Customer segmentation - process and tools

JessieA Member Posts: 1 Navigator
Hi everyone 

I'm new here so forgive me if something similar to this lives somewhere. I looked but I couldn't find anything, promise! 

I'm looking for tips and advice on the best way to go about customer segmentation. We've got information everywhere:
  • CRM systems
  • CSMs own customer spreadsheets
  • CSMs own brains
I'd like us to get much smarter at bucketing customers and looking at indicators that make one customer a 'capacity for growth' account but not another. What tells us that this customer might grow and spend more money. 

In the first instance, we need to compile all the useful information we've got into one place. I also want this to be a supportive exercise with CSMs, this is not about micromanaging the team and analysing how they manage their own accounts. 

I work for a SaaS company, it's possible that one our tools (a survey tool) will work for this but I'm interested in software recommendations if anyone has used something that's worked really well. I'd love some process top tips too. What sort of questions do we need to ask in order to get all this great information in one place? 

  1. What questions do you ask of your teams in order to segment customers successfully?
  2. Where do you collect and store this information? 
Thanks very much everyone! 


  • Ed Powers
    Ed Powers Member Posts: 186 Expert
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    Perhaps the easiest way to obtain "white space" opportunity data is from your sales team, @jessie. This can happen in one of two ways: initial discovery and annual sales plans. At the start of a relationship, growth potential is typically recorded in a CRM, either as an estimate in dollars or a rating of future potential (e.g., 1=none, 5=significant), and salespeople will agree on a common rubric (e.g., # seats, # groups, # add-ons) to score it. If your salespeople remain engaged in your accounts after the sale (blending "hunting" and "farming"), a common practice is for salespeople to write sales plans at the start of a fiscal year. The purpose is for the salesperson to think through how they will make their number, and often the plans list the "top 10" accounts they are developing. Obtaining copies of those plans, if they exist, is very helpful. 

    If none of this exists in your case, perhaps talking with your Marketing or Product folks would be a good next step. Typically they do market requirements definition and market sizing (TAM, SAM, SOM) and may have already defined key segment attributes. If those factors then exist in your CRM, you can sort your records and compare specific segments by their historical growth rates.

    Absent all of that, it's possible to purchase third-party data (e.g. Tech Target) on your accounts and append your data set. You can enrich that with your CSM observations, too. Then a technique called k-means clustering is a very handy way to define and categorize market segments. Once you have these, you can once again compare historical growth rates. Some CRMs allow you to combine multiple attributes and automatically classify accounts into your chosen segments, which allows you to determine your CSM engagement and growth potential by account. 

    Hope that helps. Happy to chat more. In addition to leading CS, I also have 10 years of marketing leadership experience. 
  • kmulhalljr
    kmulhalljr Member Posts: 40 Navigator
    5 Likes First Comment Name Dropper 2023 Success Network - Supporter
    Hi Jessica - correct me if wrong but it looks like your company operates in the governmental space? This is a bit outside my purview but one thing I would recommend, particularly as it relates to 'capacity for growth' is tracking national central banking data and international economic news. Countries with strong (or in this environment stable) forecasts regarding inflation, spending, etc. I would think make for a candidate customer within this vertical. Also, those areas with a history of inflationary social program spending - without as much concern regarding debt balances would fall into a category such as the one outlined (ie. South American countries such as Argentina & Brazil)