Wednesday, December 4, 2013

SG Sales Guru: Product Segmentation - Who Moved the Cheese?

SG Sales Guru was engaged earlier this month by a real estate investment company to provide strategic counsel on their sales and marketing strategy.

In order to better understand the client's sales processes and the buying motivations of their target market, the SG Sales Guru team spent two weeks observing the company going through its paces. Our consultants even did ad hoc sales focus groups with past, existing and non-clients (those who attended the company's preview talks but did not buy) to understand what buyers wanted.

With the data in hand, we then matched the company's current product range with the buyers' needs. The startling discovery was that while the market had changed (due to new government regulations) creating 4 distinct market segments, the company had not picked up on this and continued to offer a one size fits all product. Not surprisingly, sales returns per dollar spent was extremely low with many potential clients not buying simply because they did not want to pay for services they do not need.

Our recommendation to the client was simple. Repackage the existing range to fit the new segments and, where necessary, create new product lines. With this new approach, we believe that the company will be able to capture all the segments instead of only those that needed the full package.

The 2 key lessons from this example are:

A.  Market segments are not constant. Macro factors can impact segments and make them obsolete overnight. It is thus important for companies to regularly study their target markets and make the necessary adjustments to their sales and marketing strategy.

B. Sales is not only selling, but also about information gathering. By constantly reviewing sales performance and analysing trends, sales professional are best positioned to sense the changes and inform senior management.

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If you are having problems with your company's sales and marketing, visit our online Sales  Training Clinic.  Ask us a question and we will prescribe the "medicine".

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