Sales Segmentation and Share of Wallet Are Vital Elements to Building a More Profitable and Efficient Sales Strategy, IDC Finds

FRAMINGHAM, MA – JANUARY 4, 2007 – Sales segmentation is a vital first step in building a platform for more profitable and efficient sales strategies, a new study published by shows. In the first of two new studies outlining best practices for successful sales strategies, IDC's Sales Leadership Board research indicates that for vendors who make the investment in thoughtful, thorough, data-based sales segmentation policies and practices, the payoff will be substantial.

"Simply put, the goal of sales segmentation is to identify the unique needs of groups of customers and to efficiently serve those needs," said Lee Levitt, director of IDC's Sales Leadership Board. "Some customers require extensive handholding and large account teams. Other customers expect specific industry expertise from their account manager or account team. Smaller accounts must be served efficiently by territory account managers covering 30-50 accounts or by channel partners."

Feedback from IDC survey research participants shows that customer buying dynamics and support requirements vary by segment, and an effective sales segmentation strategy will identify both the specific segment requirements and the investments necessary for success.

"Effective segmentation strategies must consider the scope and quality of data necessary to conduct useful segmentation analysis and the range of investments required to serve accounts across segments," continued Levitt. "The management practices necessary to effectively manage the people deployed around the world on sales and support teams, the magnitude of the 'upside' in properly segmenting and serving customers, as well as the ability to effectively measure the ROI of those investments, are also crucial elements needed for a successful strategy."

IDC's second new study in its series of best practices in sales improvement processes analyzes the importance of share of wallet (SOW) as a critical sales element. IDC believes SOW provides a fundamental measure of opportunity and upside, providing actionable information on where to invest sales assets more accurately than perhaps any other single measure. With precise SOW information, sales executives can identify both the magnitude of specific opportunities and the resources and activities necessary to capitalize on those opportunities.

As IDC defines it, SOW is much more than a simple measure of share of spend for a specific budget line item. It encompasses both data (customer buying history, historical and forecast account spend, and the representation of relationships between business units) and an analytical and prescriptive process (information gathering, account planning, customer interaction, opportunity analysis, and resource allocation). Implemented effectively, this broader application of SOW provides the road map to growth in revenue, profitability, and customer satisfaction on an account-by-account basis.

IDC's study, Best Practices in Sales Performance Improvement: Effective Sales Segmentation Strategies, (IDC #204371) provides a detailed examination of the best practices employed by technology companies to segment their customers and provide differentiated sales assets to those customers based on opportunity and commitment. This study also focuses on the issues of data quality and segment definition and management.

IDC's study, Best Practices in Sales Performance Improvement: Implementing Share-of-Wallet Processes (IDC # 204453) provides a detailed examination of the share-of-wallet (SOW) best practices employed by technology companies. It also discusses the critical success factors and best practices necessary for any vendor to effectively implement a robust SOW strategy.

Both reports are published by IDC's Sales Leadership Board, which provides research and insights to help technology sales organizations improve the productivity and efficiency of their sales activities. Through this research, IDC analyzes the strategic sales management and operational issues and the direction of overall technology vendor sales performance to help guide IDC clients in their sales planning, investment, and allocation decisions.

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. Over 850 IDC analysts in 50 countries provide global, regional, and local expertise on technology and industry opportunities and trends. For more than 42 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting .