Customer segmentation in a land and expand model

Sejin Mong

I'm a Director of Customer Success and I'm exploring the idea of customer segmentation in 2022 given our rapid growth. Right now I'm exploring ~3 segments: low, medium, high touch with customers. We have a "land and expand" model and at a high level: pricing is based on product usage. My leaning is to put both enterprise customers AND customers that have high potential to expand to enterprise level in the same segment since I imagine they'd require the same level of high touch support. My leaning is to vet this based on current size of the opp + current size of any expansion opps (Example/fake numbers: Anything that is $100K+ current opp and/or $100K+ expansion opps are put into enterprise level support). 

My question to the community: What criteria/data do you use to segment your customer base in a land-and-expand model? 

Renat Zubayrov

Hello Sejin,

Great question, especially from the land and expand perspective biggest attention and most intensive experience should be given to the customers with the highest expansion potential, however the churn prevention, especially for larger accounts is definitely something to watch for. So segmentation is not a split along a single line (between small and high potential) but rather a 2-dimentional surface with one axis is a potential growth and another axis is a risk of churn multiplied with current revenues.

What do you think, does it makes sense?

Andreas Knoefel

I always segment customers primarily based on their outcomes, not internal metrics. Outcomes are what customers care about, and that's what I craft the customer journey, the connections between customers, the messaging, the sales process and the product around.

If 

• adoption/consumption/outcomes are ahead of projected milestones
• the potential to model themselves after a Champion customer through benchmarking is seen
• a previously agreed upon expand trigger in the customer journey is achieved 

there is a potential to expand and a specific playbook is triggered. While this playbook may increase the level of human attention temporarily, I am not moving a customer to a higher-touch engagement model (and after the expansion drop them again), as the higher-touch model has other benefits I don't want a customer to get used to and then take away again.