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Harder. Better. Faster. Stronger. Segmentation Delivers Results

July 30, 2018

Marley Wagner

Category: Customer Segmentation Strategy, Customer Success as a Service, Customer Success Strategy

I’d be preaching to the choir if I droned on about the importance of segmenting customers to snag results. That said, in this ever-changing world it is easy to miss the boat on how to effectively do that — even for the biggest data hounds among us. It requires us all to think differently and do differently.

The Goldilocks sweet spot: Quality metrics + invested analysis

It’s easy to miss segmentation issues. They can often look like problems caused by a thousand different things that aren’t remotely related to segmentation. At the end of the day though, when your segmentation is on point, you won’t see customer loss and stagnated growth. So if you aren’t seeing the results you expect, it’s time to take a long hard look at how you’re segmenting your customer base.

That’s when you start thinking differently. Evaluate your analytics from new perspectives and dig deeper into them. Look at indicators like:

  1. Health score
  2. Utilization rate
  3. Revenue growth per customer

Identify high-risk customers before they even know they’re a risk

When you take a hard look at the overall financial value of your customer in comparison to those indicators listed in the last section, the level of customer churn risk begins to crystallize.

Even better, as you glean potential problems or rising issues, you’re then empowered to develop nurturing processes around them to course correct. Begin with three simple questions:

  1. Which customers are scheduled to renew this quarter?
  2. How many are currently engaged in a strategy to keep their accounts?
  3. How many have requested cancellations?

Answer these questions, and you can then map necessary touch points to the segments that need it most. As you do that, new metrics will emerge to track conversions and successes.

Check out our white paper, Success Through Segmentation. Learn how to identify, prioritize and address issues that lead to high churn risk.

Look beyond whether users have logged in and how often they’re using your product. You need to know so much more. As a for instance, dial into:

  • Number of activated seats
  • Types of user roles
  • Volume of support requests
  • Utilization of features and functions
  • Level of on-boarding engagement

From there, you can determine the appropriate CS approach to begin segmenting your customer base.

Three bear dilemma: the workload is too big, the team is too small

Everything covered above is awfully big talk. I get it. Delving in deeper, increasing your level of data analysis, and then building in added processes and touch points is enough to break the strongest of resource-strapped teams.

If you’ve been keeping up with our blog, you know our solution by now. It starts with an understanding and acceptance of the 80/20 Rule. (Read more about it in our blog post here.) To find real gains in CS, you have to be able to scale. That starts with prioritization and ends with an experienced partner.

When you have a partner who truly understands the nuances of Customer Success and microcosms that support (or hinder) the customer lifecycle, it is possible to scale without incurring additional overhead, employees and workload.

You get to continue with your hands-on service earned by your top customers while a partner *ahem like ESG* can evaluate what’s happening with those top-tier customers, determine what can and cannot be replicated for your lower tiers, and will look for meaningful opportunities to engage with even your smallest clients through a balance of tech and human touch. (Check out this white paper to learn more about that.) With an opportunity to deliver significant returns and overall cost savings, it’s a low risk/high reward proposition for any company — including yours.

Clearly there isn’t a singular segmentation formula out there that will solve everything for everybody. Each customer journey is unique to the product and business, and each business is looking for particular outcomes. So while there are similarities that can drive the process for identifying appropriate segmentation approaches, a level of customization to achieve optimal results is still required.

Learn more – Discover how to identify, prioritize and address issues that leads to high churn risk. Download our white paper, Success Through Segmentation.