Building Segmentation w/ CS Leadership Office Hours

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This is a podcast episode titled, Building Segmentation w/ CS Leadership Office Hours. The summary for this episode is: <p>This week we are focusing on building segmentation.</p><p><br></p><p>A weekly segment:</p><p><br></p><p>CS Leadership Office Hours</p><p>Every Thursday. 11:30am ET.</p><p></p><p>--</p><p>If you want to join the discussion with thousands of other customer success leaders, join Gain Grow Retain:</p><p><br></p><p>This podcast is brought to you by Jay Nathan and Jeff Breunsbach...</p><p><a href="" rel="noopener noreferrer" target="_blank">Jay Nathan</a></p><p><a href="" rel="noopener noreferrer" target="_blank">Jeff Breunsbach</a></p>
What Drives Segmentation
01:27 MIN
Keep in Mind the Value the Client is Seeking
01:22 MIN
Articulating the Vision of the Company
00:54 MIN
Organizing the Smaller and Larger Segmentations
01:03 MIN

Speaker 1: Welcome to the Gain, Grow, Retain podcast.

Speaker 2: Organizational need as well. I'm interested to hear what everyone else here has to say, if it does conform to such a need, but as you acknowledge Mike, and I'm sure as a lot of others are going to bring up soon, revenue does have a driving factor in that as well.

Mike Lee: I think it has to. That's absolutely correct. It has to, we need to know where our initial focus is. But you can add other factors in there to create different segments. To be honest, I can't remember who I said next. So I'm going to go with Jan and then Pam, Emily, Rupal and Chandler. So, Jan.

Jan: Okay. So first of all, I just have to say, we were completely sidelined with the conversation about post- COVID travel and everywhere on our bucket list that we want to go. So that took up more than half the time. And it was really Josh who brought us back to the subject matter at hand, because he's currently going through segmentation and he wanted to talk about the topic. So we were talking about overall revenue and the potential revenue, the propensity that they would use your product, how much they like to do in- house versus how much they're going to outsource. And then really though outcomes; what outcomes they're looking for. Geography also came up and that sort of thing, but we were talking quite a bit about what are the customer's goals, because there also can be similarities if it's a small company or a large company in terms of its goals and while that may not work into segmentation, you want to note it because it may also impact what sort of webinars you do. And they both the large and the small companies may end up at those webinars or something like that. So, there's a lot of ways to think about that, and then alignment with sales and geography can also weigh into it. So, especially for post- COVID in- person visits again.

Mike Lee: Right. Oh, absolutely. Geography, especially when you're in alignment with solutions engineers, sales, everything like that. You can definitely see there. Pam.

Pam: So we started, a lot of the people in our group, and may I say, shout out I thought it was an amazing group. A lot of the people in our group are in new companies. So we said, what drives segmentation? Why even bother? So when you first start everybody's a segment. But really why are you driving segmentation? So that's a big question. So if it's pay for performance, that's one way you do it. Janay was in travel. So she said," Look, we have to be experts at our location." So, different people needed to understand those locations. So that's how they did it. When you're segmenting for high touch, it might or might not be revenue. Why do people want high touch? So really it's not so much how, but what problem are you solving for when you do segmentation? And another thing, and I can't remember who it was that said it, this is so embarrassing because it was so good. Chandler. Chandler Packard said," This is where customer success is so important because once you segment and you realize who you're segmenting for and what the best customers are, then you can bring that information to sales and make sure you get the best customers that are going to ultimately be." But remembering customer success is all about making sure that the customer is successful so that we have very little churn, and the company is important. So it's analysis. Really, it's about analysis.

Mike Lee: Yeah. You make a really good point, Pam. It is, you mentioned there has to be a purpose for the segmentation. And David Elan. I think that's how you say it Elan or Allen, in the chat. He said," Segmentation for the sake of segmentation doesn't work, there must be a purpose." That's absolutely right. There's no reason to split people up unless there's a reason to split people up. Breakout rooms. We need to have smaller groups speaking. If we didn't need that, there was no purpose for that, then we wouldn't need breakout rooms. So it kind of works the same way. So absolutely, you make a really good point there. Emily and Rupal and then Chandler.

Emily: Yeah. I've heard little snippets of this, but I really want to amplify something that Jeremy Mulder said in our breakout room, that I think we'll all agree with is that segmentation, this is a construct that we in customer success, have created for ourselves. And it serves us as an organization that helps us be more efficient, more productive. And Jeremy brought up this circular thinking of like," Okay, what's best for us? Well, what's best for the customer?" What would a customer self- select into if they knew what our segments were? And I don't know, Jeremy, I'm probably not doing you justice here. Do you want to step in and tell us a little bit more about what you were thinking.

Mike Lee: Yeah, Jeremy. Welcome to the stage.

