B2B Segmentation

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Suhale
Member

Posted 12-Sep-2006 12:04 AM
I work for a finance company where our products are sold through independent intermediaries. Traditionally we have not attempted to segment our partners and so have become a ‘one size fits’ all company, with minimal differentiation.

This has led to us losing market share as we align expensive sales resource to poor performing partners. There are lots of techniques available to profile customers in a B2C environment but struggle to find any easy to implement techniques to help me segment and derive true partner worth.

Any ideas/pointers pls?


Evan Wood
Member

Posted 18-Sep-2006 09:13 AM
Suhale,

While it’s true that there are a variety of B2C segmentation models and options, there are plenty of ways to segment on a B2B basis without getting overly complex.

Segmentation means categorizing your partners into like groups based on common characteristics. These characteristics may include groupings of products/services that your partners sell, segmentation based on your partners’ specific target customers, geographic segmentation, demographic data, or attitudinal (e.g. your partners’ disposition toward you and your products).

Unless you already have a lot of your partners’ demographic, psychographic or behavioral data in a database, you may need to do some primary research to help distinguish between high and low performers. A quick (and inexpensive) online survey can accomplish this, with appropriate interpretation.

However, once you have identified these distinguishing characteristics, turn them into your ‘golden questions’ for future partner screening and segmentation.

Keep in mind that whatever segmentation approach and variables you choose, your segments need to satisfy the following 3 criteria:

The segment must be readily identifiable and recognizable by the sales force, and distinct from other segments identified;
The segment must have a consistent selling pattern (of your products) so the segment can be reached by structured sales strategies; and
The segment must be able to be measured and must be large enough to justify being targeted.

Hope this helps.

President, JumpWood Marketing
www.jumpwood.com


Barry Trailer
Guru
Member

Posted 19-Sep-2006 09:32 AM
Hi Suhale,

You’ve identified a common frustration on both sides of the partner equation. Principals feel they are over investing in poor performing partners and high performance partners feel underserved and, likely, unappreciated. Bad news all around.

While an earlier response suggests specific criteria for segmenting, let me add a few that may be more readily available to you. The most common metric for ranking partners is total revenue. While this is easy to determine it does little to identify what these folks best need. In one firm, a specific partner through his personal relationship was fed a disproportionate share of leads generated by the principal. When this partner then repeatedly ranked #1 in revenue it: a) came as no surprise to the other partners and b) engendered a high degree of animosity and distrust in the channel.

Having a transparent and consistent method of lead distribution is a good starting point in addressing such an issue. Beyond this, however, evaluating and rating the commitment each partner is making to your firm should also be taken into account. Do they have more than one or two individuals certified in your products and services? Have they invested in systems and/or programs that ensure quality delivery and track customer satisfaction? What level of repeat business do they enjoy? Are they making good use of co-op marketing funds and do they consistently develop their own steady stream of qualified leads?

All of these are clear actions on the part of the partner that they are committed to successfully selling and delivering your offers. With these in mind, are there specific actions you can take as principal to more fully—and uniquely—match their commitment?

Recognizing different levels of commitment/achievement (e.g., Platinum, Gold, Silver) in addition to revenue also provides an opportunity to define in advance levels of partner support. Look to the airline affinity programs for ideas/examples. You may provide leads, an exclusive 24/7 support line (with a real on-call person), higher percentage co-op funding, recognition awards, etc. For low level Silver partners they may only have access to an automated knowledge base as an example.

The best bet is to first identify the criteria that have value to YOU, then interview several of these firms and find out what services/benefits/privileges would have value to THEM.

Good luck! Let me know how you progress with this.

Barry


Suhale
Member

Posted 26-Sep-2006 11:36 PM
Hi Barry,

Thanks for your response. Fully agree with your view where we must recognise different levels of partner commitment and align business resource to match partner loyalty.

We are currently starting a process whereby we are evaluating approx 500 partner relationships on an Opportunity vs Fit matrix ie what revenue/share of wallet we currently have with a partner and the fit between our capabilities and the needs of our partners.

We then hope to grade these on the basis that a high opportunity and high fit requires greater sales and service resource (Gold partners). At the other end of the scale, low opportunity and low fit constitutes a low touch/exit strategy.

Thats almost the ‘simple’ part. Next I need to take that data and begin to apply our sales resources/relationship managers to truly maximise on partner potential, taking me in to the arena of sales organisation design in a B2B market place. We are having to look at contact strategy per partner, territory mapping, optimum face to face calls etc.

Any pointers in this area pls?

Thanks
Suhale

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