Case Study: Market Segmentation


The client had a broad portfolio of capital equipment healthcare products, maintenance agreements and financial service offerings. The products were designed for a continuum of variably sized customers in an array of different medical specialties. There were constant complaints from marketing leadership about sales force effectiveness, as some products and services seemed to be consistently underserved. The leading sales professionals were often the worst “offenders” of selling only certain products to certain market segments.



We mapped out the target market segments for each major product. By ranking the market segments by applicable products, potential revenue size, number of potential customers and similar attributes, it became apparent that the expectations and metrics for the sales force did not match the profitability goals of the company. A go to market strategy based on the “STP” process (segmentation, targeting, positioning) was then employed to customize the proper selling solution for each market segment. Key components of the resulting marketing mix included the type of sales channel customized for each targeted market segment, and the sales compensation model for each segment.



In the year that followed the revised go to market strategy, revenue increased by 22% and expenses declined slightly as a percentage of sales. Net promoter scores improved moderately among customers.

Much can be gained by simply going through an exercise that begins with market segmentation. As in the example above, previously underserved customers are given new focus. Perhaps more importantly, vital trade-offs are made such that certain customer segments are removed from the responsibility of some marketing and sales teams. Identifying which segments should not receive marketing energy results in improved sales efficiency while reducing waste.