A best practice in the foodservice industry is to embrace a pricing and spending approach grounded in customer segmentation.
Customer segmentation drives profitable decision making, creates better trade offers, and prioritizes your best customers.
Instead of renewing historical spending rates year after year, segment your customers based on qualitative and quantitative measures. Then, define appropriate pricing and spending levels to optimize the return on investment.
Using customer segmentation, companies drive
- profitable decision making 💰
- better trade offers 📊
- efficient prioritization of customers relative to one another 🏆
Each of your customer segments should present value to your organization.
Customer segments should determine your reaction to pricing, promotion and other opportunities.
Why Is Customer Segmentation Meaningful?
Your distributor and operator customers are not the same and don’t have the same requirements, expectations and/or priorities. They have broad needs, preferences, resources and behaviors. Segmentation should help your organization focus the right level of effort on the right set of customers.
As Paul Wietecha, CEO of Blacksmith Applications notes, “All customers are not created equal; potential profit varies. Segmentation helps companies allocate scarce resources – money and people – where they’ll deliver the highest payoff.”
Optimize Your Trade Dollars
You can optimize the return of your trade spend by supporting your trade strategy. First, understand who, what and how.
Identify the standard offers with trade mechanics and rates established for each customer segment.
Prioritize brands and categories, operating off of the ‘same page’ relative to priorities, goals and discount mechanics.
Create control based guidelines to ensure process integrity.
How to Segment Your Foodservice Customers
- Identify the segmentation team
- Define the segmentation team’s responsibilities