How Slicing & Dicing Customers Led to 20% Growth (No Actual Customers Were Harmed!)

In today’s competitive market, focus will always win. In a tough climate, while your competitors are running around with a scattergun, taking the road less travelled and executing a plan with sniper rifle–like focus will ensure you are maximising your business resources against the areas that will have the most impact!

One of the most effective ways to create laser focus is through customer and category segmentation. By breaking down your broader market into focused, prioritised groups, companies can tailor their strategies to better meet customer needs — delivering a sell story that is more compelling and relevant.

A segmentation strategy will also help you better leverage your company’s signature strengths, optimise marketing efforts and communications, and ultimately increase revenue and market share. In fact, we’ve seen businesses that have implemented segmentation effectively reporting up to 20% growth in sales by focusing efforts in the areas they are best placed to win — and in turn deprioritising others.

Slice & Dice: What is Customer Segmentation?

Customer segmentation is the practice of dividing customers into distinct groups based on shared characteristics — such as past performance, future growth opportunity, and defining customer needs and roles.

But a customer is a customer, right? Surely every customer is valuable? Yes — but what most businesses don’t appreciate is that a one-size-fits-all approach dilutes the ability to focus on the specific customers where you are most likely to win, are most aligned to your strategy, and are therefore most likely to drive growth.

A segmentation strategy enables businesses to:

1. Identify high-value customers – Focus resources on the most profitable and growing customer segments, both now and into the future.
2. Tailor the sell story – Deliver targeted messaging, compelling narratives, products, and promotions that resonate with specific groups.
3. Improve customer retention – Enhance customer experience by meeting their specific needs more effectively. You’ll show them you understand their business better and are the partner that gets their segment.
4. Optimise product offerings – Tailor products or services to align with the needs of different customer groups and focus your innovation efforts.

Real-World Impact: A 20% Growth Success Story

Strategic Specialists helped a leading consumer and commercial goods company define its customer and product segmentation strategy, shifting from a broad sell approach (“one size fits all”) to a segment-based sell strategy.

This approach helped the business:

1. Segment their customers into value-based groups — high revenue, growth, or gross margin — and define the role they play in the growth agenda.
2. Refine product categories to align products best to the needs of that specific group.
3. Tailor marketing strategies to ensure the pitch is compelling and that customers are supported with tools to help them get more customers.

By identifying key segments for growth and the key customers within them, we could tailor the solutions better to their needs. Equally, the company proactively deprioritised customers and segments that weren’t aligned to their growth ambition and had less potential. At the end of the day, they say the only thing more important than deciding what you will do is deciding what not to do.

This bold approach helped the company deliver +46% (+$3.4M) growth in priority customer segments, while managing to hold non-priority customer segments to only a modest decline (–19% / –$1.1M) over the same period — despite not even calling on those customers at all. This led to a total business uplift of $2.3M (+16%) year to date, in a market that had otherwise experienced decline due to cost-of-living pressures.

Through partnering with key customers in priority segments, the company was able to exploit a relevant and compelling solution — while competitors that remained scattergun brought less insight and a less compelling offer to the table.

Category Segmentation: Maximising Product Potential

Category segmentation focuses on dividing products into meaningful groups based on factors such as customer demand, price sensitivity, or usage occasions. This approach helps businesses:

• Align sales efforts with demand – Prioritise best-selling categories while nurturing emerging ones.
• Enhance cross-selling and upselling – Recommend complementary products to increase transaction value and maximise incremental gains.
• Develop more effective pricing strategies – Adjust pricing based on category performance and customer willingness to pay.

The Takeaway

Customer and category segmentation is like a delicious tart — slice it up and start with the most delicious bits! Many businesses only look at the overall revenue and profit number, but if you peel back the layers and truly understand where and what is driving your performance, you’ll gain a greater understanding of where you can create the most impact. By slicing and dicing customers and products strategically, businesses can enhance focus, better deliver on customer needs, and drive sustainable revenue growth.

If done right, the rewards of slicing and dicing are significant — without any actual harm to customers, just better-targeted offerings that keep them coming back for more!