On Friday 22 November 2013 in Stockholm, Implement Consulting Group once again invited the members of the Commercial Excellence Forum to an event of inspiration and discussion with peers. This time focus was on segmentation – and how segmentation and a better understanding of customer needs and behaviour is a foundation for a more clear differentiation and effective sales approach. Sebastien Leichtnam talked about his experience in managing sales development within Tetra Pak Technical Service and explained how Tetra Pak has grown their business through the development of segment-specific offerings and services. Tetra Pak has developed a customer segmentation model which is built on customers’ operational maturity as well as their willingness to outsource.

1. ComEx
Segmentation, Value
Proposition &
go-to-market approach
The core elements of a company business model
2013 – Commercial Excellence Forum

2. Agenda
Friday, 22nd November 2013
09:00 - 09:05
Welcome and introduction
09:05 - 09:20
Strategic market segmentation as the platform for differentiation
09:20 - 10:00
Case: Tetra Pak’s customer segmentation model
- Keynote speaker Sebastien Leichtnam, Tetra Pak
10:00 - 10:15
Inspired by the case : How do you ensure an effective use of
customer segmentation?
10:15 - 10:30
Short break and networking
10:30 - 11:30
Segmentation as a tool for prioritization
– Exercise in groups
11:30 - 11:45
Summing up the ComEx Forum event
11:45 - 12.30
Networking and refreshments
2

3. Commercial Excellence Forum – Events in Stockholm 2013/2014
Facts about Implement Consulting Group
Planned events in Stockholm
• Established in 1996
• 22nd of November 2013
Segmentation – a strong foundation for
improved differentiation
• 400 employees, more than 370 consultants
• Helps clients in Scandinavia, both private
and public, from our offices in
Copenhagen, Stockholm and Oslo
• 21st of February 2014
• Value proposition – how to increase
competitiveness
• Leading consultant company in
Scandinavia within business
transformation
• 30th of May 2014
From customer insights to business growth
• 20% CAGR since 1996
• More events during Fall 2014 to follow
• Turnover +700 million SEK 2012/2013
3

4. Most companies have ambitious growth targets - combined with and
increasing complexity in their business model
Geography
Areas of use
• Processing
• Residential
• Denmark
• Northern Europe
• Southern Europe
Customer size
• Large
• Medium
• Small
Products/solutions
Sector of use
• Solutions
– Family houses
– Office buildings
• Service
– Interior design
Channels
• Retail
• Production
•
•
•
•
•
4
B2B
B2C
Direct
Specifiers
Entrepreneurs
4
Service offering
Competencies
•
•
•
•
R&D
Procurement
Production
Sales
• Products
• Solutions

5. We need to look at the situation from different perspectives…
5
5

6. …but at the same time make sure that we have a common focus
6
6

7. The agenda for the day
1
Market- and Customer Segmentation (CS)
2
Value Proposition (VP)
3
Go-to-Market approach
CASE
+
7

8. Successful companies have a business model focusing on delivering
superior value to selected customers in the most effective way
Value proposition
Go-to-market approach
Segmentation
3. Customer Relationship (CR)
Target communication and relation building
to chosen focus segments and customers
VP
2. Value Proposition (VP)
Definition of our unique and
defensible differentiators and
potential value creation for our
segments and customers
CS
1. (Market)/Customer Segments (CS)
Identify and prioritise relevant market
and customer segments and
determine needs and offerings
CR
CH
4. Channels (CH)
Efficient delivery
of value to chosen focus
customers?
8

9. Market- and Customer segmentation should help target the right
customers, but it does not always bring the indented value
Why Segmentation
Common Obstacles
• Companies try to use one segmentation model
for all purposes
Market- and Customer Segments defines a number
of different groups of people or organizations,
which a company aims to reach and serve
• Companies have multiple segmentation models
without a clear and consistent link
• Companies base the model on data at hand
rather than what is necessary to make the insight
relevant
The intent is to create the foundation for…:
• … a relevant value proposition
‒ With products matching customers needs
‒ With adjusting pricing and discount schemes
‒ With service offerings attracting and keeping the
relevant customers loyal
•
• The management is not aligned on what drives
and what describes the market
• Companies are letting the complexity of a few
key clients interfere with a simple market view
• The purpose of the segmentation is "lost in
translation" when executed on an operational
level
… an adjust the go-to-market approach in order to:
‒ Utilize the best use of a multichannel approach
‒ Optimize sales efforts across the full customer
journey
‒ Align marketing and messaging toward our target
customers
10

