Customer Prioritization and Segmentation

Many businesses often fail to see the growth potential that is right in front of them. In a world with complex markets and increasing customer demands, your sales department can boost sales through a clear prioritization of your customers.

With a clear customer prioritization, your company gains a tool to create an overview and ensure action in relation to potential usage. This can answer questions such as:

  • Where is the largest growth potential in our customer base?
  • How do we ensure that sales resources are used optimally in relation to the largest potential and possibility for sales.

A customer case

In the following example, we segmented the possible areas of growth. The customer had previously expanded the breadth of the business in the hope of growth and lacked a clear prioritization. To identify customers with growth potential, we did an analysis that mapped right down to single customer level:

  • Share of Wallet that indicated how large a share of their budget they spent with our client
  • Customer Satisfaction Index (CSI) that indicated their perception of the customer experience

By using these factors to segment the customer base, we were able to provide each account manager with a simple prioritization of their customers in four categories: Grow, FixModel and Move.

We identified 258 “Grow” customers with a low Share of Wallet, but high satisfaction. These were customers with large budgets they spent elsewhere, even though they were satisfied with the company.  Focusing on this low-hanging potential before investing in new markets proved to be more effective and a lot cheaper.

  • Customer-Prioritization-ag-analytics
  • Model. Customers with high satisfaction and high Share of Wallet.  Capitalize on your strong customer relationship.
  • Fix. Customers with low satisfaction and high Share of Wallet. Diagnose and fix these customers to protect future revenue.
  • Grow. Customers with high satisfaction and low Share of Wallet. Focus resources here to obtain the immediate growth potential.
  • Move. Low satisfaction and low Share of Wallet. We recommend assessing the risk and potential of individual accounts in order to determine whether to release or prioritize.
  • Organic growth is most effectively achieved by focusing on “Grow” customers with low-hanging potential. Customer loss can correspondingly be reduced by repairing the broken customer relation in the “Fix” category.

    Using the model ensures that you focus on customers with the largest potential, and at the same time it supports an effective allocation of resources.

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