Segmentation V

There are no definitive standards, but based on our experience, adequate segmentation for a wholesaler-distributor business unit with revenue between $50 million and $1 billion would include:

You could spend your entire career segmenting your market, but the question is, when is it sufficient to move ahead?  There are no definitive standards, but based on our experience, adequate segmentation for a wholesaler-distributor business unit with revenue between $50 million and $1 billion would include:

• Between 3 and 12 distinct segments representing both existing and potential customers

• Two-to-three-page descriptions of each segment, including business and economic drivers, key decision makers, buying behaviors, and typical examples

• Validation of the segment categories through assignment of current customers or external sampling

• Validation of segment categories by experienced customer-facing staff (also known as the smell test)

• Short descriptions of the ideal supplier for each segment.

ACTION POINT: Begin to evaluate your territories, markets and business from a segmentation point of view.