Customer Segmentation and Profitability

The client, a major personal care manufacturer, was losing share with certain customers (retailers).To regain share, they needed to be more customer focused by understanding core customer requirements and developing the “right” capabilities to grow share with these customers

• Conducted a detailed “voice of the customer” study by interviewing a broad section of customers to understand their perceptions of the client relative to other manufacturers
• Conducted a detailed profitability analysis by customer to identify which customers were profitable and which were not
• Segmented customers into three broad segments based upon growth opportuniteis and cost-to-serve
• Based upon these analyses identified opportunities in terms of (a) gaps to best practice and (b) capabilities that needed to be developed
• Developed an action plan to engage these customers

• Identified key gaps to best practice in the area of category leadership, innovative marketing and trade promotion practices
• Segmented customers into seven sub-segments (within three segments) with a clear outline of what the client needs to do to earn the “right to win” and “right to play”
• Identified a profit opportunity of $50-70MM by realigning the strategy to serve each segment based upon its specific points of focus