Focusing On Your Customers' Customer

We have found that qualitative insight, especially when based on executive-level interaction, can be eye opening. 

Demographic information about customers, such as industry category or company size, is readily available and provides a good starting point for segmentation.  However, don't confuse the precision of the data with the level of insight provided.  Many businesses that look exactly the same on the outside (for example, when researched on business websites such as manta.com or Hoovers) operate very differently from one another.  We have found that qualitative insight, especially when based on executive-level interaction, can be eye opening.  For example, a floral distributor segmented its small florist customers based on the professional background of the owner.

It found that some were businessmen who happened to be selling flowers; others were flower lovers who decided to go into the business.  You could never uncover these distinctions by looking at a business directory, but they proved essential for the success of the distributor's strategy.  The distributor created separate sets of sales tools (for example, foot-traffic estimation spreadsheets for the first group and arrangement-of-the-month promotions for the second group) and ultimately used this information to make market-growth projections and allocate sales resources.  These tools are now part of the distributor's integrated sales management system, which includes compensation and the annual budgeting process.

ACTION POINT:  Seek insight from the executive level of your customers.