Thought Leadership

3 Critical Focus Areas for Segmentation in Customer Success

November 7, 2023
Author: Corey Hagler

Editor’s Note: Escalent sat down with 20 Customer Success leaders from global tech firms to discuss the most pressing issues facing Customer Success organizations today. This is the third blog post of a multi-part series that explores the tectonic shift in the technology industry’s approach to Customer Success. SaaS companies in particular witnessed explosive growth when the pandemic hit and the world went hybrid/remote, followed by a slower period in the last six months which has created scaling issues around capacity management, resource allocation, and more. This is direct feedback from Customer Success leaders on what’s needed to thrive.

In our last post, we shared 3 Mistakes to Avoid When Using Segmentation in Customer Success—mistakes that often derail Customer Success teams when using segmentation to guide their actions, whether creating service strategy, allocating resources, or deciding how to support different stages in the customer journey. In this installment, we focus on the need to closely monitor the customer journey and outline three areas that Customer Success leaders should focus on to make the most of their segmentation efforts. 

“Why do you do segmentation? Because you create segments to create customer journey, you create customer journey to enhance customer experience.” Director, Customer Success, Leading CRM Software Company

Operationalize Segmentation Through Customer Journey Mapping 

Understanding where your customers are on their journey and taking targeted action based on their unique needs is the name of the game. To do this, you must define the customer journey for each segment, and you must have a strategy to engage clients with appropriate actions at specific points along each of those unique paths.  

Each segment may have different goals and pain points, so providing segment-specific onboarding resources, training, and support that address their specific needs in that lifecycle stage can accelerate time-to-value, improve customer satisfaction, and, in turn, improve retention and renewals. The key is to have a tailored map that defines what the journey of a successful customer in each segment looks like, and a Customer Success team structured and resourced to assist that journey. 

As simple and intuitive as that sounds, it is often hard to realize. Many organizations invest months of effort to develop a service standard but struggle to tailor their approach for specific customer needs. For example, we hear from our clients that their customers often receive repetitive, sometimes contradictory and often redundant, communications from different teams across the business, and how many of these touchpoints did not factor in their current state and use of the product. For this, we would propose a three-part solution with the client’s leadership: 

  1. Conduct a robust segmentation study to understand customers based on attributes related to product engagement and specific use cases 
  2. Identify the diverse needs and associated touchpoints for service delivery tailored to those identified needs 
  3. Develop execution playbooks and process maps to enable customer-facing teams to integrate this approach into their day-to-day interactions 

While enabling customer-facing teams with a clear framework and an actionable set of tools is already driving meaningful impact, what will determine the long-term success of such a program is not to reap the rewards of a one-time exercise, but to refresh your understanding of your customer base every year, or at least every other year.

“Right activity at the right intensity at the right time for the right account.” Senior Leader in Customer Success at a Global SaaS Firm

Leverage Data to Identify Targeted Customer Journey Interventions  

When it comes to SaaS products, especially in cases where you have sufficient telemetry data, Customer Success teams have the unique advantage of knowing exactly how customers are interacting with the product. Taking a data-based approach with defined KPIs aligned to a successful customer journey is a powerful enabling tool for your team. It provides a detailed view into which customers are struggling and need help, and where there is an opportunity to extend the value customers are getting from your product. 

This can be particularly hard for non-cloud native tech firms that do not often have the necessary telemetry features built into the product right away. Clients who do not have sufficient telemetry data will find it difficult to understand how their product is being used (or not) by their customers. They will not be able to discern from limited data if the primary issue is, for example, activation or adoption or a product limitation, and therefore targeted interactions will not have the desired impact. In that scenario, without telemetry data to lean on, going back to basics and engaging customers in meaningful, in-depth conversations to identify/prioritize the right data points and developing tailored KPIs that inform where intervention was needed, will help move the ball forward. 

Regardless of whether the “data” come from an automated system log or from your customer’s own anecdotes over the phone, plugging those information gaps and adopting a purposeful mindset is often the key to avoid wasting resources and missing opportunities to maximize value for your customers.

“Our goal was to purposefully engage. Meaning when we engage with a client, we had a reason … whether that reason was tracking leading indicators of risk or leading indicators of opportunity.” Paul Palmer, Senior Director of Customer Success, Vertex Inc.

Revisit and Renew Customer Success Segmentations 

We’ve partnered with customer success managers for some time, and there are two issues that come up often in segmentation conversations: 1) A segmentation almost never keeps up with the changing needs and realities of your customer base, and 2) It is a complex and resource-intensive exercise. As a result, it is not only important to get the segmentation right, but it is even more important to revisit it periodically and validate any assumptions to ensure you’re not stuck in time. Additionally, finding a partner who can help you navigate the required work can provide expertise and resources you may feel are needed. 

Due to the changing nature of business and an ever-evolving customer, this is an ongoing process. It will take time, resources, and expertise to effectively create and refresh meaningful customer segments that are actionable. An average team may not have the resources or expertise to do this well or over time, which can result in segmentations (and therefore a service model) that are inaccurate or outdated. Finding a trusted partner that offers segmentation solutions can provide expertise you lack and dedicated resources so your team can focus on their main mission: Driving outcomes for your customers and long-term value for your business.  

It’s clear that having access to customer data is not enough. To keep customers moving in the right direction, defined needs combined with an understanding of where your customer is on their journey is crucial to ensuring their success. This takes constant monitoring to know what your customers need now and what they’re going to need in the future as they maximize the value of your product. Working proactively with customer data and understanding their progress along a defined journey allows Customer Success teams to give the most relevant assistance and provide high value, collaborative experiences. 

We invite you to read the previous installments of this series, “Five Hallmarks of a Strong, Purpose-Built Customer Success Organization,” “Customer Success Leaders Share How to Earn a Seat at the Table” and 3 Mistakes to Avoid When Using Segmentation in Customer Success. 

You can also check out our POV on segmentation. Here are two blog posts:

And here are two examples of what segmentation success looks like:


Want to learn more? Let’s connect.

To learn more about our customer success insights and strategies for unlocking the full value of your data, please contact us.

Corey Hagler
Corey Hagler
Insights Consultant

Corey Hagler is an Insights Consultant in Escalent’s Technology practice. He began his career in financial services, then jumped into market research where he found purpose employing his curiosity and passion for solving problems. Throughout his career in market research, Corey has led efforts to deliver solutions to complex problems for clients across multiple industries. He uses an analytical- and data-driven approach and is passionate about turning ambiguity into clarity for the organizations and clients he serves. Corey lives in San Diego and enjoys spending time in the sun with his wife, daughter, and dog Wicket (yes, he’s named after the Ewok in Star Wars).