Market Segmentation: Create a Clear Focus for Your Sales Activities

Market segmentation helps to create order: first in your mind, then in your sales department. Often, customers and potential customers are not processed in any discernible order, meaning that valuable company resources are not used efficiently. Market segmentation is the process of dividing the market into several target groups to make it easier to understand. This chapter will explain how to filter out the most promising customers from the crowd and how to target them more effectively using sales and marketing strategies. It’s a situation you’re probably familiar with: Your field sales force is whizzing around outside the company, visiting all kinds of customers and bringing back various technical requests, which now need to be processed as quickly as possible. When asked, the sales force employees report that the potential offered by each of the customers (some of which may be new) is always very high, or at least quite significant. The requirements of the individual customers have little if anything to do with each other. The order in which the R&D or application engineering department processes this flood of assignments depends on which customer is putting them under the most pressure or on their relationship with the sales force. The focus here is not on creating value. In these cases, valuable company resources are misused, if not wasted completely. The most effective way to remedy this is to have the sales force focus on customers that the company can serve in the best and most expert way possible with the given resources.