10. Segmentation has three distinct purposes which needs to be
addressed individually but understood coherent within each brand
3 segmentation levels
Main questions
•
Strategic
market
segmentation
Purpose
What are we selling
and to whom?
•
Where to grow?
•
1. Understand the market landscape of our business
2. Evaluate where we are doing business
3. Identify & prioritize attractive market segments
Who is our primary
market segments?
Tactical
customer
segmentation
Operational
customer
classification
11

11. The strategic market segmentation will help our clients define
who their target segments are thereby where to grow…
Game board
Prioritisation matrix
“How do prioritise our resources?”
Operational
High
Market attractiveness
ROI
What are we selling?
Tactical
Strategic
“What are we selling to whom?”
Med
Low
To whom or where?
Low
Med
Competitive position
12
High

12. Case:
Service Segmentation
Sébastien Leichtnam
Service Sales Development
PBH/2012-10-12

13. Based on numerous projects, ICG has distilled 7 ”key learning” which are
critical in developing and implementing a successful segmentation
Key Learning's
Top management attention is instrumental – take part in the
process, take interest in the opportunities by demonstrating
passion for winning
Focus on describing the strategy
for each segment including targets,
value proposition, channels,
resources, activities etc – and
thereby what we need to do
differently across segments.
Strong focus and
measurement of the change
in behaviour as well as the
business impact is critical to
ensure both focus and
motivation
1.
Make it top
management
relevant
7.
Focus on
segment
strategies and
consequence
s
7 key
learnings from
segmentation
projects
6.
Measure
impact and
change on
segment level
– from day 1
Start using the segmentation
model as soon as you have
a valid draft in order to start
changing behaviour
2.
Let
commercial
management
drive
5.
Roll-out
before you
are ready
3.
Involve early
and broad
4.
Keep it
simple and
operational
14
Sales and Marketing managers are
key in making a useful
segmentation model - hence, they
need to front the process and be
active in developing the model
Input to the structure and content
should be developed as co-creation
with both Sales and Marketing as
from both corporate and
subsidiaries to ensure highest level
of innovation power as well as full
buy-in
Not all issues can be solved by segmentation.,
To ensure impact the purpose needs to be clear
and it needs to be operational useful for both
Sales & Marketing

14. Customer segmentation ensures insight about your target customers
and how to differentiate within the prioritized market segments
3 segmentation levels
Strategic
market
segmentation
Tactical
customer
segmentation
Main questions
Purpose
•
Where to grow?
•
Who is our primary
market segments?
•
What are the needs of
our primary segments
•
What to offer our
target segments?
1. Understand the market landscape of our business
2. Evaluate where we are doing business
3. Identify & prioritize attractive market segments
15
1. What are the needs and drivers for our customers?
2. What are the characteristics of the valuable
segments?
3. What are the criteria they make their purchases by?
4. What are their average basket and yearly spend?

15. Insight in customer needs makes it possible for us to
identify the right actions and target the execution
Tactical segmentation levels
Define
Actions
Needs…
• Needs are the customer’s
motivation to buy any product
or service
• Needs based segmentation
set the direction of any
business development
Needs
Behaviour
$
Behaviour…
• Behaviour like buying
frequency and size of receipt
help us understand the market
dynamics and how far we
have come
Demographics
Target
Execution
Demographics…
• Demographics and socio
demographics help us
describe the target group(s) in
general terms
Actionable
16

16. There are many customer segmentation methodologies –
but we work with four key methodologies
Operational
End
High
Line of balance
Need
based
Potential
value creation
Tactical
Strategic
Tactical segmentation levels
The optimal segmentation level
and method strikes a balance
between:
• Customer insight
How much resources do we
need in order to get customer
insight?
Behavioural
Start
Start
• Potential value creation
How is our ability and
prerequisites for using the
customer insight
strategically?
Value
based
• Understand needs as the
basis for demographics,
value and behaviour
Demographic
End
Low
Low
High
Customer
insight
17

17. There are many customer segmentation methodologies –
but we work with four key methodologies
Tactical segmentation
Need based
segmentation
Tactical
Behavioural
segmentation
Value
based
segmentation
Criteria
• What are the customers
perceived and unknown
needs across the
customer journey
Awareness
&
Evaluation
Usage
& rebuy
Before
• How does the
customer act across
the customer journey
Consideratio
n & purchase
During
After
• Turnover
• Margins
• Loyalty
• Age
Demographic
segmentation
• Income
• Revenue
• Gender
• Education
• Employees
• Sector of business
B2B
• Geography
• Life stage
B2C
18

