Marketing segmentation is a method that businesses use to maximize their sales by targeting separate markets with different selling propositions for each product. Managers in change of market segmentation can use Customer Relationship Management (CRM) software to set sales targets and pipelines for each segment.
There is nearly infinite variety in how a manager can choose to segment his target market: by demographic category of consumer, geography, product positioning or by distributing sales across a range of products. CRM software is used to track sales in each segment to determine whether sales are on target to meet goals--or alternately, to revise goals in light of new data.
CRM software is designed to be used as a day-to-day project management tool, usually in a networked setting, allowing a large project to be broken down into discrete tasks and time allocations across an entire sales and support team. Sales and support professionals rely upon the software to keep them focused on crucial tasks and, in the process of completing these, they provide a steady stream of data for management to analyze workflow. Segment managers can watch individual task completion or can analyze aggregate data across a range of vectors.
There are multiple roles to be played by the marketing manager in her interaction with CRM software, which may be fulfilled by a single person, or by multiple people including the front-line sales staff. Conceptual goals and financial targets must be defined in terms of unit sales and business logic and then entered using the methodology of the CRM software. A second level of analysis is used as sales data comes in, to determine what assumptions are being met and which need to be corrected. In some cases, this analysis can be completed by the direct sales staff themselves; in others, a manager reviews aggregate sales data and determines new procedures for the entire sales force.
Sales regions are a common method of market segmentation, as it allows a sales force to establish territories and focus their efforts. Good segment managers will adjust their marketing materials to the needs of each region, paying attention to local cultural and economic differentiation.
CRM software is designed to provide managers with the bird's-eye view of the market in question, allowing them to analyze trends in data which reflect sales positioning, future marketing opportunities, and the overall impact on profitability. A common set of metrics is used across the CRM continuum, allowing segmentation managers to compare their sales efforts with colleagues in different segments or against sales by competitors and the industry as a whole.
Ellis Davidson has been a self-employed Internet and technology consultant, entrepreneur and author since 1993. He has written a book about self-employment for recent college graduates and is a regular contributor to "Macworld" and the TidBITS technology newsletter. He is completing a book on self-employment options during a recession. Davidson holds a Bachelor of Arts in American civilization from the University of Pennsylvania.