Better Market Segmentation Leads To Higher Sales

7. August 2014

Improving sales numbers isn’t just about more reps, better products or lower prices. Sales needs to focus their efforts on the right customers and markets.

timthumbData science has changed the ways we create market segmentation. But for many small and medium sized companies that are active in niche markets or handle just a couple of projects per year, Big Data may be too complex to manage effectively. Still, they also can get a lot from targeting sales activities based on the specific needs of well-defined market-segments:

1.) Personalized Offers Improve Win Rates

2.) Targeted Pricing Drives Better Margins

3.) Better Offers Lead To Better Customer Loyalty

Based on the assumption that what worked for customer A is going to work for customer B, salespeople employ the same tactics for every client and every market. But, although different customers may be asking for the same product or service, the value to them may be quite different. The one-size-fits-all approach doesn’t make sense. The key is to address the specific needs and expectations – i.e product and price – for each segment or even individual customer.

Besides, customer retention is critical. According to Harvard Business Review companies lose half of their customers every five years. Building long-term relationships helps you to capitalize on cross-selling opportunities as well as to identify new product ideas that satisfy customers’ needs.

Personalization and customization due to better market segmentation go hand-in-hand. By understanding market segmentation, you can identify opportunities to sell into the „right“ market segment. And by really understanding your customer’s pain point, you can become more than a trusted adviser: a problem-solver that helps them become even more successful.

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2 Antworten to “Better Market Segmentation Leads To Higher Sales”

  1. […] growth and profitability relative to market. Investment should focus on foundational capabilities. I am convinced that market- and customer segmentation, and a focussed approach to target-segments an… Stage 2: Low growth but high profits. To promote growth, companies should focus on building […]

  2. […] we need to understand, who our customers are (Market Segmentation). Next, we have to understand their needs and wants. To that end, it might be […]

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