Segmentataion Success
Man on a laptop and phone at the same time
Too many startups wait to segment their customers. CSMs try to be all things to all people and they default to whiteglove for everyone which burns out the team.
Customer segmentation allows us to tailor our approach to the unique needs and potential of different customer groups. This isn’t just about personalization—it's about strategic alignment of resources to where they can have the most impact. Because in a start-up there are never enough resources to go around.
Tactical Steps to Implement Effective Segmentation:
1. Begin with data. Analyze customer usage patterns, renewal and upsell patterns, and feedback to identify distinct segments. These might include high-growth potential clients, at-risk clients, or those requiring minimal support based on what intervention points have had the highest impact in the past.
If you haven't kept good records (start now!) make some educated guesses.
2. Define Service Levels: High-touch services might be reserved for those with the most growth potential or highest risk of churn, while others might benefit more from scalable, tech-driven support solutions.
Don't waste your time requiring CSMs to do high-touch activities like exec QBRs if your customers don't want those services. Figure out the most impactful touchpoints for each customer type along the customer journey and put your resources there.
Consider the cost of context switching and knowledge building.
CSMs that are experts on their client's business are very effective. But if you assign your CSMs dozens or hundreds of different businesses, they will be spread too thin to add value beyond the basic technical functions of your product. For example, grouping a book of business with all healthcare customers would allow the CSM with those accounts to catch industry trends for healthcare and provide benchmarking insights across their book of business that their customers will love.
2. Customized Success Plans: For EVERY segment, develop a clear, actionable success plan that aligns with their business objectives and your resource allocation. This could include varying levels of onboarding intensity, regular check-ins, and access to premium support.
You should know if you are on track to a renewal or upsell based on that account's individual ROI criteria.
3. Empower Your Teams: Equip your customer success managers (CSMs) with the tools and training to understand and implement segmentation.
Focus on taking things away not adding more!!!
The point is to make CSM's lives easier not create bureaucracy! Avoid creating playbooks that focus on tasks instead of allowing enough autonomy to achieve outcomes.
Clear guidelines on service levels ensure they can make real-time decisions that align with strategic goals.
4. Monitor and Iterate: The only constant in SaaS is change. Review the effectiveness of your segmentation and service levels. Use customer outcomes and team feedback to refine your approach.
But avoid the tendency to make tweaks that will cause frequent territory realignment.
There is a real relationship cost to switching CSMs on an account every year (or God forbid more often than that).
By implementing these targeted strategies, you not only get more bang for your buck with each CSM, but will have happier customers too.
