At Sintec we apply the best practices of customer segmentation to identify growth and profitability opportunities with customers.
“Segmentation is the conceptual competitive advantage of a company. The business and service model has to constantly adapt to the different needs of customers.”
– Carlos Salazar, President of Coca-Cola FEMSA
In the growth process, companies seek more customers to sell to. This leads them to participation in different segments and channels that behave differently in their demands, in their attention requirements, and in their products. This dynamic can mean that not all customers contribute equally to the profitability of a company. It can even mean that some customers cause the company to lose money, in that the total cost to service the customer is greater than the variable contribution from sales. Shedding these customers would eliminate the involved resources, and the company could be profitable.
In order to generate greater profitable growth, it is important to understand that not all customers are the same in regards to needs and profitability. Certain business actions and decisions can have a negative impact on sales and earnings. Examples:
- Incorporation of customers / channels without an adequate selection process
- Lack of clarity on profitability at a customer level
- Too much or too little attention to customers
- Customer penalization due to lack of service (Example: Modern / Supermarket channel)
Key market and customer segmentation pillars:
- Understanding the market and its competitive environment in the related industry
- Customer segmentation and detection of growth opportunities
Strategic questions to be answered:
- What are the customer types and how are they different?
- What are the opportunities for growth in the market?
- How much value can be obtained in each segment?
Based on in-depth analysis, we define along with our customers: the key segments, the strategic intentions by segment, value propositions, product/service portfolio, business plans, market attention and control requirements, value delivery and capture models, and marketing initiatives.