Insights
Have your customer segments gone stale?
Incomplete or stale segmentation models may be directing your sales team to focus on the wrong opportunities
In today's world, where competition is fierce and sales rep time and resources are stretched thin, understanding customer and prospect potential is key to designing an effective go-to-market strategy and enabling your sales team to efficiently capture share. That's where customer and prospect segmentation can help - it's the process of dividing customers and prospects into smaller groups based on shared characteristics, so that you can better tailor your marketing and sales efforts to their specific needs. For example, an effective segmentation scheme helps sales leaders identify the level of investment required for strategic sales reps, field reps, inside sales reps and technology to unlock potential from smaller customers and prospects through self-serve portals.
While many companies leverage some form of segmentation in their sales planning process, the methodologies are often based on current spend instead of future potential, don’t consider how successful the sales team is in winning business with similar types of prospects and aren’t updated on a regular basis to reflect recent sales performance or changes in demand signals.
Clients that implement best in class segmentation methodologies see increases in both new customer win rates (% vary by client due to ASP and sales cycle), and cross sell/upsell activity within their existing customer bases.
One dimensional customer segmentation models that only focus on current spend are missing a key metric that drives proper allocation of sales resources. Without an understanding of future potential, sales leaders are unable to identify which customers deserve the most attention for cross sell and upsell opportunities.
When hunting for new business, it is essential for a salesperson to have a prioritized list of prospects based on both total account potential and likelihood to purchase. Companies that use a CRM to manage their sales pipeline have a treasure trove of data to help them understand a prospect’s probability of purchasing their products or services. Candela leverages both internal data as well as third-party firmographic and demand information to project a weighted potential based on the sales team’s performance with similar prospects.
If your company does not currently use a CRM or has inconsistent data, don’t fret. Candela has you covered with an interim methodology that can be used until you have a critical mass of clean information. In situations like these, Candela works with our clients to help them collect the necessary data to project probability to purchase and upgrades the model once that data is available.
One of the benefits of Candela’s prospect segmentation methodology is that it evolves as you feed it additional pipeline performance data. Among the biggest missed opportunities that we see with our clients is when they don’t update the model on an annual basis. This could mean that increases in win rates to a particular industry aren't reflected in the model. An outdated model could also miss that a previously less desirable prospect is actually a likely purchaser due to new intent and demand signaling data.
Stale models could be a result of loss of institutional knowledge of the model or a lack of internal capacity. To ensure that this does not happen, Candela has created a cost-effective annual segmentation model update program that can be included in the cost of the initial engagement.
If your segmentation model is non-existent or in need of enhancement, Candela is here to help.
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