Segmentation

As you begin to add more customers to your book, it becomes clear that having the same level of service for every customer is not a scalable solution. While we definitely want to treat all of our clients as equally valuable, the reality is that this isn’t a sustainable approach, and segmentation is a necessity. In this post, we’ll talk about some example tiers, what criteria to set for each, and how to make your customers feel delighted at every level. 

‍Enterprise - The Heavy Hitters

We define enterprise level customers as those that have a large spend with your company. The spend limit will be unique to your specific business, but a quick gut check is to ask yourself if losing this customer would have an impact on your day-to-day. It is critical to understand the business of these customers, to be aware of any foreseeable issues, and to ensure that they renew. Thus, the lifecycle for the enterprise tier will likely include a high-touch approach, Business Reviews, in-person visits, and, in general, a more hands-on CSM. This segment is a good candidate for a higher-level support agreement as well. For these reasons, the ratio of accounts to Enterprise CSM should be relatively low. 

‍Strategic - The Farm League

Our ideal strategic tier includes not only customers that have a big spend, but also customers that have big spend potential. This tier will still be pretty high touch, but the account ratio will be higher than that of the Enterprise tier. CSM’s at this level will likely be performing lots of status calls, probing for opportunities to expand within the customer’s organization, positioning new products, and connecting referring clients. 

‍1 : Many - The Tactical Playground

As the name of this tier implies, the account to CSM ratio will be considerably higher than that of the Strategic or Enterprise segments. For that reason, there will be limited 1:1 interactions with the customer around training or increasing usage. Additionally the CSM will likely opt for the electronic version of a business review, and many messages will be automated. Some organizations may opt to offer a basic level of support to this segment, with the option for a paid premium support subscription. 

While it may seem enticing to let this tier sit on the back burner while you throw resources at the more lucrative tiers, there are a lot of benefits to focusing on the processes around this segment. Depending on your particular business, this tier may actually make up a large amount of your revenue, and thus will strongly impact your retention numbers. If that’s the case, it’s also likely that this tier will continue to grow with your business and become more difficult to manage. You’ll may want to just throw more headcount at the problem, but if you devote the time to develop more creative, mass solutions, these customers can become the testing ground for new ideas that could potential impact your other segments. Beyond that, this is a great place to groom more junior CSM’s to handle your largest customers, without having to look to hire outside resources.

‍Self-Service - The Independents

This segment should be made up of your smallest customers that will have the lowest impact on your business. It is called self-service for a reason, there will be no dedicated CSM for these clients. That means you need to have processes in place that allow the customer to seek onboarding, training, and renewal with no internal effort. Again, this is also a great tier of customers to offer a paid premium support option, and even an option to pay to move up to the 1:many tier. 

Segmentation is a great (and necessary) way to not only set the right expectations with your customers, but to also make the most efficient use of your people and resources.