Segmentation Enters the Sales Playbook

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Everyone knows about segmentation as a marketing tool, but now, it seems, it is being applied increasingly in the sales realm as well.

For both marketers and sales reps alike, segmentation helps determine the best prospects for targeted messages and the proper wording (e.g., consumer language, professional language, or something else) or types of messaging channel (e.g., video vs. audio, social media vs. email, etc.).

“Segmentation helps move prospects into different classifications,” says Colin Reid, global marketing director for customer intelligence at SAS Institute, a provider of analytics, business intelligence, and data management software and services. “You try to match different attributes. It could be geographic location, professional title, or something else.”

There are many similarities in segmentation for marketing and for sales purposes, according to marketing and sales experts. Both look for data to separate those with a propensity to buy a product or service and those who are less likely to do so, with the goal of making sure that resources are not wasted.

“The main benefit of segmentation for sales is the same as that for marketing: Breaking the prospect/customer universe down into smaller groups allows both organizations to graduate from speaking to the lowest common denominator to wants/needs that are more relevant and therefore effective but not as broadly shared,” explains Mark Magnacca, president and cofounder of Allego, a company that provides online sales training tools.

“The sales rep armed with the right messaging can easily deploy a very targeted sales funnel that will drive leads and results,” adds George Schildge, CEO of Matrix Marketing Group. “You have to think about it like layers. These layers could be company size, title, pain points, gains, industry, geography, and other elements. To be successful, sales reps need to understand the pain points and gains for their target audiences. This can be complex. Once that is finished, technology helps with testing and reporting to see what works and what doesn’t.”


While there are many similarities between segmentation for marketing and segmentation for sales, there are important, notable differences as well. A marketing segmentation approach for a consumer will look at certain parameters, like people of a certain age, income level, or job title. Sales segmentation, on the other hand, needs a much more refined approach, says Jim Dickie, cofounder and independent research fellow at CSO Insights.

“Marketing is looking for the right people to talk to; sales is trying to win the game,” Dickie says. “Marketing is taking a shotgun approach, looking for a large number of targets—though within certain parameters—to which to send marketing messages. Sales segmentation is much more of a rifle approach, defining parameters much more tightly, adding more focused parameters (like a sighting scope on a rifle) to hit the right targets. So sales will focus on many fewer potential targets than marketing.”

While marketing might consider 10,000 or even 100,000 top prospects, sales will use additional data to further refine that list down to perhaps 1,000, Dickie explains.

Another big difference between the two, Reid says, is that marketing segmentation focuses much of its attention on the customer journey, customer experience, etc. Those factors don’t matter in sales segmentation. Instead, the focus is on how to achieve the desired outcome—completed sales.

Additionally, sales segmentation might take an even more precise focus to help reps hit specific goals over the short term, such as quarterly sales goals. So in the last few weeks of a quarter, the segmentation effort might focus not just on prospects and current customers with the highest propensity to buy but on those with the highest propensity to buy the most over that period, Reid says. “The key difference with sales is assigning data and determining the outcomes that you are trying to achieve.”

“Segmentation in sales gives you immediate feedback,” adds Manny Medina, CEO of Outreach, providers of a sales engagement platform. “If your channel or message doesn’t resonate with your target, you find out right away.”

Also, marketing’s approach to segmentation (e.g., looking at company size), might not matter to sales, Medina says, noting that sales vice presidents behave roughly the same regardless of whether they work in midmarket, commercial, or enterprise accounts. “Additionally, marketers tend to optimize for buyer segmentation, whereas sales has to navigate buyers, influencers, and end users, each of which may belong to different segments,” he adds.

The use of sales segmentation has taken off in the past few years as Big Data and artificial intelligence have become more advanced and refined, providing more data elements to use in analyzing which segmentation parameters tend to be the most successful, and with the greater availability of powerful cloud-based systems to crunch the numbers for companies that are too small to have their own internal deep analysis capabilities, Dickie says.


While companies need additional data for good sales segmentation, it’s not just a matter of more information. It has to be the right data. “The major thing is the data,” Dickie says. “You need to get the right data into the systems. If you have crappy data, then you will have crappy solutions.”

Reid agrees. When a retiring salesperson has an extremely profitable book of business, for example, replacing him with someone else might not be as simple as promoting the next most senior (or successful) salesperson, though that might be the intuitive thing to do.

“You have to look at how [the retiring salesperson] interacted with customers, what kinds of offers (discounts or other incentives) he provided, the inventory he had. Many companies don’t take such things into account, but they have to,” Reid says.

