Chris Neal and the CMB team recently completed a segmentation of the server market for Dell. The following is a brief Q & A with Dell's Chief SMB Researcher, Barry Jennings, discussing his thoughts on segmentation and working with CMB.
CMB: Based on your experience, what are the key determinants of a "successful" segmentation project for Dell?
The key to successful implementation for us has been a very early commitment to change. I have been at Dell way too long and I have done segmentation a number of times. When it comes from the perspective of "this is a great idea, we should go do it and then figure out what happens," it usually fails. When it comes from a perspective of "we don't understand what's going on, but this will help us frame things out and better deal with it," that does not work either.
But when you go into a segmentation exercise saying "there are a lot of unknowns out there and we need to better understand and check out the market, we don't know how we're going to change, but we are very committed to change based off of what we learned in these key areas," that makes a very meaningful difference. It allows you to bring people to the table who may not really care as much about the research, but they absolutely care about what the research drives. That is how you get through to the organization and get people to take action based on what you've learned.
We did that with this segmentation working with Chadwick Martin Bailey and it worked out quite well. There is a strong cross organizational commitment to embracing these segments. It didn't matter what the segments were, or what the agenda was to begin with, we are now committing to this framework.
CMB: Clearly there has to be a real connection to the business- not just conducting segmentation for segmentation sake, have you seen people make the mistake of running segmentation too frequently?
In the past, there have definitely been times when we used segmentation way too much or in too niche a way, and we have also at times done it too frequently or done it for the wrong reasons, so absolutely. Yes.
CMB: What are some of the internal challenges of coordinating segmentation and what advice would you give in managing those challenges? What role can partners such as Chadwick Martin Bailey play in that process?
First up is commitment, just getting the executive to say, "This is going to be our new gospel." We had a senior management team that really held the organization to the fire in doing this. We quickly brought in the CMB team to be a part of the process very early and very broadly. We had kick off meetings with folks from engineering, from environmental design, from product development and from marketing and advertising. Many of whom who won't utilize the results for a very long time and not in their initial form but whose input and commitment was needed.
For example, the raw segmentation was interesting to my advertising people, but segmentation with the personas and with the perspective around messaging is what they really need.
Bringing them into the very first kickoff allowed the CMB team to hear how we were going to deploy and implement the findings, or hoped to, and we factored that into how the segmentation was built. That way we didn't have to crash through any walls to get people to accept it later on. You are still going to have to explain it but you're not going to have to bend the arms of people to accept it. We have had issues with that in the past because they didn't have any sense of contribution or ownership of the process. Having the CMB team come here and spend a whole lot of time In Austin to help figure some of these things out and do the working sessions, while exhausting at times, led to a very good result.
CMB: I would imagine that goes much further than designing the questionnaire, it’s really thinking through the whole project and its implications?
Absolutely. CMB had to learn our business, or at least learn how we learn our business, which is key because like other server manufacturers, we work with parts from Intel and software from Microsoft so we need to know how everyone else works and act accordingly. That said, Dell operates the business with our culture, our focus on the customer, certain geographical focuses, certain ways we choose to build our product, certain channels we use, etc. When you factor all of that in it creates a whole lot of variables that needed to be thought through and considered as we designed the segmentation.
CMB: You talked about doing a lot of segmentation over the years. What do you think are the biggest differences between conducting business to business and business to consumer segmentation?
I mainly do B to B and I like it a little more because in my opinion it is more real, more grounded and I believe that it is easier to see the actual usefulness within our organization. I think on the consumer side, it can be more fun, sexier, more foundational in nature, and it is definitely something that you build off of, but it’s a little bit further from the direct action.
Usually in a consumer segmentation you have way more segments. You have so many variables to consider and you are trying to reduce your focus. In the B to B world we generally end up with fewer segments and probably have a solution that fits in every segment. It is then more a matter of modifying your tactics and strategies than fundamentally changing your business.
CMB: I know the server segmentation was a pretty recent project, but have there been things that you have been able to do already that have put that research to use?
Yes, we have already used the segmentation in product design decisions and we are using it in targeting decisions as well. We have also taken the profiling questions and scored them against the database of current customers and are using that to improve how we approach customers.
CMB: Last question, if someone was considering or if you are considering a segmentation provider what do you think are the key things to look for?
It’s all about the people.
I have been in research for 21 years. I have been at Dell for 14 of those years and it almost always comes down to the people. Everybody is smart. Segmentation is as much art as it is science. And generally speaking, everyone uses the same tools. Take that away and it just comes down to what type of team is going to show up, how well we are going to work with them, how well are they going to listen to us, how well they factor in our quirkiness, etc.
And in reality, we have worked with vendors that say, “Here is this other segment, you guys should really have a Dell branded store and have a Dell branded store on every corner to capitalize on it.” That tells me you don’t understand my business, you don’t know our legacy and it’s not that it’s a stupid idea but a recommendation like that would have to have a massive caveat.
You need to understand who we are and what our heritage is. I think having people like Chadwick Martin Bailey who listen, who spend the time, and who are more than just methodological purveyors understand your business is key. Because at the end of the day, the methodology is very necessary and it yields a result. What I’m really paying for is the result and a whole lot of other things factor into that beyond the methodology.
CMB: Thanks Barry