Generally when we are called to work with a client on market segmentation project, it’s not the reason we were asked to support. Most established businesses will have some level of segmentation, already in operation and delivering to some degree, it’s desired outcome. Where market segmentation becomes critical is as businesses gain better data insights and to set strategic decision. A solid market segmentation project not only answers the question of “How can I better serve my customers today.” But also, “How can I position myself to serve my customers (old and new), tomorrow.”
In a recent presentation to members of the Norfolk Chamber of commerce, I explained that market segmentation is an iterative process. I generally say its non-negotiable for start up businesses. Should be conducted at an annual plan every year, whether that is a light touch or full project depends on the last time it was conducted effectively and the strategy of the business.
If this is about market segmentation, surely an existing customer focus sounds counter-intuitive? Why would anyone hire a consultant to get the business that they already have. Surely that’s what we have our existing team for. The truth is, when we look at the classic Ansoff Matrix, we understand that the lowest risk expansion we can take is market penetration. This comes from our existing customers and existing product lines. Within this area, there can be many different customer segments. The question is, how do we ensure we are serving them all to maximum effectiveness. For a start, are they buying all of the product lines they could be buying? What can we do to increase our top line revenue? How can we do this without adding huge conversion costs, maximising our return on sales? Resegmentation consultancy helps to answer these questions and drive more profit to the bottom line.
Following our proven process driven approach, we can review current market segmentation within a business. Support with an action plan of who to target, how to approach them along with the tools that allow your business to win more sales.
Being in business is all about taking risks. How do good businesses become great businesses? Simply by mitigating and offsetting it effectively. At some stage, through choice, judgment or opportunity – businesses will need to at the very least review market development or product development. To whichever extent, greater or lesser that may be.
Understanding what new customers may look like, what your value proposition to their needs is, and creating the channel in which to sell to them is just a number of ways of mitigating risk when considering market development. Product development follows a similar pattern of must haves to mitigate risk, at Akcela we strongly believe that product development should be driven from your existing customer base. Just like is demonstrated in the Ansoff matrix, the closer this new product sits to your existing customers, the lower the risk. A good strategy to deliver this, reduces this risk even further.
Diversification by its very nature carries the most risk of any market segmentation activity. Akcela utilise our core team of management consultants to bring in skills that include brand strategy, organisational alignment and channel identification, sales process and full implementation strategy to create a roadmap that can support your businesses diversification strategy.