18. Customer insight is the driver for both customer segmentation
and building your value proposition
Customer buying criteria
Value Proposition mapping on needs
Strategic
Prerequisites - Qualifiers
Assortment
Delivery
Focus drivers & Differentiators
• Understand the needs (Key Purchase Criteria’s – KPCs)
• Align with Customer Promise (Input to the Cust Value Proposition CVP)
Potential gaps in
customer promises
Importance
Coverage
Tactical
Styles
Branding
CP1
CP2
CP3
CP5
Determinator
Indifferent customer
promises
Price
Operational
CP4
Qualifiers
Focus & Diff
Non
competitive
Customer drivers
(needs)
Determinators
Customer Promise
19

19. Bringing knowledge from the strategic segmentation about who your
target customers are next step is to identify needs and prioritize
3 segmentation levels
Main questions
Purpose
Tactical
customer
segmentation
Operational
customer
segmentation
•
Where to grow?
•
Who is our primary
market segments?
•
Strategic
market
segmentation
How to differentiate
within the prioritized
market segments?
•
What to offer our
customer segments?
•
1. Understand the market landscape of our business
2. Evaluate where we are doing business
3. Identify & prioritize attractive market segments
1. What are the attractive customer segments within
the prioritized market segments?
2. What are the characteristics of the valuable
segments?
3. What are the criteria they make their purchases by?
1. Which customers are most attractive to our business
model?
2. What are the size/value of our customer segments
3. How do we service our different customers?
4. How do we differentiate our products and services
Who to call &
who to visit?
20

20. Within the prioritized market segments the operational
segmentation should help our client prioritize…
Operational segmentation
Strategic
100
100
20
Operational
Tactical
80
• What is Red and what is Grey?
• And what does it mean to our clients?
80
20
21

21. The operational segmentation help prioritization of time and resources
and understand what to offer to who at what price/discount level
Time and value
Strategic
100
100
20
Operational
Tactical
80
• So how to understand where to use their
time and resources?
80
20
Time
Value
22

22. What are the relevant element in order to prioritize and
understand where to use their time and resources?
Exercise # 1
Directions:
• In the segmentation tool please consider what could
be relevant elements in prioritizing target customers
• One note for each criteria
• Write a card for the different dimensions you find
relevant to prioritize and add to the segmentation
tool.
23

23. The operational segmentation help prioritization of time and resources
and understand what to offer to who at what price/discount level
Time and value
Strategic
100
Classification model
100
Customer
Profitability
Customer
Loyalty
20
Bronze
A
Silver
Gold
A
B
C
Tactical
80
A
B
B
80
C
A
Operational
C
20
C
Time
B
Black
(Standard)
Value
24
C
B
A
Customer
Value

24. Tool for creating an overview of customer segments
Tool for mapping Customer Segments and Customer Relations
V. New criteria
IV. Brand Loyalty
III. Potential
II. Revenue
Customer
I. Type of customer
Segmentation
criteria’s
Operational consequences
and next question
1
Customer rating
TOS 12
Business Partner
TOS 23
Key Account
TOS 34
Gold
TOS 45
- What does it require to succeed?
Silver
25

25. The agenda for the day
1
Market- and Customer Segmentation (CS)
2
Value Proposition (VP)
3
Go-to-Market approach
CASE
+
26

26. Value Proposition
A Value Propositions describes
the bundle of products and services that create
value for a specific Customer Segment
CH
VP
CS
CR
27

27. The Value Proposition is about bundling the products and
services that create value for a specific Customer Segment
Value Proposition
Rationale
•
•
CH
VP
The Value Proposition is the reason why customers turn to one company
over another.
The Value Proposition solves a customer problem or satisfies a
customer need.
•
Each Value Proposition consists of a selected bundle of products and/or
services that caters to the requirements of a specific Customer Segment.
CS
CR
Create Value Proposition
• Bring together the bundle of benefits
that a company offers its customers
Benchmark Value Proposition:
• Understand competitors main
strengths in relation to VP
• Understand own differentiations
towards customer & consumers
28

28. The foundation for organic growth, is a strong value
differentiation which is perceived valuable by the customers
The components of strong Value Differentiation ...
Valuable
“I want” & “I need”
+
Differentiated
“No alternatives are as good”
+
Substantiated
“I trust” & “I believe”
…which creates the foundation for ...
•
•
•
•
•
...is the basis for closing the value perception gap…
SELLER
Value Proposition
DECISION TO SELL
Value
perception
gap
CUSTOMER
Value Perception
DECISION TO BUY
29
Premium pricing
Lead generation success
Loyalty
Sales growth
Market Share Growth

29. Unique and defensible differentiators can be identified at
different levels …
Effect & impact
Defensible differentiators
Potential
Effect
High
ROI
Key defensible
differentiators
Game
changers
Value to the
customer
(fulfil needs)
New
offerings &
services
Existing
offerings &
services
Low
Change
impact
Low
30
Uniqueness
(differentiate)
High

