Who is part of your customer base? Are you getting all the potential out of your current customer portfolio? Do you know who is responsible for what turnover? These are all questions you should ask yourself when evaluating and optimising your customer portfolio. Not quite sure how to start? Then this blog article might be for you.
What do we mean by customer portfolio?
A customer portfolio is actually the classification of your customer base or database. This database gives you quick and easy access to all your customers’ data. We also know this type of database by the name of CRM or Customer Relationship Management System. The purpose? Save time and maintain an overview of your customer relationships so that you can utilise all their potential and build strong relationships. But how do you get started?
Collecting customer data?
Collecting data is the most normal thing in the world. Just think of all the loyalty cards you have. No one really thinks about it, but many companies offer them. When companies ask you if you would like to receive a loyalty card, they are actually asking if it is ok to include your details in their customer database. This data is then used to carry out targeted campaigns or to inform you about products that might interest you.
In the B2B sector, loyalty cards are less common, but the concept of collecting data in order to provide targeted information is also very important here. This data is often collected from the data available on the order forms. But what is the data that is included in this file? Below is a small list:
- Name
- Address
- Telephone number
- E-mail address
- Sector in which the customer is present
- Direct contact person within the company
- Order history
- Possible interests of the customer
- Possibly number of contact moments (visits, phone calls, …)
In order to keep track of all this in a well-organised manner, companies often use a CRM system.
What is a CRM system?
CRM or Customer Relationship Management System is a programme/tool that allows you to keep an overview of all your customer data and manage them in a quick and easy way. It also allows the user to perform analyses on this data and thus helps you to get all the potential out of your customer portfolio.
Why segmenting your customer portfolio is important.
Ask yourself: who is in my customer portfolio and what percentage of my turnover is accounted for by them? No idea? Well, that is a first important reason to segment your customers. By dividing your customers on the basis of characteristics determined by you, you may find hidden potential. You can then also link certain conditions to each segment, such as payment term, delivery term, procedures, etc. This way, you approach each segment in a different, specific way, allowing you to build stronger relationships.
What are the benefits of good segmentation?
Good segmentation brings a range of benefits. I would be happy to go through some of them with you.
Personal approach and focus on your most important customers.
You have probably heard of the 80/20 rule. 20% of your customers are responsible for 80% of your turnover and the other 80% are only responsible for 20% of your turnover. This is an estimate and can of course vary somewhat for each company, but the main idea remains. There is a small proportion of your customers who generate a large proportion of your turnover. These are the customers who belong to your highest segment and the ones you would like to maintain a strong relationship with. The time you spend on smaller customers will be reduced because you will have a good overview of all your customers and their degree of importance.
You develop expertise per segment.
It may be a cliché, but by delving into your customers and dividing them into certain segments, you will develop a certain expertise that you can use with customers from the same segment. If you know why a certain sale went well with a customer from that segment, you can apply the success factors from this to similar customers.
Achieving (additional) sales is easier.
Because you use your time efficiently and follow up customers in the right way, it becomes easier to realise an (extra) sale. You build up trust so that an existing customer is more likely to sign up again or for something extra. This happens by itself without you having to put much pressure on them.
More time to find new customers through prospecting.
More free time, now what? This is the perfect opportunity to prospect and contact new potential customers. Take the time to analyse these prospects and make sure that quality leads come from them.
Costs are being saved.
Good preparation and follow-up is worth its weight in gold. Segmentation ensures that you can better target your marketing actions and do not unnecessarily waste budget on target groups that do not feel addressed. As mentioned earlier, you gain insight into the lowest segment of your customers, the customers you would rather not have too many of in your database. These are the ones who, upon closer inspection, cost you more money than they bring in. You can still offer those who are already customers the service they deserve, but your goal is to no longer attract customers from this segment.
A better result for your turnover.
A good segmentation has a positive influence on your turnover and profit. In addition to saving unnecessary costs, a well-maintained customer portfolio ensures a faster increase in profits than if you had a non-segmented customer portfolio. Why? Because when you don’t segment clearly, you don’t really know how many ‘good’ and ‘bad’ customers you have in your file. Customers who are better followed up and generate turnover, need less time and other administration, such as payment reminders, so you can gain profit faster.
How to start segmenting?
Segmentation can be done in different ways and is done in every company on the basis of different characteristics/parameters. Are you looking for a way to start? Then download an example of a segmentation sheet below. This will give you an idea of what you can use to segment a customer.
Start segmenting now and get more out of your customer portfolio.