How Do You Segment Your Marketplace?

by Tom "Bald Dog" Varjan

Once Mother Teresa was asked to participate in a march against war. She turned it down. The person who asked her was aghast. He asked her why? She told him that while she was not willing to march against war, she was willing to march for peace. Basically she said she was a pro-peace not an anti-war person.

In the same way, I don't say that you should show negative feelings against inappropriate prospects. All I'm saying is that in all your dealings favour prospects with "great client" potential and emotionlessly walk away from problematic prospects.

Note that it is your market that defines your branding, positioning, packaging, pricing and even the claims you make.

You must know your market's size, growth rate, demographics, pshychographics, technographics (technical sophistication: abacus vs. computers), needs, purchasing habits, and many other factors. Different companies segment their markets differently, but this segmentation method you're about to learn applies to every industry. There are two attributes to consider...

1. Sophisticated Clients - Sophistication indicates the client's experience of using the kind of products and services you sell. A woman who drives a rust bucket with a burnt-out engine and uses AA extensively is a sophisticated client. Usually the more experienced clients are the more sophisticated they are too.

2. Unsophisticated Clients - Another woman whose car breaks down the motorway and calls the AA service for the first time is an unsophisticated client. She's never used the service and has no preconceived notions or expectations about it.

3. Appropriate Clients - Fitting your idea client profile. Examples: Local, it is in growth mode, pays bills, respects its people, run ethically, etc.

4. Inappropriate Clients - Falling outside of your ideal client profile. Examples: Outside a 200-mile radius, it is in disaster mode, can't decide, cheap, exploits its people, late on payments, dodgy credit record, slime ball leaders and managers, etc.

This segmentation is usually done after an initial discussion with the prospect, and then based on what we see we can categorise prospects.

The four attributes form four segments...

1. Sophisticated - Appropriate - These are usually somewhat bigger clients. They understand your industry and know how to work with people in your field. For instance, when a client tells a consultant to take on some extra work because the clients' people are too busy, this reveal that the client doesn't know how to work with consultants. They are shrewd negotiators. Your can have large sales but your profits are lower than they could be. These clients are loyal and are willing to spread the good word about you and refer business to you.

2. Sophisticated - Inappropriate - This is a disaster. These clients have no respect for you and your products and services. They want to squeeze you until you sweat blood. You can expect tiny profits, lots of arguments, unreasonable demands, delay in payments and high level of employee stress, burn-out and possibly attrition on your side.

3. Unsophisticated - Appropriate - These clients offer lower sales but higher profits. These people value your advice and information. These are the typical students. They are keen to learn from you. They rely on you to provide extra value-added services and are willing to invest in those services. We all know the dangers of wasting time on nickel-and-dimers. These are really

4. Unsophisticated - Inappropriate - These are the ultimate leeches, best described by a song you can find on the 1975 Queen album, A Night at the Opera. The song is entitled Death on Two Legs. These clients don't appreciate anything. These are idiots who demand you to bend over backwards and warp your life around serving them for peanuts. Personally I believe there should be a permanent hunting season declared on these people, and the government should even provide subsidised hunting equipment and free bullets to exterminate these mentally cancerous genetic mistakes from the face of the planet. These are the people who take your products or services, use them for a while, then take you to court to demand their money back for no apparent reason. No business is better than shitty business. Never let idiots drag you down and jump all over you. At least, if you have no business, you can go to McDonald's to flip some burgers and pay your bills.

So, now you see is what's going on at the client's end, so you can tweak your end of the business. Work out your ideal client profile and make certain you accept only clients who fit your profile. The whole idea of business is not just to sell your stuff to more people but creating an appreciative clientele with whom it is fun to work. If your business looks and feels like a morgue, then sooner or later this rubs off on your personal life too. And in order to create a cheerful workplace, you need cheerful clients. After all, like attracts like. Maybe this is why funeral homes don't employ cheerleaders. So, what is your workplace like? Is it like a funeral home where passion and innovation go to die or like and arena of excellence?

And remember! Don't sell harder. Market smarter. Both you, your employees, your clients and prospects will find it more enjoyable, profitable and attractive.

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