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Framework to Spot Strategic Customer Segments

Consultants love models and frameworks, and nothing is better than a four-box model.  And this is true in a recent publication by London Business School regarding segmenting strategic customers.  The article starts with defining four mistakes that companies make when it comes to evaluating their customers, markets and products: -

1.  Concentrating on bad growth – as some revenue is just not worth chasing

2.  Loving your product too much

3.  Recognising, but then ignoring problems

4.  Failing to understand the structure of an industry

The article then goes on to describe a four-box model to categorise your strategic customers.

Unrivalled As – These are your star customers: they love you, you love them. Regrettably, we often don’t spend enough time focusing on this group. Time is well spent protecting them, making sure you understand their needs and developing solutions. 

Unproductive Bs – These customers love you, but are a waste of your time. Your salesforce might find this group easy to sell to, but have you looked closely at their profitability? 

Unreachable Cs – This group is of great potential value and you’d love to serve them. Unfortunately your proposition doesn’t attract them. The question here is: what could you do to bring them into your top-right box?

Undesirable Ds  – These are the customers who don’t like you – and you don’t like them. However, when new entrants establish a foothold here, they may become direct competitors later. If you don’t pay attention, you can allow your rivals to reach a much stronger position to attack your other customers. 

A framework to hopefully help you make better decisions.

Comments by Mary Sue Rogers

Posted On : 25-10-16

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