Three Easy Segmentation Strategies for Customer Success Teams

How do you handle a new customer? Naturally, there’s a hand-off from sales to customer success but who on the CS team gets the customer? Is it the sales rep’s favorite CSM? Is it the first/last to respond on Slack? Perhaps it’s the next person in a rotation. If this sounds like you then you suffer from a lack of segmentation — and we’re here to fix it.

Customer Segmentation is nothing more than sorting customers based on a set of characteristics. A segmentation strategy is what allows a company to move from luck-of-the-draw to maximizing efficiency and enhancing the market-fit feedback loop.

Risks of No Segmentation Strategy

Before we dive into my three recommended segmentation strategies, let’s go over the risks of having no segmentation strategy.

• No expertise development: The goal is to be come a trusted advisor and that means learning their business/field. The development of a CSM is minimized when customers are essentially random.
• Inability to provide feedback to sales/marketing: A critical function of CS is to provide feedback to sales and marketing — the two other pillars of the Growth engine. With a random distribution per CSM, evidence tends to remain anecdotal and it’s more difficult to identify trends in the customer base.
• Unfamiliar onboarding: Onboarding is truly a make or break moment in any customer’s lifecycle. A lack of familiarity (caused by bullet one and two) means precious onboarding time is spent getting to know the customer at a very basic level when it should be focused on driving towards first value.

Now, on to the three segmentation strategies I recommend emerging CS teams…

Segment by Plan Type

If your company offers multiple subscription plans then this is low-hanging fruit. Whether subscriptions are differentiated by features, size, or both, customer pain points and needs will naturally coalesce around plan type.

How can this help? Having a dedicated CSM — and eventually a team — focused on for example the lowest tier plan means they become experts in handling small accounts. Some initial assumptions we can make are that the smallest accounts will have less resources to initially learn the software; however, they won’t need to learn about bulk managing 1,000 users. Conversely, the team responsible for enterprise accounts will keep user management and adoption at the forefront of their onboarding strategies.

Segment by Industry

Industry is a broad term here, so let me explain this with an example. Your company provides mobile data collection services (forms on phones), which has a wide range of applications. Engineering companies use it for safety inspections, Utility companies use it for field maintenance, and agriculture companies use it for seed trials.

Each of these industries have common goals, language, and operational challenges. The power of segmentation is that over time your CS team become pseudo-experts in that particular industry. This is a tremendous competitive advantage! Speaking the same industry language established credibility and when you truly know about a given industry your CS team can assume the role of a trusted advisor.

Segment by Functional Use Case

Although, functional use case can seem similar to industry, we’re going to focus less on the customer’s business and more on the software’s usage here. Going back to my previous example, Engineering companies may use the software for more than just safety inspections. Perhaps it’s also used for inventory management or work order tracking. The way in which a software is used will distill down into key features. Becoming foremost experts in a specific feature or set of features can yield tremendous benefit in terms of feedback to other teams. Product can make targeted enhancements, marketing can refocus messaging, and sales can explore new lead avenues. Segmentation by functional use case can also help cut across traditional market segments allowing your team to identify new patterns and trends.

What are your favorite segmentation strategies? What challenges have you faced moving from no strategy to an initial strategy? Leave your experiences below in the comments.