ABC Analysis in Customer Segmentation - All You Need To Know
Knowing the people, you need to target is one of the initial steps to initiate your sales activities. Businesses and organizations conduct researches and surveys to gather information about the people they have to target before marketing their products and services to do these people.
One of the methods to understand your customers is to divide them into categories. You can categorize the people you want to target on a geographical basis, based on their needs, and few other factors we will discuss later in the article. Segmentation of people provides a wide range of benefits to businesses because these segmentations lead to better sales decisions and strategies.
Keep reading this article to know the most common segmentation methods of the people in sales and the benefits of conducting these activities for a business or decision-makers.
Top three categories in ABC analysis for customer segmentation
Businesses categorize their products, services, and clients to increase their sales and revenues. One of the methods of categorizing products and customers in sales is called ABC analysis. It has three basic categories depending upon the needs and buying potential of the clients.
The following points will briefly explain these three types of categories in ABC analysis.
1. Category A
Category A contains the people with high buying potential and has the ability to bring more value to your business. Businesses need to identify these types of buyers that can help them generate a higher amount of profits. Once you identify the category A people, you can hire an experienced sales company in Dubai to contact these prospects; compel them to have a meeting with you where you can close your deals and make sales after negotiation.
2. Category B
Many people have false beliefs and concepts about people belonging to this category. Some businesses believe that these people do not contribute much to your business and have lower buying potential, but it is opposite to these false beliefs. The people belonging to category B can become potential buyers if encouraged and motivated a little and then can become a part of category A.
3. Category C
Category C people are fewer contributors to your business, and they will engage in making fewer sales with your businesses. As a business, you should not ignore these people as their small transactions, and sales in huge numbers could still bring more profits and revenue to your business. Startups and new businesses have a higher number of people in this category, and their businesses live because of the number of people in this category.
Top 3 benefits of customer segmentation in sales
Many people believe that the segmentation of people you target is useless and is a waste of time, but it is not valid. There are many benefits, and advantages businesses can avail by including this method into their sales strategies.
The following points are some of the advantages and benefits of incorporating ABC analysis into your sales methods.
1. Increases sales and revenue
One of the main aims of sales strategies and methods is to increase a business's revenue and profits. When you know your audience well, you will know the strategies well. The sales strategies for each customer you target will be different, and for that purpose, ABC analysis is a great source to understand the people who could become potential customers for your growing business while increasing its profits.
2. Better relationships with the prospects
When you understand your prospects, you tend to develop better relations with them. ABC analysis or the segmentation of the prospects is highly effective in developing strong relationships. When businesses understand their audience well, it means they know the needs and requirements well; this understandability between the two parties increases the chances of them having better relations. You can also hire a sales company to introduce you to potential customers and have face-to-face meetings to strengthen your bonds with them and let the audience know about you in-depth and in detail.
3. Timely response to the customers
When you divide your audience into categories, you will know the perfect timings to contact them. Timing matters a lot in sales, and when businesses know when they need to implement and initiate their sales strategies, they earn more from their sales methods. You don't just start implementing your sales strategies; instead, you identify the right time to initiate them once you know the people you will target. Every action in sales revolves around the audience, and businesses succeed in making higher sales that know their audience and prospects well.
Know your customers well to improve your sales!
Sales are all about developing strong relations with your customers and knowing them well. If you succeed in doing so, you will succeed in making higher sales which means your business is growing and you are earning well. Opt for platforms and services that will help you understand your business and services well and let the customers understand you by bringing you closer to one another on a single platform to negotiate and make deals.