Strategies for Account Segmentation Scaling Customer Success
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Effective strategy in a SaaS business often means offering different service levels to different customer segments. However, it is often not obvious where to draw the lines. What are the right criteria to use for segmentation? What are the types of services to offer? How to organize to delivery these services economically? Ed Powers and Joshua Robitaille will share their lessons learned developing the segmentation strategy used at SurveyGizmo today.
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Strategies for Account Segmentation Scaling Customer Success
- 1. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Scaling Customer Success: Strategies for Account Segmentation #PracticalCustomerSuccess
- 2. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Tweet us and join the conversation #PracticalCustomerSuccess @GetAmity We’ll send slides and the recording Q&A at the end - ask them in the questions box! (If we run out of time, tweet or email us!)
- 3. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Presenters Josh Robitaille SurveyGizmo Marketing Manager Ed Powers Service Excellence Partners Principal
- 4. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Agenda • Stratification strategies • Scaling for success • The SurveyGizmo story • Q&A
- 5. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Poll #1 What stage are you?
- 6. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Poll #2 What’s motivating the change?
- 7. Scaling Customer Success: Strategies for Account Segmentation @GetAmity In the early stages… Any deal is a good deal!
- 8. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Revenue Account Soon… The critical few… ...and the trivial many
- 9. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Revenue Account A common way…
- 10. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Target Customers
- 11. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Value Propositions Target customers Costs/tradeoffs Source: Building Market Focused Organizations, Lanning and Philips Benefits
- 12. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Example: Mobile Quoting App • FOR: service managers at large, national chain auto body shops • WITH NEEDS FOR: more accurate collision claims processing • WE OFFER: a mobile app linked to a SaaS application • THAT MEETS THE NEEDS BY: allowing techs to quickly photograph, annotate, submit quotes and order parts from their mobile devices • FOR THE PRICE OF: $200/user/mo. • WITH THE BENEFITS OF: quotes finished in half the time with 99% accuracy and 82% less rework • AND SUPERIOR TO OTHER ALTERNATIVES BECAUSE: we combine big data and image recognition to automatically identify needed parts
- 13. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Value Propositions Deliver CommunicateChoose Source: Building Market Focused Organizations, Lanning and Philips
- 14. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Which Target(s)?
- 15. Scaling Customer Success: Strategies for Account Segmentation @GetAmity CS Role in Segmentation Develop Market Model Discover Segments Assess Competitiveness Target and Prioritize Segments Imagineer Solutions Test Validate & Monitor Assumptions Refine Value Propositions Product Managers Customer Success Key:
- 16. Scaling Customer Success: Strategies for Account Segmentation @GetAmity And Now a Word on Operations… Strategy Do the right things Tactics Do things right
- 17. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Segment Identification
- 18. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Revenue Account Static Ratio Approach 5:1 250:1 8
- 19. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Dynamic Ratio Approach UsageandTrust <x:1 y:1
- 20. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Scaling the Customer Experience Recognize Need Investigate Decide Purchase Implement Learn Use Renew/ Terminate E-Mail Nurturing Campaigns Webinars Online Communities Video Messaging Guided Learning In-Product Messaging Gamification Performance Analytics “Easter Eggs” PRAOK Personal Contact
- 21. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Josh Robitaille Marketing Manager Former Sales Manager/Former Services Manager/ Former Salesman/Former Billing Coordinator
