Phase 1

Segment Your Business

And start seeing where your profits are hiding

Uncover the Untapped Potential in Your Organization

The feeling of being stuck is universal. Your team is working harder than ever, yet growth is a grind and profits feel elusive. This is the natural result of treating all business as "good" business. You're spreading your resources thin across every customer, every product, and every task, without a clear view of what truly matters.

Phase 1 is the moment you stop guessing and start knowing. It is the foundational step of the 80/20 process, designed to bring undeniable clarity to your business by revealing its true structure. We use your own data to show you precisely where your resources should be focused for maximum impact.

This isn't just about a report; it’s about a new way of seeing your company.

What is Segmentation?

Segmentation is the process of using your financial data to separate "unlike businesses" and group "like businesses." We'll analyze your customers and products over a full year to uncover the simple, mathematical truth of your organization.

See how segmentation frees up the resources you need to grow your business.

Segment your Customers & Products

Before we dive into the details, it's critical to understand our core definitions:

• A Customers are your "critical few"—the small percentage of customers (typically around 20%) that generate the vast majority of your revenue and profit (around 80%).
• B Customers are the "trivial many"—the remaining customers who, while numerous, account for a small percentage of your overall revenue and profit.
  
  
• A Products are your "critical few" products—the small percentage of your product line (also around 20%) that drive the majority of your sales and margins.
• B Products are the "trivial many" products—the remaining products that contribute a much smaller amount.
  

With these definitions in mind, we will segment your business into four distinct quadrants, or "Quads," based on the 80/20 Principle:

• Quad 1: The Winners
  
  
  • A Customers buying A Products.
    
  • This is your "fort." It’s your most profitable, highest-performing core business. This is the area you must protect and grow.
    
• Quad 2: The Must-Haves
  
  
  • A Customers buying B Products.
  • Your best customers often buy less-popular products. This is essential for protecting your core relationships and maintaining your position as a trusted partner.
    
• Quad 3: The Good Business
  
  
  • B Customers buying A Products.
    
  • These are smaller customers who buy your best products. This is good business, but it's important to manage it efficiently so it doesn't become a resource drain.
    
• Quad 4: The Resource Drain
  
  
  • B Customers buying B Products. 
  • This is the business that creates unnecessary complexity, consumes a disproportionate amount of your resources, and is often unprofitable.
    

This simple stratification reveals your biggest opportunities and your biggest challenges.

Understand the foundational steps to seeing your business with crystal clarity. 

Learn how to group your business into four simple, profitable quadrants. 

How We Do It: The Data Collection Phase

The first step of segmentation is collecting the right data. We will work directly with your finance team to get a clear, accurate snapshot of your business. We know that messy, siloed data is the reality for most companies. That's why we guide you to focus on progress, not perfection, using simple tools to wade through the complexity and get the data to about 90% accuracy—which is more than enough to make transformative decisions.

We will focus on two key decisions to ensure the data is accurate and actionable:

• Defining "Customer": We will help you define what a customer truly is in your organization. If a single parent company has multiple locations that see themselves as one, we'll treat them as one. This ensures you can serve them appropriately.
  

• Defining "Product": An item or SKU isn't always the right definition. We will define "product" in a way that is commercially meaningful and that your operations team can actually act on.

Getting this data right is crucial because it becomes the foundation for every decision you make going forward.

Get a clear picture of how to collect the right data for your business. 

 Learn the simple decisions that make your data actionable and reliable.

 What You Will Gain from Phase 1?

The Power of Clarity

By completing the Segment phase, you will achieve unprecedented clarity and a unified vision for your entire team. The data-backed insights will provide you with a powerful advantage, allowing you to:

• Find New, Hidden Profits. You will uncover massive growth opportunities that are already hiding within your existing customer base, without having to spend more on sales or marketing.
• Save on Wasted Costs. Uncover the money-losing parts of your business that are consuming up to a quarter of your resources, allowing you to cut unnecessary costs and reallocate those funds for growth.
• Empower Your Team. Give every person in your organization, from the CEO to the front lines, the tools to instinctively make more profitable decisions.
• Gain a Competitive Advantage. Know exactly which markets you serve best and where you are most profitable, allowing you to focus your sales, marketing, and operational efforts with surgical precision.
• Align Your Entire Organization. Get your whole team on the same page, focused on the same high-impact opportunities, and moving in the same direction
  

This is the most freeing and empowering step a business leader can take. It’s the moment you stop firefighting and start leading with confidence, backed by data.

 What areas do people find themselves struggling during the segment phase

What are some potential pitfalls during the segment phase