The temptation is so strong! With technology being what it is today–vast, easy and cheap—your company can theoretically reach the entire world! Wow, what a great company you’d have if that happened!
You know, however, that that theory doesn’t really translate into day-to-day realities. Among the challenges is this one: everyone else thinks the same thing, so there are untold millions trying to reach the other untold millions. Many will never reach a soul.
The Power of Segmenting
I love the power of segmenting. I don’t dream of vast reach and clients around the world. I focus on people who know my company and will do more business with me as long as I keep in touch with them and continue to evolve my offerings to meet their evolving needs. I teach my clients to apply the power of segmenting. They enjoy exponential revenue and profit growth as a result.
Segmenting means breaking your revenue generating activities into pieces and designing actions that work for that type of segment. These are the big three:
1) Buyers. Not all buyers have the same buying mindset, so we group buyers by high, medium and low value mindsets. High value mindset: these buyers want high value and will pay for it. Medium value mindset: they want mid value and will pay for it. Low value mindset: these buyers put price over all other qualities. They favor discounts and coupons, are generally loyal to low prices and discounts and will jump ship for the next provider offering a discount.
2) Offerings. Your company should offer high, medium and low value options. There’s a difference between standards and value, which I described in detail here.
High value offerings go way beyond your standards, with value from access, quality, limited supply, status and convenience (including timeliness).
Medium value offerings are built upon your standards, offer mid-quality, good service, reasonable time frame.
Low value offerings meet your standards at the lowest possible price.
3) Marketing. When you segment your marketing campaigns, you’re able to send the exact right message to each segment.
A campaign is a series of marketing touches to a specific segment.
For your high value clients, you may do a campaign of 3 touches over 90 days. Keep track of responses. Invest heavily in marketing to your high value segment because the payoff is huge.
For your mid level segment do a campaign of 1 contact 4 to 6 times per year. Include both appreciation messages and marketing info about your mid level offerings, but keep these separate. Do NOT offer discounts or sales to mid-level buyers.
Do not invest in any campaigns for low value buyers unless that is your whole business.
Segmenting is Easy
Segmenting is easy using data and information you already have on hand. That’s how I always work.
I have worked with owners who held all the information about their high value buyers in their heads, and we created extraordinarily successful marketing campaigns for that segment.
On the other hand, there’s the HVAC company with 9000 customers and an outdated application that mostly keeps contact information about customers. We used the collective wisdom of 2 dozen customer service reps to segment their buyers into high, mid and low; designed offerings for the high and mid groups; and then these intrepid souls got on the phone and made hundreds of calls. The outcome? A 23% increase in revenue from 1500 buyers in the first three weeks.
What can segments do for your company?