Project: Segment Customers (Part 1 of 2)

LSM561: Discovering Sales Growth Opportunities

Project: Segment Customers (Part 1 of 2)

Customer Segmentation Workbook

Directions:

You just had a working session with the VP of Sales. Together, you identified a list of the ten most important needs for Atlas customers.

During your working session with the VP, the company president walked by and requested a preliminary segmentation analysis.

The VP of Sales has selected two of the customer needs for their relative importance to each account:

· Need 1: Standard Stand-Alone Product

· Need 2: High Energy Efficiency

Using the data on customer preferences, you will determine where needs clusters have formed and decide how many clusters to form.

To complete the activity, follow the steps below.

Step 1: Review Company Information:

Company Background

Atlas Technology, a subsidiary of HealthCo, is a commercial equipment manufacturer that sells fitness equipment to six primary industries:

· Health clubs

· Hotels and resorts

· Colleges and universities

· Assisted-living facilities

· Physical therapy practices and hospitals

· Governments and NGOs

HealthCo is a $2B diversified manufacturer of a range of industrial health-related products.

One hundred percent of sales are to commercial B2B customers, across a variety of sectors.

Survey Results

This table summarizes the output from a survey that asked accounts to rank two needs on a scale from 1 to 10 where 1 is a low-priority need and 10 is a high-priority need.

Accounts / Need 1: Standard, Stand-Alone Product / Need 2: High Energy Efficiency
A / 8 / 2
B / 8 / 5
C / 6 / 3
D / 9 / 10
E / 2 / 7
F / 5 / 7
G / 9 / 6
H / 6 / 5
I / 2 / 6
J / 10 / 8
K / 3 / 8
L / 10 / 4
M / 4 / 5
N / 8 / 10
O / 7 / 7
P / 9 / 8
Q / 7 / 8

Step 2: Outline the Clusters

Using the data on customer preferences (which you’ve already plotted, below), determine:

· Where needs clusters have formed

· How many clusters to form

· How you might serve these customer types differently

To outline your clusters, you can either:

· Print a copy of this workbook, circle or outline your clusters by hand, then scan and save your copy, or

· Select, then copy and paste the small box red, below, for the each cluster you identify. You can drag each copy of the box over the chart, and then resize it to outline each cluster.

Step 3: Compare Your Work to the Answer Key

Open the Customer Segmentation Answer Key and compare your work to it.

Step 4: Reflect on This Project

Answer the following questions directly in this document. Use as much space as you need.

Question: How many clusters did you form?
My response:
Question: How did you decide where to draw the boundaries of each cluster?
My response:
Question: Why might different teams create different clusters from the same data?
My response:

Step 5: Save and Submit

Save your completed Customer Segmentation Workbook using the following naming convention: Customer_Segmentation_<your name>.doc.

For example, if your name is Victoria Montclair, you would save the file as

Customer_Segmentation_Victoria_Montclair.doc.

Return to the Segment Customers (Part 1 of 2) page in your course. Using the Submit Assignment button in the top right corner of that page, submit a copy of your completed Customer Segmentation Workbook.

Disclaimer: While elements of Atlas’ profile and elements of the profiles of some customers and competitors are based on real entities, this entire case, materials, and information are fictional and do not represent any actual organization or situation.