This document outlines 7 steps to effectively design and implement customer segmentation in a CRM system. The steps are: 1) Identify business needs, 2) Rank needs by impact, 3) Design segments based on highest priority needs, 4) Test segment usability with salespeople, 5) Implement segments in the CRM, 6) Educate sales teams, and 7) Ensure data consistency. Following these steps helps create a customer segmentation that provides valuable information to marketing and sales teams.

1. ©GunnarSchröder2016
by Gunnar Schröder
Accelerate your
Sales Performance
To make CRM customer
segmentation really work
7 Steps

2. ©GunnarSchröder2016©GunnarSchröder2016
7 Steps
to make CRM customer
segmentation really work
CRM Customer segmentation is a key
topic for marketing and sales. However
many segmentations practically
do not work very well as they are
oriented rather on the technical
possibilities than on the real needs.
The following presentation will give you
practical tips on how to design a
customer segmentation effectively.
Resulting in valuable information which
can be really used by
marketing and sales.
Gunnar Schröder, April 2016
Accelerate Your
Sales Performance

3. ©GunnarSchröder2016
Content
7 steps to make CRM customer
segmentation really work
Step 1 - Identify
your needs
Step 2 - Rank
by impact
Step 3 - Design
Segments
Step 4 - Test
usability
Step 5 - Implement
in CRM
Step 6 - Educate
your team
Step 7 - Ensure
consistency
Accelerate Your
Sales Performance

4. ©GunnarSchröder2016
Step 1
Identify your needs.

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Identifyyourneeds.
Customer segmentations should be as
simply as possible. Therefore the
best way to separate cool ideas from
real needs is to collect from all
stakeholders real used cases.
Stakeholders include sales, service,
marketing, product marketing,
business development, executives,…
Please refer to Annex 1 for typical
stakeholder desires.

6. ©GunnarSchröder2016©GunnarSchröder2016
Identifyyourneeds.
Make sure you ask
o In which used cases would you
practically use customer
segmentation data ?
o What improvement you would
like to achieve with the customer
segmentation in this used case
compared to todays situation ?
o What measurable output you
can create in this used case by
applying the customer segmentation
?
o How often do you perform the
used case ?
o Do you really have the
resources to perform the used
case ?

7. ©GunnarSchröder2016
Step 2
Rank by impact.

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Rankbyimpact.
When you have your collection of used
cases, rank them according to their
impact/business importance. The
answers to the questions above about
“improvement” and “measurable
output” will support you to to rank
the used cases based on
rational criterion.
As this step is fundamental for the
further proceeding please make sure to
involve all relevant
stakeholders in a workshop.
This ensures that everybody has the
same understanding about the
priorities and is supporting the
outcome.

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Step 3
Design segments.

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Designsegments.
Start with priority 1 used case
and develop a workable segmentation
before going to lower priority items.
For an efficient idea collection process
I recommend to constantly raise
the questions on the next page to
eliminate irrelevant segments from the
start.
Please refer to Annex 2 for
segmentation examples.

11. ©GunnarSchröder2016©GunnarSchröder2016
Designsegments.
Questions to ask
o Is the group defined by a segment
really relevant from business
point of view and would justify a
dedicated marketing/sales approach
?
o Is there is no misunderstanding
possible about which customers
belonging to this segment ? Make
sure to formulate a clear description
that defines the segment.
o Is this segment really different
compared to others considering your
products and services you provide
and the used case you want to serve
?

12. ©GunnarSchröder2016
Designsegments.
Questions to ask
o Is it really easy to get this
information ?
Consider the normal sales process
and evaluate if this information is
available at the time you want to
have it.
o Can I use available data to
define the segment ?
An application might be clearly
linked to a specific product. In this
case it is much more wise to make
the product sold/offered to the
segment identifier rather then to
leave the segmentation to the sales
force.
o What is the suitable customer
hierarchy level ?
Like company, department, contact.

13. ©GunnarSchröder2016
Step 4
Test usability.

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Testusability.
At this time point you should run a
workshop with selected sales
people to make a proof of concept.
Train them on the segment
definitions.
Test practical customer
examples against the segment
definitions and collect potential
problematic cases.
Use this occasion also to check the
CRM templates in terms of
usability. There will be always
complaints but you can soften the
negative power significantly if you
involve sales people at an early stage
of the implementation

15. ©GunnarSchröder2016
Step 5
Implement in CRM.

16. ©GunnarSchröder2016
ImplementinCRM.
If you are serious about your
segmentation, then any segmentation
field in CRM should be a duty field.
You can set conditions which are
enforcing a segmentation.
E.g. quotation creation is only possible
before having ticked the segmentation.
As your segments at the end will most
probably not cover 100% of your
customers you might need to add a
customer category “I’m sure this
customer does not belong to any of the
segments”. I would clearly avoid to
use the term “others” as it is too
easy to tick this as a default.
©GunnarSchröder2016

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Step 6
Educate your team.

18. ©GunnarSchröder2016
Educateyourteam.
Training is key if you want to ensure
that people entering customer
segmentation data are doing it the way
you intended. An e-mail is not
sufficient.
I recommend that you explain the
background. Get a common
understanding about the used cases
which will be processed based on the
customer segmentation and what the
expected output is.
Especially make sure that you are not
performing this training only once but
that every newcomer is getting a
first hand training.

19. ©GunnarSchröder2016
Step 7
Ensure consistency.
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Ensureconsistency.
For any segmentation I recommend to
have a clear process in place to
approve new customer entries.
This best works if this authority is in
the hierarchy higher then the
employees responsible for entering the
segmentation data.
I would recommend to have this
function in sales management.
Alternatively the CRM content manager
or the sales back office could also do
the validation.
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21. ©GunnarSchröder2016
Hope You got
some Inspiration
Need More ?
Information, Consultancy, Seminars.
Please contact me at:
Gunnar Schröder
+41 76 748 34 93
Gunnar.Schroeder@bluewin.ch

22. ©GunnarSchröder2016
Annex

23. ©GunnarSchröder2016
Annex 1
Stakeholders and their Desires
Marketing/Service Marketing
Most customer segmentations are not only
initiated by marketing but they are also
usually the group with the most relevant used
cases. For marketing purpose you usually
want to address messages to specific
customer groups with the target to make lead
generation more effective.
Sales/Service Sales
Sales needs a tool to quickly target/select
customers for a specific sales activity. Sales
usually does not expect to get the perfect list
but they simply looking for a tool to make
their customer selection process more
efficient.
Product Marketing
Product marketing needs information to
prioritize product developments and initiate
market researches. But often the data
required can not be collected effectively by
CRM as the desired data is changing from
project to project.
Executives
Executive are usually looking for financial
segments at a very high level. And often the
only way to collect such information is in
CRM. Therefore when you design
segmentation make sure you don’t overlook
this group of people in your company.
Business Development
Business development is looking for
business trends to identify potentials and set
activity priorities. In addition business
development is eager to have relevant
information to support strategy design.

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Annex 2
Segment Examples
Buying behavior
o Average annual purchase volume.
o Purchase date of the product.
Buying influence type
o Technical advisor
o User
o Economic
Where the money comes from
o Private
o Public
What customers do
o Industry segment they are operating in
(can be automated with SIC/NAIC
coding).
Why/How customers use your
product
o Application the customer use the
products for.
o Process they are using the product in.
What product they are using
o Products/services they are using.
o Product technology they are using (can
be retrieved from ERP if Product groups
are established accordingly).