How NOT to Under- or Over-Serve Customers

Increased access to information often means customers approach sellers later in the purchase process. To avoid price negotiations, sellers must teach customers about an unknown problem or opportunity in the customer’s business that the supplier is uniquely positioned to solve.

In highly commoditized markets, organizations have been challenged to differentiate themselves and their products from their competition. Without clear product advantages, organizations must determine what elements of the service they provide sets them apart within the market.

In an effort to identify a differentiator within a commoditized market, DuPont conducted a survey of its customers to determine what different segments value in sales interaction. DuPont ran a conjoint analysis, which forced customers to make tradeoffs on what they would want in the purchasing process. Through the survey, DuPont learned that many of its customers did not require a face-to-face sale and were actually being over-served by the traditional deployment of field sales reps.

In fact, by surveying their customers, DuPont was able to segment customers based on their needs (cost, quality, or service) and preferences, and reevaluate the way in which they were deploying their sales force. Price sensitive customers were served primarily through inside sales. Customers that cared about price and quality, were jointly served by field and inside sales reps. Finally, customers that cared equally about price, quality, and service, DuPont utilized its field sales reps.

Based on the new allocation model and the increased utilization of Inside Sales, DuPont saw inside sales contribution to revenue triple. Additionally, revenue grew by 7% in the accounts that were transitioned from field sales to inside sales. By providing customer segments with the appropriate service, DuPont not only improved its cost-to-serve but also differentiated itself by the way it served each customer segment in a highly commoditized market space.

SEC Members, learn more about how DuPont optimized its sales force by segmenting its customers. Also, be sure to review our Channel Strategy and Management and Customer Segmentation topics for more best practices on improving customer management.