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.
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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.
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