Most companies don't have a segmentation strategy. Of those who do, most have no idea what to do with it. Face it, you either inherited the plan from the "other guy" who just left, or it was handed to you by a consultant - because you did not know what to do when you were asked to create a plan. Either way, that means you probably won't be too successful at applying it.
The reality is, segmentation does not need to be complicated. Often times it presents itself organically. All you have to do is take six simple steps to define and refine it.
Step 1) Analyze Your Sales Data: Who is buying your products or services right now? Where are they located geographically? What specific product or service is bought by most customers? How often do they buy or renew? What channel did they come from - telesales, web, storefront, authorized dealer? If you have additional information acquired during the purchase, analyze that. How big is the company buying from you in terms of employees? What is the income of the customers buying from you?
Step 2) Get Additional Insights: Most companies don't have anything in place during their purchase process to garnish extra insights mentioned above. But, there are two quick ways to get it. First, deploy a short exit survey in every purchase channel (other survey techniques work well too, it does not have to be an exit survey). Make sure you give the customer a reason to give you the information - perhaps a prize or sweepstakes (the data is worth it). Find out the who, what, when, where and why about your customers purchasing and usage habits. A second way to get more information is to use a third party data service. For example, if you are in the B2B space, take your customer list and bump it up against a SIC Code service to get a better idea of the demographics of your revenue source.
Step 3) Define the Unknown: If you have no idea of the market size, do your best to determine it now. For example, the SIC code resource mentioned above can be used to determine the market size as well. Not only can you find out how many architects are buying your software by bumping up the customer names against a SIC code database, you can also find out how many total architects there are in your market. As for consumer, free and fee based demographic data is widely available. Just determine how you are cutting your data and match it up to the outside data. If you don't have a clue about how to do that, then just use the model of the outside data to guide how you should segment your own.
Step 4) Build A Bubble Chart: Sort your customer and prospect data into simple categories. In the B2B space this usually follows industry segments (builders, suppliers, services) or size of business (small, medium, large). In the consumer space this usually follows a pattern of usage (power user versus casual user) or demographic profile (age, income, family status, etc.). Put that data into a three dimensional bubble chart - such as the one I covered in my article last August on Segmentation, Targeting and Positioning for direct mail. Then, simply identify where the opportunity is.
Step 5) Create Profiles: Now that you have created a simple structure to identify your customers and prospects, you must give them a persona. Go back to the data you collected and create a "key" for each segment. Highlight critical behaviors, tendencies, or facts. If you need additional insights, perhaps do a small focus group or two to provide a deeper layer of qualitative data.
Step 6) Align Your Marketing & Sales: Segmentation strategies are worthless if you don't put your resources behind it. Get your marketing programs to align with the insights you just uncovered. Get your sales force to hone in on those areas of opportunity, while also building a deeper understanding of these new segments. Then track and measure your results over time in each segment.