- 22. Scaling Customer Success: Strategies for Account Segmentation @GetAmity 2011 --------- 2012 --------- 2013 --------- 2014 --------- 2015 Sales Sales Pro Service Developer Pro Service Developer Sales Manager Marketing Analyst Senior Web Designer Coordinator Content Writer Pro Service Manager Marketing Manager Junior Web Designer Business Development Sales Sales
- 23. Scaling Customer Success: Strategies for Account Segmentation @GetAmity 2011 --------- 2012 --------- 2013 --------- 2014 --------- 2015 Sales Sales Pro Service Developer Pro Service Developer Sales Manager Pro Service Manager Sales Sales
- 24. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Sales 2011 --------- 2012 --------- 2013 --------- 2014 --------- 2015 Enterprise Sales Project Manager Pro Service Sales Sales Manager & Services Manager Onboarder Onboarder Onboarder Onboarding Team Lead Onboarder Onboarder Onboarder Pro Service Developer Pro Service Developer Pro Service Developer Pro Service Developer Account Coordinator Contract Coordinator
- 25. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Enterprise Team lead Onboarder Onboarder Onboarder Pro Service Sales Pro Service Developer Pro Service Developer Sales Manager & Services Manager Onboarding Team Lead Pro Service Developer Pro Service Developer Project ManagerAccount Coordinator Contract Coordinator Onboarder Onboarder Onboarder Marketing Specialist Web Designer Market Researcher Content Writer 2011 --------- 2012 --------- 2013 --------- 2014 --------- 2015
- 26. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Enterprise Team lead Onboarder Onboarder Onboarder Pro Service Dev Pro Service Dev Sales Manager & Services Manager Onboarding Team Lead Pro Service Dev Account Manager Account Manager Onboarder Onboarder Onboarder Marketing Specialist Web Designer Market Researcher Content Writer 2011 --------- 2012 --------- 2013 --------- 2014 --------- 2015
- 27. Scaling Customer Success: Strategies for Account Segmentation @GetAmity 2011 --------- 2012 --------- 2013 --------- 2014 --------- 2015 Enterprise Team lead Sales Manager & Services Manager Account Manager Account Manager Marketing Specialist Content Writer Marketing AssociateAccount Manager Account Manager Marketing Analyst Marketing Associate Marketing Associate Web Developer Web Developer Web Developer Web Designer
- 28. Scaling Customer Success: Strategies for Account Segmentation @GetAmity
- 29. Scaling Customer Success: Strategies for Account Segmentation @GetAmity THANK YOU! Josh Robitaille www.surveygizmo.com joshua@sgizmo.com Ed Powers www.se-partners.com ed@se-partners.com
- 30. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Meet Our Host Paul Philp Founder & CEO @PPhilp @GetAmity GetAmity.com
- 31. Scaling Customer Success: Strategies for Account Segmentation @GetAmity High Precision Relationships for Customer Success.
- 32. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Dynamic Customer Success High Precision Relationships Quantified Relationships Algorithmic Relationship Managment Smart Playbooks Insight Reports
- 33. Scaling Customer Success: Strategies for Account Segmentation @GetAmity How Amity Works Power + Flexibity Unique Solution for Your Unique Business.
- 34. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Questions? #PracticalCustomerSuccess
- 35. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Many Thanks To Our Presenters Josh Robitaille www.surveygizmo.com joshua@sgizmo.com Ed Powers www.se-partners.com ed@se-partners.com
- 36. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Join us on December 1 for the next webinar in the Practical Customer Success Series Visit getamity.com/resources to register!
- 37. Scaling Customer Success: Strategies for Account Segmentation @GetAmity Let’s continue the conversation Thank you for being here! @GetAmity GetAmity.com
Notas do Editor
- I do a lot of work with early stage companies, and I see a lot of recurring patterns In the beginning, it’s all about traction: sales leads to valuation, valuation leads to investment, investment covers the bills until the company can cash flow So it’s appropriate to close any and all possible sales, but ultimately it’s not sustainable.
