Customer Segmentation

      Customer segmentation is an important part of selling goods and services.Understanding the different demographics of your customers allows you to specifically target your marketing or your efforts on particular customers.This even includes determining what types of customers you do not want to have.This may be difficult to comprehend, but some customers may just not be worth it.
      Recently, I have been reading a lot of reviews of one particular winery equipment supplier.I have heard every horror story about this company.They swear at you on the phone, are generally rude and could care less about your order.Then, I started talking to some other folks and they had only glowing praise to give to this firm.Needless to say, I was shocked.How could a company be so rude to one set of customers and so pleasant and accommodating to another?The answer lied in how they segmented their customers.It turns out the first set of customers fit a specific profile of a “hobby customer.”This customer generally has a lot of questions and will have a low dollar amount for an order.The second customer segment was the “professional customer.”This customer was very knowledgeable already and had few questions and typically went for larger size orders.So, this company had determined that it was more important for them to be nice and attentive to their professional customers than to their hobby customers.It seems to be working.The company has ben in business for many years and has shown growth as the number of commercial wineries in the United States has expanded.
       I am not implying that it is OK to be rude to your customers or swear at them as this case shows.However, I do suggest placing a higher value on customers that you believe deserve your attention.The trick is to understand the segments to begin with.A lot of companies develop “nicknames” for these people.(Best Buy had some famous examples).This way, it is easy for your sales staff to identify these customers and determine the category into which they fall.They can then respond appropriately to the strategic approach to that customer segment.As an example, let us say that we developed a customer segment called “Jane Career.”This segment had the following demographics, early 30’s female professional career oriented.As part of our strategy targeting this group, we knew that this segment wanted personalized service on spirits over $30.The sales staff could tailor their particular approach based on this segmentation.The main benefit here is that all of our sales staff align with the strategic direction of how we want to approach these particular clients.Alternatively, a customer segment called “Joe 30-pack” could be developed that is interested in only domestic lagers in case quantity.Depending on your company, this could be a target demographic that you want to serve or not.If you do, a specific approach for them will help.If you do not, you can choose to ignore or discourage this customer segment.Wine shops discourage this customer by simply not carrying this type of alcohol.It’s subtle, but an example of how some places discourage a certain set of buyer.Alternatively, a local package store may not carry $30+ bottles of spirits, for the sole fact that they do not wish to deal with Jane.
        It is important to understand your customer segmentation and then develop an appropriate marketing and sales strategy to deal with each of those customer segments.This improves the focus of your sales strategy and drives alignment of your sales staff in their response to different customers.