Customer and Supplier Segmentation: From segments to niches

Customer segmentation...has more dimensions today than ever before.

Customer segmentation--knowing which customers are in each market and/or location, what products they want and when, and how much they are willing to pay--has more dimensions today than ever before.  Determining what services customers value, how and when they like to receive deliveries, and what mode of communication they prefer are just a few examples of these new dimensions.

To further refine customer relationships and heighten customer profitability, many distributors have stopped selling to  (or are selling differently to) unprofitable customers--deciding which ones should go and which ones are worth keeping, margin-wise.  The same applies to supplier relationships; fee for service payments from suppliers will continue to grow between now and 2015.

ACTION POINT: Identify the customers and suppliers that are essential to your profitability.