Do You Know Exactly Who Your Customers Are?
One of the biggest challenges in marketing and sales is knowing EXACTLY who your core customers are. If someone asked you today “who are your customers?” and you say “people who buy my product”, you’re in trouble. This answer means that you’re selling to whomever stumbles across you in the marketplace and you’re not being strategic. The only way you are going to scale your business is by working way too hard and relying on luck.
If you want to scale your business, you need to have an effective Customer Acquisition Strategy. Who are your customers? How do you tell a customer from a non-customer? Where do you find them? What are they most interested in buying? What pushes them into making a buying decision? A good Customer Acquisition Strategy will answer these questions and more.
At this point, you might be thinking “what makes an effective Customer Acquisition Strategy?” You need good, solid data on the customers you already have or insight into the customers you want to sell to. You may have a Customer Relationship Management (CRM) solution like Salesforce.com, but the quality of the data in your system varies wildly based on who inputs it and the last time you analyzed your customer data.
Don’t feel bad if you don’t have this information. Many businesses do not have adequate customer data and have not done significant market research on their customers. If you don’t have solid customer insights, you’re going to need to do Customer Segmentation research.
In a nutshell, Customer Segmentation is when you break all of your potential customers into categories that define who they are, how they buy and how to reach them.
For example, if you have a company that sells screws and other types of fasteners, your total addressable market is everyone who needs screws and fasteners. As you can well imagine, you would treat a $500 million company that builds townhouse complexes differently from the suburban homeowner who buys 25 screws a year.
The townhouse builders would probably fall into a segment defined by the volume of fasteners they buy (probably in bulk, by weight) and the fact that you ship directly to job sites instead of having them come to a retail location to buy them. Let’s call this segment “Industrial” and the suburban homeowner would probably fall into a segment called “Retail” where their buying behaviour is defined by the fact that they buy at national hardware chains.
This kind of information can be used to:
– Differentiate customers from one another (eg. Enterprise vs. non-enterprise)
– Determine the best marketing channels to reach specific types of customers
– Determine who NOT to sell to
– Qualify leads (knowing what characteristics or behaviour make a customer more likely to buy)
Typically, a persona is developed for each customer segment before sorting each segments into one of three buckets:
– Those highly likely to buy (Primary Market)
– Those who buy but are harder to reach (Secondary Market)
– Those who are very unlikely to buy (non-customers)
The reason breaking your customers up into segments (with hard data and use cases) is difficult because the exercise is both an art and a science.
At Momentum, we start with an analysis of your current customers and their buying behaviour. Once we understand the characteristics that drive your customers’ behaviour – such as income, technical knowledge about the product category, industry, budget, etc… – we can draw a box around a subset of customers.
From there, we can measure and quantify the factors that drive behaviour before describing each customer segment in a way that informs and inspires your marketing and sales initiatives.
We have worked with customers who discovered through this process that their primary market is utility companies who have between 10 and 50 trucks and cover large rural areas with low population density. These predominantly co-operative utilities were easy to target through marketing channels specific to rural utilities.
You may have Customer Segments that you are working with right now but segmentation exercises go stale. If your company has defined Customer Segments but they haven’t been revisited in the past 5-8 years, it might be time for a refresh to confirm that these segments are still relevant and that their buying behaviour hasn’t changed radically.
If your Customer Segments needs a refresh or if you have never had clearly defined Customer Segments, give us a call. Your sales and marketing teams will thank you.
Customer Segmentation Is The Reason You Are Here
At Momentum, we have found that the single biggest challenge for our B2B clients is reaching perfectly qualified buyers for their good or services. In fact, our own use of customer segmentation for our marketing agency is the very reason you are here.
We can help you evolve your marketing, right now. We begin every client engagement with a Marketing Assessment. And that begins with a free 30 minute phone consultation.
Fill out this form. We’ll send you more information and follow-up with you personally. Let the work begin!