When breaking down or segmenting products or services into those which are more important than others, keep in mind the "Pareto Principle" or the 80-20 rule, i.e. that 20% of products/services deliver 80% of results. So start your segmentation exercise by identifying the 20% of products/services that deliver 80% of profits, then thoruoughly understand the customers buying these products/services, their likes/dislikes, purchase behavior, repeat buying rate, etc. then focus on selling more products/services to them. Also, develop a "profile" of the top 20% so you can find new customers who match this profile.
Segment selection should start from a company's assets. Assuming that published growing segments or services are appropriate for your firm can be very misleading. Once you have determined your assets, exploit them by finding individuals that this single benefit would have the greatest impact. For example, a household odor removal company might select a segment of consumers that are interested in beautifying their home. Thus, your odor removal asset can be converted into positioning and new products that enhance the aroma of homes not just killing the bad insects. Perhaps you are a commercial real estate company. Ordinarily you would seek segments targeted to retail or office leasing, etc. However, your assets are based more the data that you have been collecting. Thus, the targets become segments interested in economic forecasting of what is going to take place in their segment i.e. the leading and largest customers in these commercial real estate segments interested in staying ahead of the competition. Thus, find those segments that can leverage your assets. lewis berey lberey@npinpi.com
When breaking down or segmenting products or services into those which are more important than others, keep in mind the "Pareto Principle" or the 80-20 rule, i.e. that 20% of products/services deliver 80% of results. So start your segmentation exercise by identifying the 20% of products/services that deliver 80% of profits, then thoruoughly understand the customers buying these products/services, their likes/dislikes, purchase behavior, repeat buying rate, etc. then focus on selling more products/services to them. Also, develop a "profile" of the top 20% so you can find new customers who match this profile.
ReplyDeleteThis is from one of our mentors
ReplyDeleteSegment selection should start from a company's assets. Assuming that published growing segments or services are appropriate for your firm can be very misleading.
Once you have determined your assets, exploit them by finding individuals that this single benefit would have the greatest impact.
For example, a household odor removal company might select a segment of consumers that are interested in beautifying their home. Thus, your odor removal asset can be converted into positioning and new products that enhance the aroma of homes not just killing the bad insects.
Perhaps you are a commercial real estate company. Ordinarily you would seek segments targeted to retail or office leasing, etc.
However, your assets are based more the data that you have been collecting. Thus, the targets become segments interested in economic forecasting of what is going to take place in their segment i.e. the leading and largest customers in these commercial real estate segments interested in staying ahead of the competition.
Thus, find those segments that can leverage your assets.
lewis berey
lberey@npinpi.com