Customer segmentation is an important step in your business process. It allows you to be more agile and responsive to your prospects and customers. Faced with a given category, you will be able to adapt your message, your commercial and communication actions. The objective is to better convert your prospects and to retain long-term loyalty, all of your customers. We are therefore going to discuss customer segmentation, which is an important step, by explaining to you why it is useful to segment the means at your disposal.
What is SaaS customer segmentation?
In general, segmentation is the operation that consists in dividing a population of individuals into homogeneous subsets or, into subsets sharing one or more common attributes. Each subset constitutes a segment.
Example :
- You have a user base: it’s your population of individuals.
- You segment your base according to the “Gender” attribute. You have created two segments: the female segment and the male segment.
The segments are here built with a single attribute: gender. But we can also create segments using several attributes. For example, the segment for men under 50. In fact, moreover, segments are always obtained by a combination of several attributes. The choice of relevant attributes and their combination sums up the art of customer segmentation and its difficulty.
Difference between Segmentation and Targeting
- Segmentation is a method of putting intelligence into a database – in this case a database of prospects, customers, or users. Segmentation is an operation of division, of cutting, in short, an operation of analysis. In a sense, segmentation is the basic intellectual operation (the one that precedes synthesis). Segment makes it possible to classify individuals, to know what its customer database is made of, what are the large groups of individuals that make it up.
- Targeting is the operation that consists in choosing the individuals who are the recipients of marketing action. This is a one-time operation, which is repeated each time you create a new marketing automation campaign or scenario.
There is obviously a relationship between segmentation and targeting, a relationship of conditionality. Segmentation is the condition for the possibility of targeting. It is difficult to see how you can target a marketing campaign if you do not know which segments constitute the base individuals. And as we said above, the objective of segmentation is to allow the company to improve the targeting of its actions, operations, campaigns, marketing scenarios.
Why is segmentation the number one topic in terms of customer success?
Insofar as Customer Success aims to shift customer relations from a reactive to a proactive mode, knowing how to address them is essential. Segmentation is the qualification of your customers, in order to better choose the way in which you will address them.
To do this, it is essential to identify various elements: Is your product complex? Are there many customers? Are your customers familiar with the tech world? Do they need robust support? Are your clients autonomous? Do you have many? Are there different “persona”? Will they be better able to read the documentation? To have a telephone conversation? To follow individual/group training?
How to segment B2B customers ?
Customer segmentation best practices-
The best practices outlined below will help you optimize your segmentation schemes so that you deliver a superior customer experience while prioritizing your resources.
1. Segmentation facilitates customer service by aligning goals with customer goals and ensuring that customers receive lasting value. If you see a tendency towards or away from the best customer experience, there are steps you can take to influence the situation. It is important that your actions are guided by direct customer information and that you anticipate practical needs in the future. Many goals change during these times, so keep your client’s goals up to date.
2. Don’t be afraid to extend customer segmentation variables beyond preliminary subdivisions. The more specific and unique you are when grouping your customers, the more likely your message or engagement will impact your customer’s daily workflow. These more complex characteristics can include customers with at least one update cycle, customers with multiple escalations, or companies with an offline sales model. Note: Over time, the subdivision will require more maintenance by the administrator or customer success team. Try to link fine-grained segmentation to your valuable business goals.
3. You need to be able to respond quickly and effectively to customer information. If your customer success team is too distributed or you abandon your micromanagement account, you will run out of resources. If the introduced variable is only 10% of the existing segment, it may not make sense to pay special attention to it (depending on the number of customers involved). Each segment you manage is different, so it’s important to balance the time you invest with the rewards you receive.
4. Members of the customer success team need to be able to visually understand the status of all accounts under their control as part of their normal morning routine. You need to be able to automatically track performance in real-time by comparing customer behavior and progress with metrics that are known to impact business success. With the early warning system, you can proactively and quickly respond to changes in the customer experience, take advantage of renewal and upsell opportunities, and revive customers who are under threat of unsubscribing. increase.
5. Customer segmentation aims to provide close monitoring of product use and customer progress. This ability is as important as the action you are ready to take when an opportunity or danger arises. Transforming information into proactive and comprehensive results requires standardized communication processes, workflows, responses, campaigns, and communication.
Additional Read- Playbooks for Onboarding
6. Customer experience is the responsibility of everyone in the company. Sharing the information gathered from customer segmentation enables all team members to respond quickly, informedly, and proactively to all customer contacts. The customer success team needs to work directly with other internal stakeholders to develop the best possible solution.
Once you find a valid solution for your customer segment, try incorporating it into your communication with other accounts that may be linked. Many customers today are forced to cut costs. Can you offer downgrades or other support resources to retain your customers?
How do you segment users during their onboarding ?
In SaaS, two onboarding segmentations exist. The two can coexist, and each segmentation will have its own Customer Success strategy
High Touch:
High Touch segmentation is the fact of having very frequent exchanges with them and in one-to-one. Customer Success will almost adopt the posture of a project manager, where he will have to draw up the long-term strategy of his clients. This segmentation will be particularly useful for complex software, VIP clients, clients in the onboarding phase, clients with little autonomy.
Be careful, it is useless to adopt a high touch strategy if there is nothing to say during the physical / telephone points. Likewise, although we would all like to pamper our customers by calling them continuously, this segmentation is not suitable for all software, and may not be scalable.
Low Touch:
It is the fact of having a lot of customers, but few direct exchanges with each of them, except in exceptional circumstances. The Customer Success Manager will only intervene in these cases if the customer is in poor health or in a critical situation. The work of customer success will then be the articulation, optimization, and constant automation of the customer’s life cycle. This segmentation will be adapted to software that is easy to use, or even to customers with little internet access (and therefore little time to devote to training)
How to choose the right segmentation?
When you start in Customer Success, you want to opt for High Touch segmentation. It allows us to control all the customers, to have enriched feedback on the quality of the tool… But let’s be realistic: a company that grows and a company that has more and more customers, and such segmentation does not exist. is not scalable.
It is, therefore, more favorable to start with a High Touch segmentation than to divide your customer portfolio into High Touch and the others into Low Touch. You will thus be able to better address each of the populations and better scale!
However, many companies are adopting a 100% High Touch model, while others are adopting a 100% Low Touch model. Nothing beats testing what suits you best, taking into account the complexity of the tool, the capacity of your customers.
Conclusion
By taking the time to analyze who your customers are and what they really want from your business, you can take a smarter approach to your marketing spend and sales efforts while increasing your customer base and success.
