CRM - February 2008 - (Page 39)

CUSTOMER SEGMENTATION Marketing Segmentation of B2B vs. B2C In the grand scheme of things, segmenting B2B and B2C customers involves the same general concept: Cater to your customer. However, Dennis Rheault of Bridge Strategy Group offers some basic differences that could influence your segmentation strategy: } CONSUMERS: • Care deeply about brands—so focus on the image your brand creates • Buy small quantities • Make many small transactions • Will respond to pushed-out feedback surveys because of volume • Require more sophisticated segmentation tools because of the mass of data they produce BUSINESSES: • Care more about value proposition when it comes to brand than they do about how you’re trying to make them feel • Make fewer transactions • Are relatively large accounts—often at the thousand- or million-dollar level • Can be well segmented without sophisticated technology tools because there isn’t as much data • Can be hit up for feedback more directly (e.g., via in-person meetings) Although the B2B model may seem like less work, “the segmentation and getting it right [are] just as important,” Rheault says. “I don’t think it’s any easier, just different.” —JT of money, and mostly what it takes is creativity— the creativity to understand your customers and process and to build outreach programs that uniquely fit the process that you’ve identified.” Quality segmentation goes beyond the marketing and sales departments, requiring the participation of senior management. Upper-level executives have to sit down and honestly answer these seemingly simple—but crucial—questions: • What do I sell and how do I sell it? (At retail? Through a direct/indirect sales force?) • What is the business process I need to support? What vehicle or tool do I need (e.g,. email marketing, paid search, etc.)? • How many segments can I really support? That’s a lesson Cynthia Clark, chief information officer of restaurant franchise Thomas & King, realized only in hindsight. What her segmentation efforts really required was a transformation in how to problem-solve. Restaurant-industry products are highly commoditized and competition is fierce.“People have so many choices,” Clark says. She had to confront individual differences instead of treating everything as a whole. For instance, Thomas & King’s restaurants are nationwide, making them susceptible to regional market trends: The price of Arizona’s produce is different than Ohio’s; demographics are different; Phoenix was suffering from a high rate of home foreclosures when Cleveland wasn’t. Every element affects business strategy— and looking at national averages presented an inaccurate and ultimately useless assessment. “The good news is that it’s never been easier to do this kind of thing,” Pombriant says. Affordable, on-demand technology has enabled firms of all sizes to launch segmentation efforts without cost- or labor-intensive investments. Yet there’s still cause for concern: “The surefire way to be unsuccessful is to put in a [segmentation] tool which is very difficult to implement, takes a long time to implement, and then is hard to change,” Qliktech’s Deighton says. Easy or not, the time for segmentation is now. Data is flowing into enterprises by the truckload and as the volume increases, intuition isn’t going to cut it, and neither is mere manpower. “Just because you have the information doesn’t mean you’re using it properly,” says Dennis Rheault, a partner at Bridge Strategy Group. When testing out possible software solutions, customers must request to see their own data in the tool. “If you’re working with a software vendor and they won’t show you your data with their tool, kick them out of the office,” Deighton says. Many software-as-a-service business intelligence vendors have free trials that can be downloaded straight from their Web page. Further evaluation Segmentation leads to personalization, or at least the appearance of it. www.destinationCRM.com CUSTOMER RELATIONSHIP MANAGEMENT | FEBRUARY 2008 39 http://www.destinationCRM.com

Table of Contents Feed for the Digital Edition of CRM - February 2008

CRM - February 2008 Contents Front Office Reality Check Customer Centricity The Tipping Point The Loyalty Riddle CRM Drives Down-Market Out of the Gate: Marketers Rate ’08 Traits The Pulse Consultants Adapt to CRM’s Changing Landscape Required Reading Cover Story: CRM Gets Serious Contact Center Solutions Always On Rumble in the Office The Smallest Slice Tying Up Cable’s Loose Ends Burning Up the Paper Trail Sunny Skies for Knology No More Bumps for BlueRoads Secret of My Success Re:Tooling Scouting Report Pint of View

CRM - February 2008

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