- After a while companies begin to learn that all customers aren’t created equal, the Pareto Principle applies, especially when it comes to B2B The critical few delivering the majority of the revenue and the trivial many, the “long tail” There are typically some companies in-between as well
- Most companies I deal with stratify their account based primarily on economics—it’s easy and straightforward They assign their most expensive sales and account management resources to their high-value accounts and their less expensive inside sales/account managers and CSMs to the medium-value accounts and they let their “long-tail” customers fend for themselves The problem with stratifying based on historical revenue is that it’s “management by looking in the rear-view mirror”—companies routinely miss significant opportunities—just because people haven’t bought much before doesn’t mean they couldn’t buy more, especially in the “long tail” Companies often lack insights into how their customers are clustering—how the needs of customer groups are alike or different
- There’s a much more evolved and effective way to segment the account base and it starts with the concept of a target customer—here’s an analogy Just like an archery target, some customers have very high value—the bullseye—and the further away, the lower the value Some arrows are well off target as well, there’s no value and you basically wasted your energy Your goal is obviously to land as many arrows as you can on or near the center of the target It’s the same thing with customers; some are a much better fit and much more profitable than others and you need to know exactly what you’re aiming for
- Value Propositions are a very handy tool for companies to segment, focus, and differentiate Originally coined by Lanning and Phillips in the mid-80’s, are defined as target customers (who they are and more importantly who they aren’t); specific, measurable end-result benefits that are compelling and relevant; and the costs and tradeoffs we ask customers to make Value Propositions are internal statements provide clarity and intense focus on what differentiates one offering from another—it’s the source of competitive advantage
- Here’s an example, a mobile application for auto body shops… Interesting—makes you want to buy! Notice we have a crisp, clear definition of exactly who we’re targeting (MAACO, not Joe’s Auto Body), what we’re offering, measurable, compelling benefits and specifically why we’re better—breakthrough image recognition software
- Value Propositions are a very powerful, strategic concept Once you choose them, you align the entire organization around them; you design, develop, deliver and support products and services that fulfill the promise and you communicate that promise through your marketing and sales efforts. Value Propositions are the organizing construct, and when everyone (including Sales and Customer Success) has a clear understanding and works together to choose, deliver and communicate, you can’t be beaten! Focus is critical—numerous studies show companies that focus relentlessly and have deep understanding of customer segments do much better in the long run than companies that “spray and pray”
- The trick, of course, is to pick the right target segments for the right reasons Although the world offers unlimited opportunities, you just can’t be all things to all people—you have limited time, money and resources and you have to invest them wisely for maximum returns This is the hard work of strategy—you have to say “no” to some things so you can say “yes” to others It’s very common for early stage companies to “pivot” multiple times to pursue more attractive opportunities—the target will naturally change It’s a critical, ongoing process for mature companies, too, as they identify and pursue new markets CSMs have a unique vantage point from which to observe changes in the account base—closer to customer than marketing and product people, not problem-ticket focused like support, and don’t have a short-term agenda like salespeople
- What this means is you can have a seat at the senior executive table for defining business and product strategy—what might that look like? Tasks in blue are typically owned by product managers while those in green could be done in partnership with Customer Success teams You can get things started by paying attention to quantifiable patterns you’re seeing in your account base and then sharing those findings with the right people Of course your marketing folks and product managers need to do their homework; they need to study market needs in greater detail, innovate solutions, and define new Value Propositions It’s an iterative process and when you partner with product managers you can play a critical role in testing hypotheses and monitoring shifts
- We’ve talked a lot about segmentation and strategy, which is about doing the right things—strategy is fundamentally about choice Let’s get tactical now and talk about how we can do things right, once we’ve picked the right segments—doing things right means doing them effectively and efficiently
- Here’s an example of a company in south Denver that does a very effective job of aligning with its customer segments Zen Planner makes software for small exercise and fitness studios and they prompt their prospects identify themselves by segment early in the sales process They don’t treat customers the same way, for example, they show videos of dance studio applications to dance studios and share mixed martial arts success stories to mixed martial arts studios—they speak to them in a language and using terms they immediately relate to—they tailor their Value Propositions really resonate It doesn’t stop there—many people in Sales, Customer Success and Customer Support at Zen Planner have backgrounds as fitness trainers or yoga instructors, so the organization deeply understands and relates to these specific segments This is a very effective approach for them--they have incredibly good customer intimacy and very high customer loyalty and retention The same concept applies in other businesses—if you understand your customer segments, you can prompt them to self-identify, and depending on how they respond, you can present an entirely different customer journey So looking at segments and value propositions, rather than just historical sales volume, may cause you to do something that would otherwise be completely counter-intuitive, like assigning a full-time resource to develop a long-tail opportunity that’s strategically important for future growth
