Targeting & Segmenting Customers

A former vice president at a major office supply company recently talked to us about targeting and segmenting her customers for the sales organization.

Below is some of her wisdom and advice:

“We tried to help our sales people understand where they could get the best return. It was pretty scientific actually.   We found a way to design potential by customer size, by territory.  Really, it’s sitting down there, and it’s not glamorous.  It’s a lot of sweat equity as you figure out what the territories need to look like and then actually measuring people against that potential.  You get people who say, ‘My potential is not very good.’ Too bad.  You’ve got to get people to understand where you are going. Then they can change and you manage according to potential. 

 

We took a look at the geography, understood the customer that was set within that geography, understood what the buying habits were of the potential customer set within that group and then applied that to territory design. 

 

“It also spoke to organizational design because we had overlay organizations.  Everybody was a generalist and we had to determine what levels of productivity we could see improve with some specialization.  There was a need to get some specialization in the organization – – people who could hunt, people who could farm, education people, government people where buying cycles and purchasing patterns are unique and procurement policies are different. 

 

“But you can take that too far, and I think that’s what happened.  I would caution people to try to step back every once in a while and look at the whole forest, because those trees get in there and get you kind of confused sometimes. Eventually we knew we had gone too far. It happened over time. We got away from a sales operating perspective.  We didn’t keep a focus on ensuring that it remained clean and pure, so we ended up with all of these overlay organizations. People would tell me, ‘This is my sales territory and I’m the business development manager of this territory and, oh by the way, here’s my partner from the education sector, my partner from the government sector, my partner from copy and print, etc.’  There became so many segments that it became diluted. The cost of sales needed to be examined more closely than what it was.”

 

To learn more visit SalesGlobe or email mark.donnolo@salesglobe.com. 

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