Good Segmentation Schemes Often Start Out Sounding ‘Just Crazy Enough’

One of the benefits of having coached project teams through our needs-based segmentation process hundreds of times across dozens of industries is that we can spot patterns that are difficult to identify for even the seasoned industry practitioner who has typically developed a limited number of segmentation schemes, probably in just one or two industries.  One pattern that we often see is a natural clustering of customers based on size and complexity – with large customers demanding a high degree of customization for their unique requirements and small customers buying just one or two standard products serving their far simpler needs (or if they do have greater needs, we cannot afford to serve them because of their purchase volume).

While this type of segmentation works in addressing those two extremes, the problem is ‘the middle’ – the medium-size, medium complexity customers.  Leaving them all in one segment is often not a good option, as they can comprise 60 – 70 percent of your revenue.