30. How well are you connected to your customers?
How loyal are
your customers?
31
31

31. How well are you connected to your customers?
32
32

32. You get loyal behaviour, when you deliver
better than your competitors on the
customers most important needs…
”Loyal behaviour is the consequence of meeting the customer’s needs.
Loyalty and satisfaction are both symptoms – not the cause”
33

33. The value curve can be used to design the customer
experience
Finding the Consumer value Curve
… BY REDUCING COST
ON BASIC NEEDS
INCREASE VALUE
ON CORE NEEDS
High
Customer
rating of
performance
on needs
IF RELEVANT INCREASE
VALUE
ON LESS IMPORTANT NEEDS
Low
Most important
Less important
Customer ranking of needs
34

34. Customer insight is the driver for both customer segmentation
and building your value proposition
Company and competitor performance
1. Understand needs (drivers of the customer purchase)
1. How does this match
2. Understand the market performance (Need fulfilment)
2. Understand the market performance (Need fulfilment)
3. Understand own (company performance) and competitors
3. Understand own (company performance) and
competitors
Importance
Qualifiers
Focus & Diff
Not fulfilled
Customer drivers
(needs)
Company ranking
Fulfilled
Non competitive
Competitor A
35

35. Tool for creating an overview of customer requirements
Tool for mapping Customer Segments and Customer Relations
Customer
requirement
D
E
F
G
H
via web-shop
Sell-out
C
Sell-in
B
Sell-out
x
x
x
x
x
x
x
x
(x)
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
B
C
D
E
Customer rating
TOS 12
Business Partner
x
x
x
x
x
TOS 23
Key Account
x
x
x
x
TOS 34
Gold
x
x
x
TOS 45
Silver
x
x
36
F
1
A
V. New criteria
IV. Brand Loyalty
III. Potential
Company
requirement
2
A
2
Sell-in
II. Revenue
Customer
I. Type of customer
Segmentation
criteria’s
(x)
(x)
x

36. What is the relevant VP?
Exercise #2
Directions:
• On the segmentation tool, please identify the relevant
Value Proposition for your customers
•
Write a post-it for each relevant element within
1.
Customer requirements and
2.
Company requirements
37

37. The agenda for the day
1
Market- and Customer Segmentation (CS)
2
Value Proposition (VP)
3
Go-to-Market approach
CASE
+
38

38. Go-to-market approach
The Go-To-Market strategy is the mechanism to deliver your
unique value proposition to the target customer segments –
It is a component of HOW the firm will make it happen.
Customer Relationships describes the
interactions a company establishes with
specific Customer Segments in order to
deliver the Value Proposition
Value propositions are delivered to
customers through communication,
distribution and sales channels.
CH
VP
CH
CS
VP
CS
CR
CR
39

39. Customer relationship are linked to the segmentation in order to
understand the cost and integration with the business model…
Tool for mapping Customer Segments and Customer Relations
TOS 23
Key Account
x
x
x
x
TOS 34
Gold
x
x
x
x
TOS 45
Silver
(x)
x
x
TOS 56
Bronze
x
x
42
F. Co-creation
D. Automated service
x
Customer rating
E. Self-service
C. Community
x
V. New criteria
x
IV. Brand loyalty
x
III. Potential
Business Partner
II. Revenue
TOS 12
Customer
I. Type of customer
B. Team assistance
Customer
relations
A. KAM
Segmentation
criteria’s
Aligning the interaction model
with the customer segments in
order to create as much value as
much, while still making sure that
this is profitable

40. … and must be aligned with value proposition and channels in
order to create the customers go-to-market strategy
Tool for mapping Customer Segments and Customer Relations
3 +
Customer
requirement
Sell-in
C
D
E
F
G
H
via web-shop
Sell-out
B
Sell-out
x
x
x
x
x
x
x
x
(x)
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
B
C
D
E
Customer rating
TOS 12
Business Partner
x
x
x
x
x
TOS 23
Key Account
x
x
x
x
TOS 34
Gold
x
x
x
TOS 45
Silver
x
x
TOS 56
Bronze
x
43
F
1
A
V. New criteria
IV. Brand Loyalty
III. Potential
Company
requirement
2
A
2
Sell-in
II. Revenue
Customer
I. Type of customer
Segmentation
criteria’s
Go-to-market
approach
4
(x)
(x)
x
x

41. Challenges can lead to success or failure
Success seems to be connected
with action. Successful people
keep moving. They make
mistakes, but they don't quit.
Konrad Hilton
(Founder of Hilton hotel chain)
44

42. Contacting Implement Consulting Group
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