Segment your Customers
Your customer base contains a diverse population of customers each with distinct needs and expectations.
Similarities between customers’ needs, expectations and general business characteristics can be described by using common classifications and attributes. Develop a system to organize customers by these common characteristics.
Define a service segmentation model to organize customers by shared characteristics.
- Shared characteristics may include service needs, usage, product adoption or life cycle stage and business characteristics.
- You should identify a minimum of 4 distinct service-centric segments to defined to describe unique attributes such as customer needs, expectations, or business characteristics.
Conduct customer studies to understand the defining characteristics of your customers.
- Determine what customers need and expect from services.
- Define how customers may use the services.
- Establish how customers prefer to buy services – all-inclusive portfolios, base offers with add-ons or catalogs of available services to select from.
Align customers with common needs or expected business outcomes.
- Assign all existing customers to one or more service-segment.
- Note that customers may belong to one or more customer segment.
Develop service offerings and value propositions aligned with the needs of identified customer segments.
- Target sales and marketing strategies and messaging to the unique needs of segments.
Evaluate service-segments each year to align current and prospective customers and to assure segments are up to date and relevant.
- Customer needs change so make certain that your portfolio keeps pace with changing expectations.
Login for Access
If you don’t have an account, create a free* membership.
Not all customers are created equal nor do they represent the same value to your business. Nearly two-thirds of support and maintenance revenue comes from less than one-third of the customer base. It seems illogical to view all customers the same way, yet only slightly more than a third of companies (36%) have a formal customer segmentation strategy for managing support and maintenance sales and renewal activities. Companies that indicate that they have a formal service segmentation strategy have an average attach rate nearly 60% better than companies that do not. This playbook describes the steps necessary to define and implement a formal service segmentation strategy.
*Membership level determines your access to ServiceXRG research and other member services. Paid memberships include access to research and playbooks. Free memberships include access to some reports and discounts to others. Please visit our membership page for a list of available membership programs.
Technology service programs are evolving to offer new value and benefits such as use and adoption assistance and resources to help attain successful outcomes. As technology service programs change service marketing must evolve beyond selling the initial service engagement and focus on sustaining and growing relationship value.
Service and success programs are a significant source of revenue. To assure that they yield their maximum revenue potential, treat service portfolios as strategic offerings in the corporate portfolio by assigning dedicated program management resources.
Setting the correct price for your support programs begins with a baseline understanding of what your market will bear but ultimately the price must be based on the type and level and entitlements offered. The average prices for support programs range from 15.6 percent for a basic level of support to more than 26 percent for a high-end premium offer.
Support and maintenance portfolios have been the foundation of many post-sales service offers, yet Support offers alone are no longer adequate to sustain and growth customer relationship value. Modernization of support portfolios and the evolution to customer success-focused programs and offers is the future of post-sales service portfolios. This article will help you to determine what type of post sales service portfolio you need.
It is no longer enough to attach a support program to a product sale. Effective Success Sales teams must be able to establish long term service relationships that last and grow well beyond the initial sale.
In a subscription economy your support value proposition is likely out of date. If your value proposition is based on promising access to update and service level response its time to for support value proposition refresh.