Bill Preller

Business and Marketing Strategy Consultant

Economic downturn? Time to segment without mercy.

Most markets are cyclical. What goes up does come down. But believe it or not, a downturn can be your time to shine. In the second of a two-part series, learn how to effectively segment your customers in order to grow share and increase margins, even when the outlook seems bleakest.

During a market slump, the most common reaction of a sales-driven organization is: “Sales are down, so we have to look at all the potential opportunities.”  

This mindset often leads to chasing customers who are not well-understood — wasting time and producing disappointing sales results. Certainly, you may want to explore some new market opportunities, but experimentation needs to be strategically planned, not executed ad hoc or out of desperation.

As a marketer, you may have to execute your marketing plan through a sales force that is driven by a “sales today” mentality, rather than a longer-view marketing plan.  

So how does a marketer break through that mentality? 

Focus. 

Easy for me to say, huh? How do you focus without knowing where to focus? If your research budget has been cut or even eliminated, how do you know where to put your efforts?

Five steps to segment and analyze your market

Take a practical, data-driven approach to your role, using the resources you have. In a down market, it’s easy to see the bottom — the bottom of the funnel. Take a bottom-up approach to that traditional funnel. Be resourceful. You may not have the luxury of big-budget market research, but there are steps you as a marketer can take to segment and analyze your market in a pragmatic — and still effective — way: 

  • Interview your sales team
  • Group purchases together
  • Create purchase “bubbles”
  • Link sales to customers
  • Focus on the stable/growing bubbles

For more ideas on how to segment and analyze your way to better marketing, download our free e-book Win With Customer Segmentation

Case study: Ram light duty trucks

The auto industry provides a real-world example of how segmentation helped a company survive — and succeed — during a downturn. 

Chrysler Corporation, now Fiat Chrysler Automobiles (FCA), identified the light duty truck market as a potential growth segment. The company started taking the segment seriously in 2009, when the U.S. auto industry was in the midst of an economic crisis. By introducing the Ram brand and refreshed light duty truck product line, Chrysler used the market dip to create attention and grow share while other automakers were playing conservatively.

Understanding the market very well, and focusing on a high-growth potential segment within what was previously treated as a general “truck” market, Chrysler strategically changed the Ram brand product mix. They added features to trucks that had previously been found only in cars.  And they went aggressively after fuel economy, which played against the truck stereotype but worked well in tough economic times.

Now, with the market growing again, Ram is holding true to its long-term strategy. Manufacturing efficiencies gained during the downturn now drive profitability. Savings from these efficiencies drove buyers’ incentives to lure customers away from the Ram brand’s competitors. No longer chasing the top of the market in volume, the brand is reinvented and occupies a new position in the market.

Economic downturn? Time to segment without mercy. | Bader Rutter blog

Lessons from the auto industry

Invest during a down market to grow share and take out competitors. Pay for those investments through manufacturing efficiency. Grow share through aggressive sales tactics. Then as the market recovers, back off on sales incentives and use the upside to grow margin and volume while maintaining market share. That’s a business recipe for success.

Bottom line: You are marketing. Your job is to secure prospects who will buy, by knowing who is buying what. Focus mercilessly on those segments. By focusing your tools and know-how, marketing will not waste sales’ time on nonbuyers. The result? The same close rate and similar sales figures, even during a market downturn. You maintain income for the sales team and grow share for the company. Marketing and sales work together to win — a remarkable feat no matter what the market conditions, made even more powerful and essential in a down market.

Tractor collector. Bandleader. But most of all, a customer-centric marketing expert. Bill Preller knows about agriculture and audiences. He grew up on a central Illinois cattle farm and, over the years, has become a seasoned agriculture industry business leader. He lowered inventories, reduced spending and raised margins. When he’s not thinking about customers, he collects and restores tractors and conducts a 110-year-old small town band. How’s that for leadership? Want to connect with Bill for more insights on segmenting during a down market? Email him at info@bader-rutter.com

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