Segmentation Strategy for Customer Success Team

Doing more with less is the constant challenge faced by customer success (CS) teams working in a SaaS business. They must find new ways to scale their customer base exponentially with extra resources allocated linearly. For instance, they constantly need to support more users to reach milestones while finding enough time to collaborate with product development and other departments to leverage new customer insights. And to do so they must find the right balance between efficiency, with automated communications, and personalization, through one-to-one interactions.

No wonder CS is about working smart, not just hard, to make users successful and meet demanding customer growth targets. And a big part of the job consists of making tough trade-offs such as focusing on the right segments. So how should your CS team build or fine-tune their segmentation strategy to boost growth while staying relevant to different categories of users? Here is a short list of user types to help you out in the process as well as reasons why you probably want to monitor them closely.

1. Trial users

If your application offers a trial, whether it’s a free trial or not, conversion is a key metric. Since most trials are self-serve, trial users don’t get proper onboarding the way a paying customer would. That’s why this segment could benefit from automated guidance, notably with an in-app guided tour covering the main steps to get started and where they can get more information. This helps them get a better onboarding experience and keeps the overhead low for your customer success team.

Protip: You don’t need to wait the end of the trial period to invite trial users to convert and become paying customers. If you’re monitoring this segment, you can send a personalized engagement to those with high login activity or feature usage to encourage them to upgrade early. Or, on the contrary, you could invite users who have little login activity or low feature usage to attend a short product demo to show them what they might be missing.

2. Highest-value customers

Some users are more equal than others, and by the 80/20 rule, a minority of your customers will probably generate most of your revenue. Those high-value customers  probably require some extra care as they commit significant resources using your application, and would be unhappy if you treat them like a number with automated, untargeted communications. Also, it is not just about how much money they generate as paying customers, but as well the revenue potential they can help you unleash once they become advocates and recommend you to other high-value users with similar needs. Monitor this segment closely and watch for any issues that could lead to churn so you can be proactive in charting a course for correction.

3. Strategic users in onboarding/adoption stage

Customers in this segment have the potential to become high value accounts, and in their prime as they are move from the end of the buyer journey (purchase) to the beginning of the customer journey (adoption). They have received a lot of attention from sales managers and have complex needs which require dedicated kickoff calls and end-user training. That’s why your CS teams must plan for a smooth transition and make sure time-to-value is minimal. Monitor feature adoption, login activity, and adoption data closely for this segment to ensure they are getting the most out of our product from day one.

4. Inactive users and accounts

Sooner rather than later, inactive users are very likely to cancel their subscription. And as part of your segmentation and prioritization efforts, the question your CS team should be able to answer here is “Which of those users, if any, should be re-engaged and why?” In some cases, customers may not be a good fit for a number of reasons, but don’t let those customers go without understanding why they aren’t a good fit so your sales and marketing teams can adjust. Monitor this segment to make sure no user is left untouched, especially as inactive users are not realizing the value they expect from your product. Be sure to find ways to re-engage inactive users (via email or call) to find out what barriers they are experiencing and how you can help them overcome so they can eventually become advocates who help you maximize your net negative churn.

5. Users across NPS ratings

Another segment you may want to monitor are your promoters, passives, and detractors based on Net Promoter Score surveys. You can monitor promoters to identify the shared characteristics of those users who are prone to be successful with your application and therefore become advocates. This allows you to better visualize the pathways to success and take steps to repeat those pathways for all customers. Additionally, monitoring detractors can help you understand the types of pathways that don’t work and what, if any, specific triggers can lead a customer to give a poor NPS rating so you can follow-up to find out how best to improve their experience.  And don’t forget about your passives. These are often “low-hanging fruit” that may just need a little nudge in the right direction to become advocates; they also typically have valid issues that are important for organization to address to avoid those issues in the future.

6. Users who have not used your most valuable features

Your most valuable features are what differentiate your application from your competitors, and are probably the compelling reason your customers chose to purchase your products. So if they are missing out on those, they are unlikely to reach milestones and therefore more likely to churn. You can improve their customer experience with targeted engagements such as guided tours,  tooltips or announcements to guide them to success or even reach out with a phone call or email to help get them on the right track Set a segment criteria for these users so you won’t be surprised by a preventable non-renewal.

Segmentation offers two main advantages to your customer success team. It helps them focus on the right customers with superior ROI potential as well as take proactive steps to  address issues that can be avoided. Want to learn more about how to define and keep track of your most valuable and strategic segments? Schedule a demo with UserIQ to discover how easy it is to segment your customer base with our Customer Growth Platform™.

Leave a Reply