One of the greatest challenges facing Customer Success leaders is how to provide a great customer experience while sustainably growing their team. In addition to the challenges of scaling a Customer Success organization, you also have to consider that not all customers have the same needs. Some customers may want to self-serve when they need assistance, others may want regular engagement such as monthly status meetings and still, others may want to visit their technology partners every quarter to learn about their new product offerings and future roadmap items. Given that it is impossible to truly tailor a Customer Success program to every single customer, the vast majority of Customer Success organizations group their customers into segments to provide common services to similar customers. Per TSIA benchmark data, 87% of Customer Success organizations have some sort of customer segmentation. Segmentation helps companies decide how to best divide and manage their customers in a model where customer engagement is not equal among all customers. Segmenting your customers allows you to:
- Group customers in a way to help improve their overall customer experience.
- Manage customers following an established set of processes and procedures for each grouping.
- Closely monitor and respond to issues, before they become challenges, challenges before they become a risk, and risk before they become churn.
- Identify which customer accounts can help develop additional market growth and expansion.
- Group customers in a way that creates efficiency and repeatability in how your company engages the customer for success.
As a former CCO and Customer Success Executive, I learned firsthand that the customer experience is a central component of any Customer Success organization. I also found that implementing a few key strategies around segmentation can make a huge impact. If you’re wondering where to start, here are the first steps you can take towards personalizing your customer experience through segmentation.
Create A Customer Segmentation Framework
When creating an initial customer segmentation strategy, consider the most logical groupings for your customer base. For example, you can segment customers based on attributes such as account size, industry, geography, products/services purchased, the complexity of solutions purchased, and/or their growth potential.
As shown above, the most frequent segmentation attribute is account size (based on company revenue or the number of employees). When utilizing a pyramid approach (which usually follows the sales approach), it is important to align the account segmentation to the strategy of the company. The second most common segmentation attribute is geography. This is very common due to local language considerations, time zone, and cultural nuances that change the dynamic of the customer engagement. The third most common segmentation attribute is strategic growth potential. Having this view answers questions like, “How much value is the customer bringing to your organization?”, “Does it cost you more to take care of them than to have them churn?” and “Can they grow with us, or are they stagnant and will likely never purchase additional products and services?”This initial segmentation is considered fairly static, but will serve as a baseline for the types and frequency of engagement your Customer Success team will provide to your customers. An initial segmentation strategy allows you to create or tailor your existing customer engagement framework to each of your segments by providing different levels of service based on the needs of customers within each segment. Elements of the framework to tailor include your customer journey map, KPIs and metrics, and playbook elements.
Build Your Engagement Strategy Around High-Value Customers
Once you have established your customer segmentation strategy and the levels of service have stabilized for each segment, you can begin to focus your engagement on the “high-value” customers. This level of customer segmentation requires a high degree of customer engagement that is built on top of your “standard” segmentation strategy. Here, segmentation should be focused on the customers where there is the most potential for revenue growth and creating “lighthouse” customers. Generally, an initial segmentation strategy is focused on an inside-out approach (i.e., a basic segmentation model that allows for the current customer engagement model to be tailored broadly per segment). This next level of segmentation creates a differentiated experience that takes customer-specific needs into consideration in order to achieve very successful business outcomes for your customers. When deploying this level of segmentation, the following questions should be able to be answered for each customer:
- What is the business outcome the customer is trying to achieve, and have we jointly developed a success plan with them to achieve those goals?
- Have we completed a journey map that includes input from the customer, and can we provide an experience that meets or exceeds their expectations?
- What is the existing and future opportunity for this account?
- What is the right mix of digital and human engagement to achieve their desired business outcomes, deliver the required customer experience, and create a sustainable pipeline?
- Can we measure customer adoption and maturity with our products/services to accurately predict long-term success in our partnership?
Because this level of segmentation is reserved for a limited number of high-value customers, the customer journey can be dynamic and will change over time. Therefore, it is important to create a standard outside-in approach to engaging with these customers that allows for the customer to help drive the journey map as it evolves.
Deliver a Tailored Experience Through Personas
Once you have tailored your segmentation program to provide a unique level of service for your largest and most important customers, the focus of the customer engagement program can turn to the individuals within those organizations that drive the partnership. Champions and sponsors from different parts of an organization can have distinctly different business goals, objectives, and needs in the customer journey. To address those differences, you can create personas as part of your customer journey map to account for the different goals and objectives for the various buyers at your customers. Many marketing organizations create content for various personas that sales teams utilize during the sales process. If that’s the case in your organization, ensure that the personas that sales and marketing use are consistent in the Customer Success journey as well. Understanding that the buyers and users of your products and services may be different, you want to make sure that there are no gaps in delivering on the "promise" that sales and marketing make pre-sale to these stakeholders. The core tenet of utilizing personas is to be as efficient as possible in the engagement with the different customer stakeholders while still helping the individual people achieve their group’s business goals and objectives. This requires an understanding of the following for each individual stakeholder:
- Who are the key stakeholders and users within each organization that deploys your products and solutions?
- What are the specific business goals, objectives, and needs of each stakeholder that you will engage with during your partnership?
- What is the best approach, engagement model, meeting frequency, etc. for each stakeholder to ensure a great customer experience and help them achieve their desired business outcomes?
Segmentation Realization
There are many elements to consider when creating a customer segmentation strategy. The key is to start with some standard attributes that allow you to group your customers together to provide a consistent level of service for the customers within each segment. Once your core customer segments are established, you can tailor your high-touch program to create true “lighthouse” customers and ultimately create personas that allow your Customer Success team to help each individual stakeholder achieve their business goals and objectives.