In June 2014, SEDLÁK & PARTNER started a market research in China for a longstanding customer. The focus of the study was the assessment of the market segments. Opportunities and risks for future business success were also identified.
An intensive discussion of the results with the client’s market managers culminated in a portfolio analysis to determine the most attractive market segments for the company in the future. This sharpened the view of which of these segments in China should be processed with high priority and which should be neglected.
In this way, a valid answer to the question: “Where can and do we want to grow?” Was found. However, this was only one side of the coin. It was also necessary to find answers to the question with which customers or customer segments (simple show customer segments) can the existing potential of the company be leveraged.
This is where ICS – the innovative customersegmentation – was implemented.
Next to a market research a specific customer survey was designed, especially suitable for our customers in order to determine the characteristics of existing customer segments and the associated minimum expectations and differentiation potential.
The special questionnaire was distributed as online survey on a self-hosted platform. In close cooperation with our customer, around 400 key players were identified for 100 existing and potential customers who influence the purchase decision.
The key players on the customer side were first called personally to explain the purpose and benefits of the survey. This should ensure that they can be won over to participate in the survey. After the phone call, the link to the online survey was sent electronically. The initial expectations regarding participation in the survey were far exceeded. With a participation of over 70%, valuable data was generated to determine the special characteristics of existing customer segments.
The results were surprising. Eight different customer segments with special characteristics were identified in the prioritized market segments. Each customer segment has specific expectations of the product and service portfolio, time-critical processes, price conditions, tolerance for deviations in the case of free services, relationship management as well as brand and image. After presenting the results, it quickly became clear what potential there was and how it could be used by the company.
After the value propositions had been defined for all customer segments, the strategy map could be developed. This tool was very much appreciated as it helps to identify and work out the cause and effect chains between the financial perspective, the customer perspective (including the market and customer segments) and the internal process perspective (including the service creation, customer management, innovation and social processes as well as the framework conditions).
At the end of the first milestone, clear answers to the following questions were found:
- Which market segments have the greatest potential?
- In which market segments are you competitive?
- What different customer segments exist in the market segments with regard to minimum expectations and differentiation potential?
- Which market and customer segments should be addressed with high priority?
- What must the services for each customer segment look like in terms of product portfolio, time-critical processes, price conditions, services, relationship management as well as brand and image?
- What has to be done internally to successfully process the different customer segments in the context of customer management?
- What needs to be done internally to deliver the expected performance per customer segment?
- Who has to do what by when to achieve the goals set?
One of the most important insights from the process for the management was that the existing market potential is many times larger than originally assumed. It became clear how to handle the different customer segments in the markets.
All workshops were initially carried out in English, but with simultaneous translation into Chinese. The Chinese key players greatly appreciated not being overwhelmed by language and especially discussing and discussing challenging topics in their own language.
An intensive implementation process now follows with the aim of increasing sales and profit significantly.