Customer Segmentation – But by What Exactly? The Puzzle in B2B and B2F Agribusiness
In B2B — and especially in B2F (Business to Farmer) — most companies serve a mix of large, medium, and small customers. A common practice is to classify them in the CRM system as A, B, and C clients. On the surface, this seems straightforward. But in reality, when you ask people to explain the boundaries between those categories, you’ll often get different answers from everyone — and more questions than solutions.
What exactly are we measuring, and who decides?
Many will say: “By the size of the customer’s business.” Fair enough — but what do we actually mean by “size”?
- Are we talking about production volume, total turnover, net profit, market capitalisation, number of locations, or market coverage?
- Or is it about our sales potential with them — measured by volume purchased, total sales value, gross margin, or stability of demand?
One thing is certain:
VOLUME ≠ SALES ≠ MARGIN ≠ SECURITY
The problem of context
Does the classification refer to the global market, a regional segment, or a single product line? Is a global A-level account automatically an A-account in your territory? And is a large enterprise automatically an A-customer for your portfolio, even if your offering is not central to their operations?
These questions alone can fuel hours of valuable discussion. And once you involve not only the sales team but also logistics, procurement, finance, and marketing, the debate becomes even richer. In regional sales structures, for example, not every rep has access to very large customers — and some may see a diverse “patchwork” of smaller customers as the real strength of their region.
It is worth investing time to solve these riddles and develop a shared language across the business.
The reality check
Once we’ve classified customers, we still need to ask whether an A-customer — however we’ve measured them — is truly an A-customer for us.
- Can we realistically serve their entire potential?
- Do we want to?
- Is it within our capabilities?
- What is the risk of dependency?
- Can we maintain our average margin?
Very large customers can also be risky. If your innovative idea works for them, they might decide to internalise it. Many suppliers — including in agriculture and food — have experienced this. Not everything can be protected by patents, and vertical integration is a popular strategy in many boardrooms.
The distinction between a large buyer and a genuine business partner is critical.
Lessons from the market
Many mid-sized companies have been damaged — or even destroyed — by overcommitting to a single major account, neglecting the rest of their customer base. For young agribusiness start-ups, being consumed entirely by one “dream client” can be the fastest road to collapse.
The fundamental question is: Which customers do we want, and which can we actually serve profitably?
Only when we have a clear, agreed segmentation system can we have this conversation constructively. This is exactly why we teach Customer Structure as a dedicated seminar — aligning the entire sales organisation with an agreed view of the market.
Practical approaches in agribusiness
In practice, it can make sense to split sales functions between purely transactional buyers and long-term strategic partners. Some companies even establish dedicated teams for micro- and small-scale customers (including smaller farmers or regional co-ops), because their management, fulfilment, and growth strategy differ fundamentally from those for major corporate accounts or large integrated farms.
In the end, customer segmentation is not just about sorting names into A, B, and C — it is about aligning your entire commercial strategy with the realities of your market, whether that’s serving international grain traders, processing plants, agri-input distributors, or family-run farms.