At the expansion stage, executing a marketing strategy without any knowledge of how your target market is segmented is akin to firing shots at a target 100 feet away — while blindfolded. The likelihood of hitting the target is a matter of luck more than anything else.
If best current customer segmentation is done right, however, the business benefits are numerous. For example, a best current customer segmentation exercise can tangibly impact your operating results by:
1. Improving your whole product: Having a clear idea of who wants to buy your product and what they need it for will help you differentiate your Brand as the best solution for their individual needs. The result will be increased satisfaction and better performance against competitors. The benefits also extend beyond your core product offering, since any insights into your best customers will allow your organisation to offer better customer support, professional services, and any other offerings that make up their whole product experience.
2. Focusing your marketing message: In parallel with improvements to the product, conducting a customer segmentation project can help you develop more focused marketing messages that are customized to each of your best segments, resulting in higher quality inbound interest in your product.
3. Allowing your sales organisation to pursue higher percentage opportunities: By spending less time on less lucrative opportunities and more on your most successful segments, your sales team will be able to increase its win rate, cover more ground, and ultimately increase revenues.
4. Getting higher quality revenues: Not all revenue dollars are created equal. Sales into the wrong segment can be more expensive to sell and maintain, and may have a higher churn rate or lower upsell potential after the initial purchase has been made. Staying away from these types of customers and focusing on better ones will increase your margins and promote the stability of your customer base.