A Packaging Company Unboxes a New Go-to-Market Strategy
A fresh approach to customer segmentation enabled the company to boost EBITDA and deploy its sales resources far more effectively.
The product of a concerted rollup effort, PackagingCo* is a leader in customized packaging solutions. But that rollup activity left it saddled with different reporting systems and business practices across multiple business units, which hampered decision making and visibility into pricing and led to unclear go-to-market strategies.
We worked with the company to address these critical issues. One key focus was to identify the highest-value customers and apply sophisticated segmentation analysis so that sales reps could be efficiently allocated, thanks to a well-structured coverage model. Given that 15% of PackagingCo’s customers account for 80% of its revenue, a stronger focus on priority customers was seen as a key opportunity for growth.
We worked with the company on a three-part approach to superior customer segmentation. First, we created a consolidated database of existing customers across one of the company’s primary regions. The database included descriptors (location, business unit, assigned sales rep, and more), financials (revenue, margins, historical sales trajectory), products sold, and relative growth potential, which was triangulated based on customer size and end-market packaging spend.
Then, we helped PackagingCo categorize its customers into four segments based on financial inputs (revenue, margin contribution, growth potential) and strategic inputs (consumer-facing end market, purchased product variety, order size, proximity to a PackagingCo location, etc.). That enabled us to outline a sales strategy that included a coverage model across customer tiers. For example, relying on virtual sales to address the long tail so that reps could devote their time to a select group of high-value accounts.
As a result of its new go-to-market approach, PackagingCo saw EBITDA improve by 50% to date and the value of the enterprise more than double within one year. This effort yielded a number of related benefits, including the creation of a cohesive go-to-market team that has achieved new levels of operational and headcount efficiency, identification of repricing opportunities when serving certain lower-priority customers, and freeing up of manufacturing capacity.