Customer Segmentation Strategies for Key Account Management and Customer Success

How are you segmenting your customers? If you ask any key account manager, you’ll find that they either follow a traditional approach, an approach all their own, or worst of all, they don’t segment them at all.


Segmenting your customers is crucial to your organization’s success because it shows you which accounts require the most attention, which ones are providing most of your bottom line-driven results, and which ones are doing fine for now.


In a traditional segmentation system, you’ll typically break your customers down by sizes such as large, medium, and small based on the revenue that each customer’s organization produces annually. This system has worked in sales teams across the world for decades but with a modern account management philosophy like key account management, is there a better way?


Today, we’ll take a look at a few different segmentation options that key account management teams can work with more suited for the modern account management strategy. Keep in mind that there isn’t one right and one wrong customer segmentation strategy and the one that applies best to your lineup of customers is the one that works best; just don’t default to the traditional approach if there is a better way.


Segmenting Based on Potential

As a core component of Customer Success, your accounts should grow and improve with your organization through the services and products that you provide. Lately, many account management teams have started segmenting the customer based on potential for this very reason.


By dividing up your customers to the ones that show a high potential to succeed with your service, ones that have a low potential to succeed, and then customers in the middle, you can get a better picture of who you’re working with and which ones are worth your best efforts.


There are two schools of thought on this segmentation. You might see low-potential clients as the ones that need the most attention while others might see the high-potential clients as the ones to focus on. It really depends on your business goals and how much time you want to spend developing your customers.


When it comes to customer success, the right way to operate would be to focus on the low potential clients first. Sure, you want the quick and easy wins, but sometimes the ones that don’t show much right now could be the most successful of all of your clients with the right guidance and solutions.


Also, consider which of your clients will show the most potential to actually use your products. With better insight into the customers that want to use your products and services you can start adjusting your marketing strategies to attract more qualified leads while even improving the product for the future to gear it towards a specific type of client.


Segmenting Based on Alignment

In key account management, you want to ensure that the goals of your customers are aligned with your goals and vice-versa. For this reason, many companies are finding success segmenting their customers based on the alignment of their goals with the goals of the product or service. By doing this, you can quickly identify which customers will get real value out of your product or service. If your goals aren’t the same, you’ll have a more challenging time offering them premium products and the experience on their end won’t be quite as smooth as it would be with a perfect fit.


This isn’t to say that customers with differing goals are useless, but rather they require special attention. To better understand the goals of your customers and how they relate to your product or service, conduct a Voice of Customer interview and use the VOC Insights tool in Kapta to get a pulse on where the account stands and what their end goals are.


Segmenting Based on Usage

How often are your customers using your product? Ideally, you’d hope that they can’t make it through the day without thinking about your company, but this isn’t always the case. You want to check with your development team to learn more about tracking usage but segmenting your customers based on usage can help you get a clearer picture of what needs to be improved upon and which customers are in danger on churning.


The customers that use your product frequently will be your organization’s bread and butter while the ones that don’t need special attention. There are a variety of reasons that they might not use your products often, and it’s up to the account management team to learn why. With the answers in hand, you can start adjusting how you work with these clients and propose new solutions that will inspire them to use your product more often. Just remember to keep their end goals in mind and tell them how you can help deliver results for them.


Segmenting Based on Commitment

 Finally, consider segmenting your customers based on how committed they are to your organization. If your account management team has done their job well, the relationship with certain customers should be strong and capable of lasting over the long-term. These are the customers that require a unique level of care. You can’t just turn off the engines once a plane is in the air and the same is true for relationships. Keep feeding the fire and show them that you care about their support.


Your most committed customers might be on your customer advisory board (CAB) or they might be a referral or even provided you with a case study. Whatever the case may be, if you segment the committed from the newer accounts, you can tell which accounts deserve an extra level of care.


The Bottom Line

In summary, you shouldn’t settle for the traditional segmentation strategy if you don’t have to (you don’t). Defaulting to gold, silver, and bronze-based on revenue alone won’t give you a clearer picture of the clients that you’re working with and your account managers won’t have enough information to go off of when working with them.


Think about what you’re trying to achieve with this customer segmentation strategy and choose the one that naturally fits your organization’s goals.


CEO at Kapta
Alex Raymond is the CEO of Kapta.