The Pacemaker

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Andy Kach
Principal
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Brian Chapman
Principal
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You Say Segment, I Say Segment: Do We Mean the Same Thing?

Posted by Tobi Laczkowski on October 13, 2015



Two guys walk into a bar. They know each other. In fact, they are both leaders at a prominent medical products company headquartered nearby. Mark is a marketing VP, Sal is a sales VP. They strike up a conversation about the new product launching soon.

Mark: Hey, Sal, you’ll be excited to know that with the upcoming product launch, we’ll be introducing a new customer segmentation.

Sal: Oh, that’s interesting. I’ve had my team working on updating our customer segmentation, too.

Mark: Well, really marketing should own the customer strategy, so we should define the segments and targets across our customers.

Sal: No, sales owns the customer relationships, and we are the eyes and ears of the organization, interacting daily with our customers. We know them best and can segment and target much better than marketing ever will.

Mark: But marketing should be your source for that, plus what you do when you get there. My team should be designing the positioning and messaging.

They went back and forth for a while. After a couple of drinks, things got even more confusing.

Mark: My team has designed positioning and messaging for each type of customer.

Sal: Well, there are many customers we choose not to visit.

Mark: We need to interact with them all, since some are activated by one message, and some are activated by something different.

Sal: Not sure what you mean by activated. Either an account is big enough to cover, or it isn’t.

Mark: Who’s talking about accounts? I’m talking about the customers—the people in those accounts.

Sal: No, I’m the one talking about customers—the accounts that we call on.

We see some version of this play out in many situations. Two underlying issues tend to dominate the conversations:

  1. The definition of a customer is unclear: Is the customer an account or a person in that account?
  2. The level of sophistication is often mismatched. Sales focuses on what it can implement, while marketing will get much more subtle, and may lose sight of what will move the needle in the field.

There are entire books devoted to these topics, so we’ll just scratch the surface here. But suffice it to say, there are way too many times in which the fundamental definitions of segments are different across the two organizations. Beyond the different segment solutions, they are also segmenting at a different level of sophistication of customers. In some ways, that can really be a challenge to manage, but in the best-case scenario, the multiple views can actually work out for the better. As a case in point, the example shown above, in which sales is thinking about account segments, and marketing is concerned with people segments. Our belief is that both can be considered, but only with time.

What is the solution to this disconnect?

Our foundational belief is that there needs to be clarity for the purpose of the segmentation, and that it needs to evolve over time. Walk before running. First and foremost, a segmentation needs to help us figure out where to focus. This is a typical sales segmentation. Who are the accounts worthy of effort from our promotional channels? How will we deploy field resources, and perhaps to whom do we deploy non-field resources? This is the foundation of segmentation. And very often it focuses on who?

With this initial level under the belt, it is time to start getting more sophisticated, layering in behavioral aspects and, ultimately, understanding the underlying motivations. Ultimately, we need to start thinking about the people in the accounts, what they want and what motivates their actions. That moment is when we start tailoring the message or the offering. That is when we talk not just about who is the target but what to say and how to win. Then to be sure, we are speaking the same language.

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Ultimately, the goal is for the next bar conversation to go something like this:

Mark: Hi, Sal, how is the launch going?

Sal: The growth is exceeding our expectations! We are following the segmentation and targeting plan that we have jointly developed along with your team, and we’re seeing excellent results. We are competing in the largest-opportunity accounts, and we’re engaging with the people there in the right way. Our messages are resonating across different stakeholders with a solid value proposition for each.

Which segmentation conversations are happening in your company? More like the first pub conversation, or the second?

Topics: medical devices, medical products and services, medtech, Tobi Laczkowski, segmentation

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AUTHORS
Brian_Chapman_thumbnail
Brian Chapman
Principal,
ZS Associates
Tobi_Laczkowski_thumbnail
Tobi Laczkowski
Principal,
ZS Associates
Will_Randall_thumbnail
Will Randall
Manager,
ZS Associates
Matt-Scheitlin-London_thumbnail
Matt Scheitlin
Associate Principal,
ZS Associates
Andy-kach_thumbnail
Andy Kach
Associate Principal,
ZS Associates
Bhargav_Mantha_thumbnail
Bhargav Mantha
Associate Principal,
ZS Associates
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