It would not be efficient after all to manage each customer segment with the same effort. This is an advantage for your company. And what is more, your customers also profit: because you analyse the requirements and needs of your existing customers in detail and can respond to them even more specifically in the future.

Your customer will notice: you are taking an interest in him and his individual situation, and you offer the best possible benefit for him this way. Sounds good? Well, it is.

How do I proceed for customer segmentation?

For customer segmentation, you divide your existing customers into homogenous groups that can be handled better and more efficiently. In the process, select particularly attractive segments and determine the customer groups for which it is worthwhile to employ more effort, e.g. for key accounts or where you are planning only a lean cooperation, e.g. for small customers.

Ask yourself the following questions for the segmentation of your B2B customers:

Who are my existing customers?
With which customers do I earn the most?
For which customers do my solutions render the greatest added value?
What about my customers do I already know today?
Which further information is helpful and how do I get it?

Which characteristics should I query for the customer segmentation?

Geographical information
Where are my customers located? Are there regional differences, for example, in the economic structure?
Market data from the environment of your B2B customer
Cyclical situation, industry and industry development, which influences are there, e.g. in terms of legislation, subsidies, etc.? How is the industry organised? Are there associations or chambers, for example?
Individual customer data
1. Business size and sales revenues and number of employees, e.g. from the Federal Gazette, Echobot
2. Industry and industry development, e.g. via statista, industry associations
3. Business phase
4. Start-up or corporation: growing or shrinking?
5. Who do your customers supply?
6. Special requirements, e.g. for automotive suppliers:
  
  national/international?
7. What is the company’s legal form?
8. Which technologies are used by your customers? For example, do they use the marketing agencies Macs of Apple, do they use distance seller EDI systems or which tools do carpenters use?
9. What is the customer’s organisation – centralised or decentralised?
Information channels, decision-making behaviour and decision-making channels
1. Number of members of the “buying centre” from 1 decision-maker with freelancers up to committees of 5 to 10 people in purchasing, the management, the operational department and lawyers
2. Which points of contact do I have with the customer? For example, trade fairs, website, social media, service
3. Where and how do my customers get information?

info-i-suxxeed-blau Practical tip: Customer segmentation is a living process!
Start pragmatically with your team. Let your sales staff refine your analysis and findings later on. Make it a habit of optimising it time and again. You will see: the more frequently you pass through these cycles, the better the result for your B2B sales organisation.

Customer segmentation: better one or multi-dimensional?

We differentiate between two kinds of customer segmentation: one-dimensional and multi-dimensional.

One-dimensional customer segmentation

In the one-dimensional segmentation, you differentiate the customers by only one criterion, e.g. sales or the contribution margin. This is the classical ABC analysis. Or you segment them according to the purchasing behaviour so far: how often has the customer made a purchase? Has he purchased one or more products? The chosen criterion most frequently reflects data from the past. This consideration already offers you a tremendous increase of transparency for your customer base in many cases.

Multi-dimensional customer segmentation

In the multi-dimensional segmentation, you combine multiple criteria to form homogenous segments. Taking a look back is ideally complemented by the look ahead: you also use the future potential of the customer as a criterion. This way, you will change the perspective: from the past to the future.

The calculation of the customer lifetime value is one example of this approach. Even if the multi-dimensional segmentation is more complex, it is worth it. Especially because many companies are still concentrating exclusively on data from the past in the customer segmentation, you can obtain a competitive advantage by taking a look at the future.

Road sign two directions of customer segmentation

I now know my customer segments. What now?

The result of your customer segmentation is an overview of your B2B customer segments. Based on these insights, you can now develop a “game plan” with your team. You will define in it how you want to approach each of these segments. What do your key account managers want to do exactly? How do you want to have your C-customers managed? Revise this game plan regularly, too. Measure your success of the approaches in each customer segment and adjust the setting screws.

Bottom line: customer segmentation is your view through the telescope

By means of the analysis and division of your existing customers into homogenous segments, you receive valuable knowledge about your customers in B2B sales. Instead of poking in the dark, this knowledge from customer segmentation offers tremendous potentials to you for acquiring new customers and setting an optimal strategy for your existing customers.

The second big winner is your customer. Because you are taking an interest in him and his individual needs, you can offer the best possible benefit for him. Understand customer segmentation in B2B sales always as a living process: start pragmatically and continuously optimise it. Your target-oriented approach will soon be reflected in your results.