- Market segmentation and value propositions increase effectiveness, so let’s now talk about the other dimension: increasing efficiency Going back to the approach most commonly used, many companies use customer:CSM ratios to control costs and coverage for high-touch, low-touch, and no-touch segments Large, enterprise segments are typically low ratios (like 5:1) whereas midsize or SMBs get very high ratios (e.g. 250:1) To set these ratios, companies tend to use industry benchmarks or just copy what others are doing But it’s a static approach—since the ratios are fixed, customers often get the same treatment in each category regardless of the nature of their segment or place in the customer lifecycle We’ve already talked about the risk of doing this and the missed opportunities, but I’d like to share a critical piece of advice on how to optimize your customer experience for your target segments
- Give this some thought--instead of thinking about customer:CSM ratios as a static problem, think about it dynamically, as a function of time, and use a blended ratio Much of the work I do with clients concentrates on how to manage the critical early stages of the relationship—customers are most vulnerable and you have the most impact on retention and loyalty at this point You hear a lot about early product usage and quick time-to-value, but it turns out customers are also learning whether or not they can trust you at this time—trust in your technology, your brand, and your people It turns out trust is a VERY BIG factor in customer retention and loyalty—and what starts right, stays right—you have to nail this in the beginning! In terms of scale, CSMs can manage smaller cohorts of customers very attentively during these crucial initial phases, then “graduate” them to a larger pool after they reach a certain level of usage and trust—customers don’t need as much care and feeding at these later times Your ratios (X and Y) will vary depending on your business—it’s dangerous just to blindly copy what someone else is doing Larger ratios can be achieved with the same CSM once customers reach a level of proficiency and trust is established; this is how you can keep high productivity while at the same time improving your effectiveness building trust
- We talked about the level of personal contact at the early critical stages, but there certainly a number of automated approaches that can help operations scale efficiently There’s a lot to talk about—we could spend a whole day on these tactics, and a lot of my work is helping clients sort out which ones make sense for them Here’s a very quick overview: Gamification is a clever way of engaging customers in the learning process using things like badges and leader boards E-mail nurturing not only works to convert prospects, but it also helps automatically guide learning and application after the sale Video messaging is extremely powerful to maintain personal relationships at scale by simply showing your face and being yourself on camera Webinars, of course, are a great way to sell and support at scale In-product messaging and guided learning can be used to remind people of ongoing value and make learning more contextual and on-demand Many companies use “Easter Eggs” to surprise and delight customers when they discover hidden features and benefits PROAK stands for “Programmatic Random Acts of Kindness,” another way to surprise and delight customers and build loyalty Online communities have been used very effectively to scale customer support, but there’s also a big opportunity to use them in learning cohorts And finally, showing results back to customers on how well they’re achieving their goals (like QBRs) can certainly be automated One again, how you deploy and how you scale, including the supporting technologies, should be guided by your segmentation and market strategy—it’s not a “one size fits all” approach—some things will work better for some segments than others This is a good segue for Josh who will tell you the story about the practical realities and approaches to making things more efficient and effective; they changed their approach to adopt a lighter-touch model His talk is fascinating because he’ll talk about evolutionary vs. revolutionary change and the how it is an iterative, learning model
- Thanks Ed! Evolutionary Vs Revolutionary. These terms describe perfectly the level of pain that can be dealt to your customers and your organization as you shift to generate success. Evolving is a slow, iterative process that gradually produces better results. Revolution is a dramatic change that may have mixed results. When driving customer success you will discover that your staff may not be align appropriately to get the best results. I have personally overseen 5 major reorgs in 5 years. Here’s how that has played out.
- Sales, Pro Service, Marketing
- The marketing team was almost completely let go for various reasons. This was one of the moment painful experiences and had a huge impact on the rest of the staff. From there on in, I endeavored to not let people go if they were will to shift with the companies needs.
- Similarly with the marketing team, the Professional Service team needed to change to meet customer expectations. I absorbed them and changed their practices to accommodate customer success needs. At the same time, a new segment was discovered for higher level Enterprise Customers. A new team was formed.
- Running without a marketing team is impossible. So with better understanding of our segments, I lobbied to oversee a new, smaller team.
- In 2014, Professional Services was becoming a high cost low return initiative. I combined the Pro Service and Enterprise team. The enterprise team was able to help have tough conversations with customers and close out remaining work.
- With pro services closed out, I had the resources to expand the marketing team and move onboarding (Sales) responsibilities over to support. Through all these changes, there was one constant…
- I’ve utilized the same team members for the last 5 years.