1. Account Segmentation The Sales Operations Guide
to Account Segmentation

2. Segmentation deliverables
Definition
Total Available Market
Understand the total revenue opportunity for the products and services.
Competitor Analysis
Understand how your competitors market and sell.
Strategic Market Group Assessment
For the market groups, understand their needs, how these needs are changing, which competitors are targeting them, and how you are positioned to service each group of the market.
Product/Market Mix Assessment
Determine the go to market strategy by choosing from the alternatives including: market penetration, market development, product development, diversification.
Market Distribution Strategy
Determine the optimal route(s) to market for products and services
Sales SWOT
Determine the internal Strengths/Weakness and external Opportunities/Threats of your go to market strategy.  Alter the go to market strategy as required to leverage the Strengths/Opportunities and avoid the Weaknesses/Threats.
Marketing SWOT
Determine the internal Strengths/Weakness and external Opportunities/Threats of the marketing strategy.  Alter the marketing strategy as required to leverage the Strengths/Opportunities and avoid the Weaknesses/Threats.
Sales Life Cycle Assessment
Assess customers against the sales life cycle phases of Introduction, Growth, Maturity, Decline.  Alter the go to market strategy to optimize it based on the phases.
Product Life Cycle Assessment
Assess your products or services against the product life cycle phases of Introduction, Growth, Maturity, Decline.  Alter the marketing strategy to optimize it based on the phases.
Total Available Market- the total revenue opportunity for a product or service.
Competitor Analysis- an understanding of how your competitors market and sell.
Strategic Market Group Assessment- for each group of the market, understand their needs, how these needs are changing, which competitors are targeting them, and how you are positioned to service each group of the market.
Product/Market Mix Assessment- for each market group determine the go to market strategy by choosing from the four alternatives: 1- market penetration, 2- market development, 3- product development, 4- diversification.
Market Distribution Strategy – for each product or service, determine the optimal route(s) to market
Sales SWOT – For each market segment, determine the internal Strengths/Weakness and external Opportunities/Threats of your go to market strategy.  Alter your strategy as required to leverage the Strengths/Opportunities and avoid your Weaknesses/Threats.
Marketing SWOT – For each market segment, determine the internal Strengths/Weakness and external Opportunities/Threats of your marketing strategy.  Alter your strategy as required to leverage the Strengths/Opportunities and avoid your Weaknesses/Threats.
Sales Life Cycle Assessment – Assess your customers against the sales life cycle phases of Introduction, Growth, Maturity, Decline.  Alter your go to market strategy to optimize it based on the phases.
Product Life Cycle Assessment – Assess your products or services against the product life cycle phases of Introduction, Growth, Maturity, Decline.  Alter your marketing strategy to optimize it based on the phases.
9/22/2018

3. Example Account Segmentation Output and Metrics Impacted
Purpose: Knowing Ideal Customer Profiles and customer / prospect segments and their relative size, sales and all support functions can concentrate their efforts on those with the greatest likelihood to buy.
Application: Sales and sales management are better able to prioritize upsell, cross-sell and new acquisition activities. Sales Ops can optimize territory designs, compensation plans and quotas, account assignments and resource allocation. Marketing will more effectively deliver content targeted to these high value customers and prospects. Product can more accurately determine who to target in the development of products and services.
Caveat:
Without Account Level segmentation, you will not achieve these results.
Example Account Segmentation Output and Metrics Impacted
Ideal Customer Profile – Clearly defined ICP for targeted nurturing, messaging and field sales priority
Market Potential – Customer level Upsell/Cross-Sell and prospect potential revenue for priority and resource allocation
Customer Share of Wallet - % of total customer frontier potential spent
Quota Attainment - % of sales reps who achieve annual quota
Headcount ROI – Net profit in dollars per sales headcount as % of all sales related costs
Marketing Lead Quality - % of all qualified leads delivered by marketing resulting in a won opportunity
Sales Win Rate - % of all opportunities resulting in a win

4. Ideal Customer Profile (ICP)1
Capture existing transactions by product / solution sets
End-User Customer Name
Vertical
Sub-Industry
Annual Revenue
Product Set “A”
Product Set “B”
Product Set “C”
Aero-Dyne
Mfg.
Aircraft
$3,088,157
$617,806
 $0
$210,439
Tractors Corp.
Farm/Agricultural Equipment
$1,660,642
$876,746
$118,162 $0
Mega Soda, Inc.
Food/Beverage
$8,660,642
$297,310
$27,801
$2,764,694 2
Enrich with 3rd Party Firmographic data
End-User Customer Name
Sub-Industry
Annual Sales Revenue
Global Employee Count
Asset Value ($ M)
Warehouse & Fabrication Space (Sq. Ft.)
Aero-Dyne
Aircraft
$81,698
174,400
$88,897
3,720 M
Tractors Corp.
Farm/Agricultural Equipment
$37,795
66,900
$59,522
1,450 M
Mega Soda, Inc.
Food/Beverage
$48,017
150,900
$86,175
620 M

5. IDEAL CUSTOMER PROFILE (ICP)3
Conduct correlation and multiple regression analysis to identify attributes that best predict spend and opportunity
Which variables are most closely related to total customer spend?
Which are most predictive of spend by product / solution sets?
How do we use this insight to build the model?

6. Using variables with highest returned multiple R value
DETERMINE UP-SELL/CROSS-SELL 4
Using variables with highest returned multiple R value
Use the 80th Percentile Customer Spend:
Per $M in organizational revenues
Per Employee
Per $M in organizational asset value
Apply 80th Percentile to all customers within distinct sub-industries to determine achievable spend
Calculate difference between current actual spend and total potential to arrive at Up-Sell and Cross-Sell opportunity by customer

7. DETERMINE PROSPECT POTENTIAL
Prospects by sub-industry that are not currently spending are identified based on how closely they “mirror” existing “Ideal Customers
Based on segments created previously, estimated spend is assigned based on matching firmographics 5

8. Activate at field level6
Distribute account-level potential to the sales organization
Up-Sell, Cross-Sell and Prospect potential at account level
Distributed to rep level with clear expectations communicated to all
Used as the basis for prioritization, one-on-one coaching opportunities and comparative performance

9. Total Market Potential
Account-based marketing
Demand Generation, Lead Management & Sales Process
Total Market Potential
Quota Setting
Compensation
Account Prioritization & Coaching
Talent Management
Territory Design