|
Industry Situation
Over the last several years, the shipping industry experienced significant change. Customer Total Quality Management initiatives and downsizing impacted how shippers purchase ocean transportation services. Many customers reduced the number of shipping suppliers used, favoring to outsource parts of their distribution functions. The outsourcing trend gave rise to hundreds of small "logistics" companies who manage part or all of the shippers' supply chain.
Client Situation
In order to maximize the effectiveness and financial return from its marketing and sales resources, this Fortune 1000 company recognized it needed to qualify customer value (i.e., which customers offered the greatest opportunity for growth).
Key Issues
The client asked AGI to assist with the following tasks:
 |
Segment their customers. |
|
Refocus sales and marketing resources on the best customer to meet growth objectives. |
AGI Solutions
AGI worked with the client to define customer segments. The specific objectives were to: 1) develop a segmentation model to group customers, 2) assign customers to a segment, 3) prioritize the segments for the purpose of deploying marketing and sales resources, and 4) ensure the segmentation model was replicable. Once the customer segments were defined, we selected the appropriate sales channels and jobs to most effectively sell to each segment. This work was integrated on a worldwide level creating strategies for each segment, selecting the optimal sales channels, defining the sales jobs and coverage model, and developing a third party (i.e., alternate channel) strategy.
Outcomes
As a result of our work the client implemented the following initiatives:
| |
Developed teams with profit and loss accountability to sell to customers in the most attractive segments. |
| |
Launched a telesales operation to sell to the least attractive accounts. |
| |
Maintained a direct sales organization to sell to middle tier accounts. |
| |
Treated third parties as a channel of distribution rather than a customer; partnered with certain third parties. |
| |
Created a number of sales specialist jobs. |
The segmentation showed that a small percentage of customers represented enough incremental opportunity to effectively double the company's revenue worldwide. In North America, the "target" penetration opportunity for this group of customer represented a 20% increase in revenue. The segmentation also showed that a small percentage of the company's revenue came from new customer acquisition. The total opportunity for prospects in North America was almost eight times the company's revenue in that geography.
|