Jeremy: Great, thanks, Emily. We had a really good discussion with multiple viewpoints. And I think what I was trying to bring is the metaphor of anytime you go to a wedding, you're assigned to a table, and if somebody comes back to you and says," I'm sorry, I put you at the wrong table." And they put you at a different table. It almost never feels good. And if you're in the wedding party, and then you're not, if you're uninvited to the wedding, we'd have an emotional response to this. We already know what this feels like. And it's something that I struggle with greatly in customer success is saying," I'm segmenting because it's good for you, customer." It feels like the least customer- centric thing that I do. And so I'm always trying to figure out yes, with the resources available, how can I serve the customer the best? But I'm always finding that I feel like I'm spinning it in a way that it's good for me and therefore it's good for you. And so I struggle with that. So I'm just excited to hear what other people have to say and how you navigate that?

Mike Lee: That's a good point, Jeremy. And that may be something that you can discover in your onboarding. What type of care are they looking for? What type of care is your customer looking for? And that may help the land, in a specific segment. So I really like that idea of self- selecting, customer self- selecting. Emily, did you want to finish up, did you have anything to finish up there?

Emily: You know, all I think I'd want to say is, it's something that we should all keep top of mind, is that what level of care do our customers expect? And as much as segmentation model works for us, does it work for our customers as well? And I do feel like generally in customer success, we always have the customer top of mind, but maybe I challenge everyone to imagine that customer sitting next to you and hearing about your digital engagement program or your high- touch program. And is that really what they need? Are we treating them the way they want to be treated or are we treating them the way we think they should be treated?

Mike Lee: Very good. Thank you for that, great point. Rupal.

Rupal: I was trying to find the unmute button. So we talked about a number of things, but overall I think the key themes were the partnership with sales and collaboration with them to essentially put together the framework for the organization, from a segmentation perspective. We also talked about what are some of those triggers for segmentation and re- segmentation? But I think what we left with as a headline is the fact that it's not always a done deal. You have to continue to evolve that segmentation as the organization grows, as the maturity of the products grow, and as your customers also mature and change. And from a segmentation perspective, we have multiple things, obviously, ARR geography, what customer goals are, to what Jen was saying. Also the maturity of the customer, and then lately it's, to what you were saying, Mike earlier is segmentation within the segmentation. There are these themes of adjusting the most critical customers or escalated customers within each of these buckets and how did they get handled? So I think there are different flavors as variables of segmentation that we've seen.

Mike Lee: Absolutely. It seems like everyone has a different structure and different way to do things, and that's why I think this is an important conversation to have with other leaders. How do you do it? What are the best practices? What are the best practices there? Chandler.

Chandler: Thank you. Thanks, Mike. You guys have said a whole lot of great stuff here that I had been going thinking through in my mind. So for me, a couple of things that I think are really important to think about is just how do we use product usage data to really drive segmentation? And are we not analyzing our product usage data from a customer segmentation standpoint, how are we allowing that to drive an ideal customer profile? That ultimately leads back to that conversation with sales and where we're targeting on future clients. And I think it's really also important just to keep in mind, is customer success. One of our chief goals is to keep the value that the client is seeking in mind. And so for me, it's really understanding how do we segment across what our customers are seeking? And I think a lot of folks have spoken to that. And then also I think when we talk about the revenue number, I think is smart or as customer success, I think we can really be leaders in identifying ways to look beyond revenue, to really look at lifetime value of a certain client. And to understand that with our products and the way that products are purchased today, I guess in my space with B2B products, like enterprise versus a small startup is not necessarily the right segmentation anymore because the buyer is now, it could be a single salesperson. And so understanding the depth that you have in an organization and the penetration there is also something to note. So I'll stop there. Thank you, everyone. It's been a great conversation.

Mike Lee: This is a great conversation. I'm telling you, I'm running out of paper here on my notebook here. I'm just writing so much here. This is great. Now I was going to quote Blair out of a question that he appointed here, and I'll go to him because I'm hoping that he talks about what he just posted in the chat.

Blair: Yeah, thanks Mike. Jeremy, you just really blew my mind there to think about how many of us actually talk about that customer segmentation with the customers? Because honestly, I don't. I don't want to pigeonhole them or frame them in anything. So I think it's an awesome point to bring up because to me it's an internal tool that I'm not necessarily sharing with a client and I don't want them to feel as though they're being manipulated or put into buckets for my benefit. So really the question is, is there something... And it might even be a whole'nother days' topic even to talk about. Great topic today, Mike. Really appreciate it.

Mike Lee: Yeah. That is a huge thing when I think about what would I say to my customer, say," Oh, well, you're low- touch." We have in the low- touch space. What customer's going to say," Yeah, put me in the low- touch."" I want to be in the high- touch." Every customer is going to want that. So Jeff, I think I accidentally lowered your hand as soon as you raised your hand earlier. So I apologize. Go right ahead.

