from D.Keith Pigues
Since that time, my colleagues and I have worked with countless organizations – large and small, in every part of the world, across industries – supporting their efforts to develop organic growth strategies for their business. These additional very real experiences have only served to reaffirm the starting point for any leadership team in the development of a winning growth strategy – asking the tough questions. Chief among them is “Why are we where we are at this moment on the journey?” In the book we offered the Six Reasons Why We Lose:
- We don’t understand the customer’s perspective.
- There is not enough quantitative rigor.
- Data collected never finds its way into planning or execution.
- We rely on individual surveys versus a continuous process.
- The organization is not aligned or involved.
- There is no systematic playbook.
Time and experience have only served to reinforce why it’s important for leaders and their teams to examine these areas in considering how to accelerate and sustain, the often elusive, profitable organic growth. We’ve gained new insights in each of these six areas over the past decade. One of the areas that continues to represent a major challenge for organizations as they prepare to restart growth in 2021 and beyond: Data collected rarely finds its way into planning or execution.
This issue begs a question: Why do organizations invest considerable sums on research and other consulting to understand how the current and future products/services meet the needs of customers and outperform competitive offerings, yet the results and insights are not fully used to support critical decision making and strategic planning? We know that leaders and their teams are committed to making the best decisions to drive growth and increase profit. I’ve sat in the decision-making seat as a Chief Marketing Officer for four organizations and hired nearly every major consulting or B2B research firm to support our teams in those companies. We struggled at times to fully utilize the results and insights to drive key decisions. As I reflect on my experiences and those of our clients, there are a couple of immediate opportunities to utilize that data in planning and execution as you prepare to restart growth in 2021 and beyond.
First, it is important to recognize that all of your customers or clients are not the same. You may now be looking at your screen with a blank stare thinking – tell me something I don’t know. Well, before you tune out. While this may seem intuitively obvious to even the most casual observer, we have identified one particular area where B2B organizations struggle to put the customer data and insights into practice. This area is customer segmentation planning and execution – identifying distinctly different groups of customers and providing offerings that meet the discrete needs of each group.
We believe we may have uncovered why this continues to be a challenge for some organizations – well, first, it is not easy! In fact, it can be incredibly difficult. What makes developing and implementing customer segmentation in B2B challenging? It requires a specific customer data and insights to develop the most effective and actionable segments – value-based customer segments. Traditional forms of research may not provide the data and insights needed to uncover the important customer value drivers needed to accomplish the feat.
We have encountered this with clients. A recent client situation illustrates this well. This technology provider is a well-regarded ingredient brand in its industry. The previous customer segmentation was based primarily on the customer’s use of the product, or the functionality required by the customer to meet specific needs of its consumers. This a typical customer segmentation for this type of business; however, it does not capture or include other important customer value drivers to develop a more robust segmentation and opportunity to create additional value for customers. Customers had moved beyond mere product functionality and started to demand more value-added services which are critical to their success.
The addition of customer value data and insights were used to develop new value drivers that represent the strategic measures of customer success – what drives their growth and profit. These value drivers also serve as potential customer segment drivers. The additional drivers include the customers’ business model, growth strategy, stage of relationship, marketing prowess and others. Each of these represents potential opportunities to more effectively segment customers based on the factors that contribute most to their growth and profit, beyond the focus on product performance, and creates new paths to create value for customers – ways to help them make more money!
As you consider your customers and the changes they have experienced over the past year, what are the potential new areas where they would like your help to grow or increase profit? What’s changed for them? How have their growth and profit strategies changed? What are the new and different growth obstacles or accelerants that emerged over the past year? How can you help?
As organizations are working to accelerate, getting important customer data and using it to make customer segmentation decisions more confidently will help identify where to focus to help customers most. This insight will help to chart the course for your growth.