HOW DO WE DEFINE AND APPROACH DIFFERENT BUSINESS SEGMENTS?
“I don’t need a lengthy business review or account plan, I know what I’m doing,” or “We have no time for business reviews” or “It seems that only huge companies need this, I don’t.” Sound familiar?
How to define and approach different business segments and account types, strategic account planning and management and, of course, why these matter regarding operational performance and client success, are very important.
Why is this thoughtful approach to client segmentation so important? Because investing in strategic accounts is a huge commitment for organizations, same with investing too much in small/medium business groups, and there should be a similar perception on the customer’s side so that you can collaborate to help them achieve their desired business results; and yours as well.
What we need to primarily carry out are the following:
- Define Client Segmentation
Client Segmentation is simply the grouping together of clients or accounts based on similarities they share with respect to any dimensions we deem relevant to our business. Dimensions could include customer needs, channel preferences, interest in specific metrics, customer profitability – the list goes on.
- Determine Client Types and Establish Varying Client Relationships for each
Client relationships are like romantic relationships. You embark on a journey together where you will share negative and positive experiences and have to compromise to make things work. But just like personal relationships, client relationships can be challenging. The only difference is it’s really up to us (vendor folk) to make our partner (client) happy. But how do you do it? – You need to identify client types and establish mirror approach. Being able to appropriately match the approach to the client type not only makes for better collaboration, but also makes a client feel special by having the service directly tailored to them, too.
- Determine Types of Engagement or Level of Support
For customer success organizations that are either building their team, scaling their team, or re-defining their processes, they know firsthand how many components go into planning and determining the right customer engagement model.
For some clients, onboarding of their project doesn’t require a complicated process (low touch) and for other clients, they require individuals or teams to drive implementation (high touch).
When you first start thinking about how you’ll engage with your clients, it’s important to take a big step back and consider a few questions: What’s this client’s annual revenue? Will a model that has a high touch team with many contributors actually support revenue growth, or will you need an engagement model that’s lower touch?
In a broader spectrum, in totality, understanding how unique each of your clients and their business is also your number one business. It is your gateway to a dream ROI, may it be in actual figures $$ or in establishing a strong, solid and holistic client relationship.
In collaborative discovery, you allow your clients to see you as an extension of their team, not as an outside partner.
In continuously building trust, you overcome gaps in terminology, expectations, and different past experiences.
In communication, you avoid frustrations. Nine out of 10 times, any frustration on either side occur because we aren’t communicating with our clients enough.
In correctly segmenting, defining and approaching your clients and their business, you provide a lifetime value. Rather than constantly focusing on finding new clients, you focus on looking after the clients you have; not just in the best possible way, but most importantly, you do it – the RIGHT way.
Even if numerous companies are already reaping the benefits of outsourcing, there are still many who aren’t convinced. No one can blame them. There’s a long list of discouraging myths and misconceptions – and then, there are also several, very real outsourcing fails.
Case in point: 2010’s IBM vs the State of Indiana debacle. Both parties went to court over a ten-year outsourcing contract valued at 1.4 billion USD. Two years into the partnership, Indiana decides to pull out, citing that systems IBM implemented were problematic. It was a costly misunderstanding – a $78 million-dollar one, to be exact. Big, public disasters like these are more than enough to scare off the average entrepreneur. The silver lining is, though, that these widely known blow-ups also leave behind lessons that can help new business owners re-think their outsourcing apprehensions.
Here are some of the most common mistakes to A.V.O.I.D.:
A – Abruptly choosing just any service provider
One of the first decisions companies face after deciding to outsource is choosing their outsourcing partner. There many things that should be considered – from cultural fit, to expertise, to specific need – and it can be a long, time-consuming deliberation. Some companies make the mistake of jumping in too fast and not studying all the essentials. The right vendor can make or break an outsourcing strategy, which is why it’s important to take the time to find the right one.
V – Vague expectations
Statistics show that 50% of outsourced projects flop outright or don’t quite reach expectations. One of the main factors contributing to this is the fact that many companies don’t really know what they want in the first place. When expectations are unclear, the whole process doesn’t come together – hires aren’t the right fit, metrics aren’t correctly measured, goals aren’t met – and it inevitably ends in conflict and breakdown.
O – Overlooking security risks
With today’s rampant breaches and data leaks, security should be a top priority. Many outsourcing fails involve some form of security issue, especially when these matters were not explicitly discussed in the beginning. It is important for outsourcing partnerships to agree on how information is shared and stored; as well as to have systems in place to fight off security risks.
I – Inconsistent and irregular communication
Some companies fail to realize that outsourcing is a progression. They think that when they find a vendor, express what they need, and start paying for the team, they can already wean off involvement immediately. The truth is that there are going to be hiccups along the way, no collaboration is perfect – so it’s important that there is regular communication for check and balance, improvement, and alignment.
D – Deciding based solely on price
For 82% of US companies, the primary reason for outsourcing is to save on costs. It’s normal to go for the option that gives the most bang for the buck. The danger is in thinking about pricing too much that everything else is sacrificed. Most often, the lowest rate possible, unfortunately, also comes with lower expertise and lower quality of work.
Like every other business decision, outsourcing has its pros and cons. In the case previously mentioned, many of the challenges were avoidable and could have been handled differently. For many successful companies, the benefits far outweigh the costs. A company’s outsourcing journey can be another cautionary tale or a success story – depending on business owners doing their due diligence, learning from the experiences of others, having safeguards to mitigate risks, and remembering what to avoid. Done correctly, outsourcing is a great, profitable strategy for any organization.
Considering outsourcing? FGC+ has helped many clients who are new to outsourcing by being the ideal partner, guiding them every step of the way. Let us help you get your outsourcing journey started.