Divide and Conquer A Primer on Needs-based Segmentation
Perhaps there was a time when "everyone is my potential customer" was a viable strategy. But the simple fact is that we can no longer be all things to all people, if we ever could; and those who try to be are seldom able to provide superior service to anyone. And so for starters, you can redeploy dollars previously spent in pursuit of unprofitable business—because you can now recognize it for what it is.
You can assign a percentage of your marketing budget to each segment that merits pursuit, echoing the percent of potential profits that segment can generate. You can use the segmentation schema and the pyramid to help your field force do a realistic analysis of how much business they can do in their territories rather than "arbitrarily" asking them to increase their business by ten or some such percent.
Because you understand the priorities of each segment so well, you'll have the inside track on the right message to deliver, and the media which can do it most effectively, within a given segment's allotted portion of your budget.
Ultimately, most of your dollars will be invested where the profit potential for developing loyal customers is the greatest—a strategy that appears to be self-evident, but too seldom is practiced in real-life decision-making.
As a result of this approach, effective data-based, loyalty-focused business-to-business marketers find that they are investing a lot more of their budgets in highly targeted communications to the segments most likely to become loyal customers, rather than through more traditional mass-media attempts to send one watered-down message to their entire, undifferentiated universe. They have the tools to become more active managers of relationships with both dealers and end-users—educating their organizations about the needs of individual segments, enhancing the delivery of products and services, developing targeted offers more likely to draw response, and better allocating resources in the design of sales territories. And, since they're talking to each customer in terms specific to their own concerns, a dialogue is established; relationships are formed; knowledge is managed; satisfaction, growth and profits follow; and, with them employee performance and morale are increased. A reinforcing feedback loop which leads to sustainable competitive advantage.