Background and challenge

A large industrial manufacturer in and supplier to the construction sector was looking to transform its go-to-market strategy and customer proposition. The company had experienced a number of years of declining margins and market share, with a lack of differentiation in its customer proposition considered to be a key driver.

In order to begin a transformation, the client first needed a detailed understanding of its customer base. L.E.K. Consulting was engaged to undertake a ‘needs based’ segmentation of the client’s customers that would inform the development of clear and compelling customer value propositions, and enable the client to differentiate and win in its market.

Approach and recommendations

Extensive research was conducted to identify the wide range of needs, behaviours and perceptions of supplier performance throughout the ‘customer experience’ (see Figure 1 below). Data and insights were collected through customer interviews, a large quantitative customer survey, and one-on-one observations and ‘ride-alongs’ of customer businesses.

Figure 1

Using the quantitative output, we performed quantitative K-mean clustering analysis to develop the initial segmentation of customers based on their common needs and behaviours. These results were refined with the qualitative feedback and through various workshops with the client executive team in order to test and validate customer needs, as well as to apply a commercial overlay to the clusters.

Figure 2

Six distinct segments were identified. The segments were then prioritised based on their commercial attributes, with consideration given to:

Assessment of customer attractiveness and profitability generated for the client through detailed analysis of end-use market drivers, volume, price and margin trends

The ability of the client to win customers in each segment given the client’s position in the competitive landscape

Following the finalisation of the segmentation, a number of working sessions were conducted with client executives and client subject matter experts to determine the strategic objective that the client should have for each segment as well as to draft a new customer value proposition for each segment. The resulting implementation roadmap identified the key actions to execute the strategy and capabilities required for the client to be successful.


The executive team fully endorsed the segmentation and go-to-market strategy. This work provided the client:

Alignment on the prioritisation of segments and the required actions to improve go-to-market effectiveness and profitability

A pragmatic and practical implementation plan that highlighted the core capabilities and actions considered necessary to achieve the objectives

L.E.K. continued to work closely with the client’s internal team as it detailed and executed its delivery plan, including an assessment of the transformation required in its operational business to support the new go-to-market strategy.

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