What
The Customers we serve are often very different and have specific strategically branded positions in the market, providing a range of unique categories, products, brands and services to their shoppers. When we analyse our local, regional and international Customers their differentiated positions in the market become clear. Our Customer base cannot be served in the same way, these varied Customers require unique strategies and services from us. By analysing each Customer’s commercial attractiveness, our performance and understanding our ability to compete, we can make prioritised Customer portfolio and investment choices.
Why
Understanding the role of and priorities in our Customer portfolio is critically important. It provides us with a fact based perspective on the priority Customers, their relative importance and what it will take for us to succeed with these Customers. It informs our investment choices ( i.e. people, financial, services ) and ensures our team are fully aligned to win.
How
There are many ways to segment our key Customer base. The following will provide useful inputs to allow us to segment our Customer portfolio:
Key Customers performance?
- Size, volume and value
- Growth
- Commercial attractiveness to our business
Our Performance in each key Customer?
- Size, volume and value
- Growth
- Share of market and category
- Numeric and weighted distribution
See: How to evaluate peformance in my Customer
Our ability to compete in each key Customer?
- Category share
- Our degree of differentiation
- Rate of innovation
- Numeric penetration
- Contribution to the customers margin (CTM)
- Strategic fit
The attractiveness of the key Customer to the market and our business?
- Size, volume and value
- Share of market and category
- Growth in market (<3yrs and >3yrs CAGR)
- Category value and volume development (<3yrs and >3yrs CAGR)
See: How to complete a Customer attractiveness analysis
We assess each key Customer so that we can then make an informed choice about the key Customers priorities. Our assessment is based on the Customers’ attractiveness, our performance and our ability to compete. It is useful to create a “map” of our Customers in two ways:
- Customer attractiveness vs. our ability to compete
- Customers attractiveness vs. our performance
The insights we gain help us to segment our Customers and inform our strategic intent and investment choices, which could include the following:
- Customers requiring heavy investment to strengthen our competitive position – focus & invest in these Customers
- Customers in which we can fully explore our position – focus on these Customers but take care making investment choices if our ability to compete is low
- Customers where will maintain our position – do not focus on these Customers but look for quick ways to improve
- Customers where will participate – do not focus on these Customers
In addition, segmenting our Customer portfolio informs our Customer approach strategy where we classify our Customer portfolio based on our engagement approach, from tactical ( Basic Selling ) to strategic (Value Partner ):
See: How to define our Customer engagement approach
