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How do you apply customer stratification to a service or software company? (Webinar Attendee Question)

This question was asked by an attendee during the Proformative webinar "Using Customer Stratification and Cost to Serve Information in Your Sales Efforts to Maximize Profits" held on October 9, 2012.  You can view a video of the webinar and access the presentation here:


Topic Expert
John Kogan
Title: CEO/CFO
Company: Proformative, Inc.
(CEO/CFO, Proformative, Inc.) |

Customer stratification is nearly always customized to some degree but the main parameters tend to remain the same. For service firms, however, the trade off between Cost to Serve and Price is the entire game (no COGS to speak of). So the left axis should be price and the right axis should be more detailed since more is at stake. Otherwise, the model is the same.

Answer provided by Dr. Barry Lawrence, Program Director, Industrial Distribution Program, Texas A&M, speaker on a recent Proformative webinar on the subject of customer stratification.

John Mansfield
Title: Vice President Business Development
Company: Graybar
(Vice President Business Development, Graybar) |

As a distribution company, I don't have a lot of expertise in how to apply the model in a service or software company. However, I do believe that the concepts put forth by Dr. Lawrence and his team in the research can be applied to more than the distribution business. Once you begin studying customer stratification, you will find yourself applying stratification to different parts of your life.

The key concept is to identify the key dimensions that impact your business. Then determine the factors that influence these dimensions. Once you have agreed upon the factors, then you must determine whether they are relevant and reliable, and of course measurable.

If you can answer all of these questions for your business, you are well on your way to a customer stratification model.


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