What is the best way to segment customers

Segmenting Customers- What is the best way?

A lot of us believe that all customers are equal. Let’s accept that not all customers are equal. We want to segment customers so that we can work with each one of those segments in respective ways, but on what criteria do we actually segment customers?

How to segment customers?

One of the golden criteria is how much are they paying you, or sometimes you tweak it to the ability to pay from that particular customer. So we put them in tier one, tier two, tier three. The enterprise or the highest paying customer, the middle paying customers, and the long tail or the low paying customers.

So that’s always been there, but this segmentation sort of helps you deliver based on your expectations and makes sure that your revenue is protected, and that’s one of the ways that you should certainly segment customers.

Onboarding Guide

Read: Customer Segmentation drives Customer Success

Recommended way

A unique way in which segmentation is always recommended and that you’ve really valued segmenting customers is on the basis of the use cases for which they’ve actually purchased your technology. What is the use case that they want to serve using your product, and that might very broadly be related to the persona you’re selling it to?

We look at personas in two ways, personas of individuals: Are you selling to a middle manager or to executives? Or are you selling to the individual contributors in a B2B environment?

That’s one end of the persona, but the other end of the persona is what we call the profile of the organization. It is like the overarching umbrella, which fundamentally tells you, “I have an Ideal Customer in an enterprise, or I have an Ideal Customer in a startup, and those two personas will obviously be very different.” So looking at the profile of the customer, organization persona, and looking at the individual’s person you can segment your customers.

Segment by use case

And then looking at the use cases will be a brilliant way to segment your customers, especially if you’re trying to nail a certain problem, and you realize that once you segment them, interesting facts emerge about your customers and you know that you are very successful in solving a particular use case. It can be very mixed if you’re talking about a mixed type of enterprise which is tier one, tier two, tier three, and you will see extremely contrasting insights.

For example, in CustomerSuccessBox, you can choose various attributes such as health, usage, frequency, users, subscription, etc. based on your business requirements. You can even put multiple conditions to segment the customers more efficiently.

segmenting customers

Pro tip: Business Case for Customer Success

Takeaway

Customer segmentation helps you boost conversions, reach your audience, know your customer better and communicate more effectively with customers to meet their needs.  The Customer Success Manager manages their key relationships and works towards delivering value to customers through Customer Success Softwar. So, begin working on your customer segmentation strategy by using the right customer success platform and use our recommended ways for support along the way.
 

Customer Churn

Swagata is a growth marketer at CustomerSuccessBox. Advocate for great customer experience. She is an avid traveler and when she is not working always on the lookout for new places to explore.