Similarly, the data has to be robust enough to provide users with information sufficiently detailed to yield the right segmentation. Dickie recalls one company that gathered all of the details it could about most top hospital executives, only to see sales efforts fail. That was, until it added the nursing executives as well, because they were the ones who made the purchasing decisions for the product in question.

Another consideration with sales segmentation has nothing to do with having the right and refined prospect data, Dickie says. Companies also need to have information on what their competitors are doing. In a highly competitive market, it might make little sense for a salesperson to spend time going through deep customer segmentation analysis, then following up with sales calls to the appropriate people—because one or more competitors might already own the customer and the market. Resources would be better spent in another market.

“You have to know when your odds of winning are low and when to walk away,” Dickie says.


Marketing segmentation data and results can also provide the basis for successful sales segmentation, says Kristian Romero, marketing manager at VirtualHealth.

“To really take advantage of sales segmentation, any insight from marketing is key. Tools like progressive profiling forms, role-/region-/product interest-specific workflows, and cookie tracking are all vital marketing tools that give sales the information they need to properly segment,” he states.

“You can’t be too simplistic,” Dickie advises. “Some companies want to implement sales segmentation but don’t spend enough time or energy on it. You need to use Big Data and [artificial intelligence].”

There are relatively inexpensive tools that can do it, Dickie adds, citing Salesforce.com’s Einstein, which handles much of the needed number crunching and analysis and will improve algorithms over time. “You can license the solution as part of your solutions set,” he says.

Romero adds that sales-specific tools to find prospects, such as FindThatLead or LinkedIn’s Sales Navigator, can help define specific segments or narrow down the product offering possibilities for prospects to help maximize the potential for a closed sale.

“You need to build a buyer persona analysis,” Dickie says, recommending that companies pull together not only information from traditional marketing sources but also from deep social media analysis, looking not only at the prospect’s information but also that of his closest social media contacts to get more depth of data.

Because data—lots of data—is what drives sales segmentation, the first step is to develop comprehensive data gathering capabilities, experts say. That means culling data from contact management systems, current and past marketing campaigns, contact center outreaches, two-way communications with customers and prospects, social media, and other sources, according to Dickie.

It also means including data that might seem superfluous at first. A nonprofit involved in environmental causes, for example, found Google Earth to be a valuable element of its sales segmentation effort. Through Google’s photos of homes, the charity could identify homes with solar panels and those with pools, which both tend to be owned by people who are environmentally conscious.

Yet the Google Earth information was not the last word. Some homes with pools, solar panels, or both were purchased with those items already installed rather than by people who added them after the purchase. So the salesperson (fund-raiser) needed to dig down into home improvement data (many communities require permits for home improvements) to determine if the Google Earth information is relevant for sales purposes.

“You also need to decide what markets you want to be in,” Dickie adds. A bank, for example, might want to add insurance products. While offering them can be considered part of being a full-service bank, it also requires licensure, compliance, and more work and expense in other areas involved with those products.

A U.S. company might initially want to grow outside of the nation’s borders and target Canada as the market for expansion. But with good marketing segmentation data, the company could learn that Mexico provides a better foreign sales opportunity.

“When rolling out a segment-based sales strategy, our Allego customers have seen success by following three tactics to ensure buy-in,” Magnacca says. “First, ensure that the platform and strategy have buy-in from top execs. Second, make sure that there’s already valuable content created for each market segment for reps to digest when they first access the platform. This can be achieved by leveraging those same top execs to preload video content and insights based on their experiences, as well as by inviting a small group of sales superstars to do the same. Third, make sure the program becomes an integral part of sales on-boarding, as new hires can be a key driver of adoption and can help create buzz.”

Since many of the marketing and sales segmentation parameters are the same, companies need to have a liaison between the sales and marketing teams to facilitate communication and make sure each team is getting the data it needs, Dickie adds.

Rather than a liaison, Reid recommends combining sales and marketing segmentation efforts as much as is practical without missing where the efforts need to be different. On the other hand, if the sales and marketing segmentation efforts are too divergent, the company could spend too much time and energy on the different segmentation strategies, and results will suffer because of disconnected experiences.

Sales segmentation strategies will continue to be refined as companies have access to an increasing amount of customer data and as they analyze their sales results to better refine the sales data and segmentations that lead to closed sales.

According to Reid, a growing number of sales organizations are looking at segmentation in real time, re-segmenting every time the organization has another touchpoint with the customer. “If the customer calls in, the organization can predict what they are calling about so they can get them to the right area of sales immediately. This way the path to revenue is much more streamlined. It’s real-time segmentation, using data and analytics to decide what to do next and to help determine what I should do to move the customer to my goal”—a closed sale.

Phillip Britt is a freelance writer based in the Chicago area. He can be reached at spenterprises@wowway.com.

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