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© G
unnar
Schrö
der
2016
by Gunnar Schröder
Accelerate your Sales Performance
To make CRM customer segmentation really work
7 Steps
© G
unnar
Schrö
der
2016
© G
unnar
Schrö
der
2016
7 Steps to make CRM customer segmentation really work
CRM Customer segmentation is a key topic for marketing and sales. However
many segmentations practically do not work very well as they are
oriented rather on the technical possibilities than on the real needs.
The following presentation will give you
practical tips on how to design a
customer segmentation effectively. Resulting in valuable information which
can be really used by marketing and sales.
Gunnar Schröder, April 2016
Accelerate Your Sales Performance
© G
unnar
Schrö
der
2016
Content7 steps to make CRM customer segmentation really work
Step 1 - Identifyyour needs
Step 2 - Rankby impact
Step 3 - DesignSegments
Step 4 - Testusability
Step 5 - Implementin CRM
Step 6 - Educateyour team
Step 7 - Ensureconsistency
Accelerate Your Sales Performance
© G
unnar
Schrö
der
2016
Step 1
Identify your needs.
© G
unnar
Schrö
der
2016
Identify
your
need
s.
Customer segmentations should be as simply as possible. Therefore the
best way to separate cool ideas from
real needs is to collect from all
stakeholders real used cases.
Stakeholders include sales, service,
marketing, product marketing, business development, executives,…
Please refer to Annex 1 for typical stakeholder desires.
© G
unnar
Schrö
der
2016
© G
unnar
Schrö
der
2016
Identify
your n
eeds.
Make sure you ask
o In which used cases would you
practically use customer segmentation data ?
o What improvement you would
like to achieve with the customer segmentation in this used case compared to todays situation ?
o What measurable output you
can create in this used case by applying the customer segmentation ?
o How often do you perform the
used case ?
o Do you really have the resources to perform the used
case ?
© G
unnar
Schrö
der
2016
Step 2
Rank by impact.
© G
unnar
Schrö
der
2016
Rank b
y im
pact.
When you have your collection of used cases, rank them according to their impact/business importance. The answers to the questions above about “improvement” and “measurable
output” will support you to to rank the used cases based on rational criterion.
As this step is fundamental for the further proceeding please make sure to
involve all relevant stakeholders in a workshop. This ensures that everybody has the same understanding about the priorities and is supporting the outcome.
© G
unnar
Schrö
der
2016
Step 3
Design segments.
© G
unnar
Schrö
der
2016
Desig
n s
egm
ents
.
Start with priority 1 used case
and develop a workable segmentation before going to lower priority items.
For an efficient idea collection process
I recommend to constantly raise the questions on the next page to
eliminate irrelevant segments from the start.
Please refer to Annex 2 for segmentation examples.
© G
unnar
Schrö
der
2016
© G
unnar
Schrö
der
2016
Desig
n s
egm
ents
.
Questions to ask
o Is the group defined by a segment
really relevant from business point of view and would justify a
dedicated marketing/sales approach ?
o Is there is no misunderstanding possible about which customers
belonging to this segment ? Make sure to formulate a clear description that defines the segment.
o Is this segment really different compared to others considering your products and services you provide and the used case you want to serve ?
© G
unnar
Schrö
der
2016
Desig
n s
egm
ents
.
Questions to ask
o Is it really easy to get this
information ?
Consider the normal sales process and evaluate if this information is available at the time you want to have it.
o Can I use available data to
define the segment ?
An application might be clearly linked to a specific product. In this case it is much more wise to make the product sold/offered to the segment identifier rather then to leave the segmentation to the sales force.
o What is the suitable customer hierarchy level ?
Like company, department, contact.
© G
unnar
Schrö
der
2016
Step 4
Test usability.
© G
unnar
Schrö
der
2016
Test usabili
ty.
At this time point you should run a
workshop with selected sales people to make a proof of concept.
Train them on the segment
definitions.
Test practical customer examples against the segment
definitions and collect potential problematic cases.
Use this occasion also to check the CRM templates in terms of
usability. There will be always complaints but you can soften the negative power significantly if you involve sales people at an early stage of the implementation
© G
unnar
Schrö
der
2016
Step 5
Implement in CRM.
© G
unnar
Schrö
der
2016
Imple
ment
in C
RM
.
If you are serious about your segmentation, then any segmentation
field in CRM should be a duty field.
You can set conditions which are
enforcing a segmentation.
E.g. quotation creation is only possible before having ticked the segmentation.
As your segments at the end will most probably not cover 100% of your customers you might need to add a customer category “I’m sure this customer does not belong to any of the
segments”. I would clearly avoid to use the term “others” as it is too
easy to tick this as a default.
© G
unnar
Schrö
der
2016
© G
unnar
Schrö
der
2016
Step 6
Educate your team.
© G
unnar
Schrö
der
2016
Educate
your
team
.
Training is key if you want to ensure that people entering customer segmentation data are doing it the way
you intended. An e-mail is not sufficient.
I recommend that you explain the background. Get a common
understanding about the used cases which will be processed based on the customer segmentation and what the
expected output is.
Especially make sure that you are not performing this training only once but
that every newcomer is getting a
first hand training.
© G
unnar
Schrö
der
2016
Step 7
Ensure consistency.1718
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© G
unnar
Schrö
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2016
Ensure
consis
tency.
For any segmentation I recommend to
have a clear process in place to
approve new customer entries.
This best works if this authority is in the hierarchy higher then the employees responsible for entering the segmentation data.
I would recommend to have this function in sales management. Alternatively the CRM content manager or the sales back office could also do the validation.
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© G
unnar
Schrö
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2016
Hope You got some Inspiration
Need More ?
Information, Consultancy, Seminars. Please contact me at:
Gunnar Schröder
+41 76 748 34 [email protected]
© G
unnar
Schrö
der
2016
Annex
© G
unnar
Schrö
der
2016
Annex 1Stakeholders and their Desires
Marketing/Service MarketingMost customer segmentations are not only initiated by marketing but they are also usually the group with the most relevant used cases. For marketing purpose you usually want to address messages to specific customer groups with the target to make lead generation more effective.
Sales/Service Sales Sales needs a tool to quickly target/select customers for a specific sales activity. Sales usually does not expect to get the perfect list but they simply looking for a tool to make their customer selection process more efficient.
Product Marketing Product marketing needs information to prioritize product developments and initiate market researches. But often the data required can not be collected effectively by CRM as the desired data is changing from project to project.
ExecutivesExecutive are usually looking for financial segments at a very high level. And often the only way to collect such information is in CRM. Therefore when you design segmentation make sure you don’t overlook this group of people in your company.
Business DevelopmentBusiness development is looking for business trends to identify potentials and set activity priorities. In addition business development is eager to have relevant information to support strategy design.
© G
unnar
Schrö
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2016
Annex 2Segment Examples
Buying behavioro Average annual purchase volume.o Purchase date of the product.
Buying influence typeo Technical advisoro Usero Economic
Where the money comes fromo Private o Public
What customers doo Industry segment they are operating in
(can be automated with SIC/NAIC coding).
Why/How customers use your producto Application the customer use the
products for. o Process they are using the product in.
What product they are usingo Products/services they are using.o Product technology they are using (can
be retrieved from ERP if Product groups are established accordingly).