Jeff: You're good. Appreciate the discussion. How's everybody doing? This is fun to be a participant and not necessarily have to lead. So I'm excited to hopefully share a little bit, but to your point, Blair, we don't share that with customers right now. We really use that as an internal tool to help make sure that we understand where the customer is. And so we use a two vector system for our segmentation. So we look at what's the revenue that they're paying us today versus where do they sit in the market? And so where they sit in the market helps us determine, have they really maxed out in terms of maybe their lifetime value with us. And so I think to your point, we use it as internal tool, use it as a mechanism to make sure we understand, is there opportunity for growth with this customer? Have they really maximized or tapped out where they are? And then can we apply the resources against those? A couple of other things that we're trying or doing, and Jeremy, I love the thought provoking aspect of what you were talking about earlier in terms of is this really best for our customer? I think a couple of things that we're trying to do nowadays is really encourage our CSMs to think about their book of business as a way to engage customer to customer as well. How can our CSMs actually bring their customers together? Hopefully it's not competitive, but how can they actually create environments where there may be bringing multiple customers to a call instead of it just always being a one- on- one," Hey, I'm worried about you." How can we share insights across our customers? And if we can create the right kind of micro segments in a way within our CSMs customer base and allow them the opportunity and give them the space. We've found some really interesting things start to happen, where customers now are getting on a call with two or three or four other customers at a chance and saying," Hey." Just sharing almost a mini customer advisory board, but it certainly doesn't have the expectation of this bigger initiative. So that's just one thought to think about, that we've tried to explore, is helping our CSMs think about their book of business in that way. And then I think another thing just to call out as well is, I think tech touched is a word that probably drives me, I don't know if a lot of you, nuts. When people start thinking about," Hey, this is our tech touch segment." Because I think it's really getting across the wrong connotation with what I think we all are trying to maximize, which is how do we really maximize maybe the human to human component that we can while minimizing the administrative tasks and burden that our teams face? And so I think I actually had a really great podcast recording with a guy named Phil Davitt earlier and he's got me thinking all about this. Which is, how do you drive that home with your teams to make sure that when we're thinking about creating one to many programs, it's not to minimize a customer, it's really to maximize the effectiveness that we can drive customer to customer as well as one to many, but how do we maximize the human component and the human human aspect while minimizing the administrative tasks? And I think getting outside of this notion that tech touch is a specific segment that can always be automated. We don't have to talk to those customers is the misnomer to get over. So a couple of thoughts I just want to throw out and hopefully it was helpful, but appreciate it, Mike.

Mike Lee: Absolutely helpful. Always. The great Jeff, come on. Anytime Jeff speaks everybody's cameras come on and everybody leaves in like this here. So we all know that. Jeremy, I saw you raise your hand.

Jeremy: Yeah. I had a new take that I'm trying to use with customer segmentation that is about mutual success and articulating the vision of the company where we're trying to get to and who we feel are the customers that can best help us achieve that mission while wrapping that around their objectives. How can we both get what we need and letting them know that. You're not in a segment because we think we can get more money from you because money is the rocket fuel that makes this rocket go, it's because we're pointed in a direction and that's our destination, and we want to engage with the correct set of customers that will help us reach that destination and help them reach that destination. And so trying to segment based on what are users trying to accomplish, what our customer is trying to accomplish, but also what's the company trying to accomplish and making sure that you fill that piece in because otherwise it seems like it's just about money. And I think the segmentation can be more than that.

Mike Lee: Absolutely. Thank you for that, Jeremy. And you are really introducing some good concepts and good conversation, Jeremy. Thank you for that. Appreciate that. Jan.

Jan: Yeah. That's what I wanted to just add in was along those lines really, is that I think transparency is a good thing. I think if you are framing it in such a way that the customer understands like," Hey, we see you with this potential." Or," We think this is a good way of interacting with you and getting your needs met." Or like the micro groups that Jeff was talking about." We think you can benefit from interacting with these other companies that are also looking for best practices, or perhaps similar things you can learn from each other." I think there are ways of doing it so that they all feel good about it. And frankly, if you're ashamed of telling your customer what segment they're in, maybe you aren't segmenting properly. Maybe you're doing it with too much of your own perspective and not enough of your customer perspective. This is something you should be able to share. That's my opinion. And it should benefit everybody.

Mike Lee: Very good point there. So this is a topic we could absolutely go on and on about, because there's so many intricacies with segmentation. We really didn't get a chance to get into what do segments within segments look like. Because you can have a segment that is medium- touch, but in the inside is revenue- based. And also one thing I think I drew from a few different questions that came here is, does the CSM change when a customer moves from a segment? I guess it depends on how it's defined. Obviously if it's enterprise versus a commercial or a month to month, the CSM may change. But what happens when it changes in a like environment, small, medium business to enterprise is. Do we want to make that break? Does that break make it more challenging? We have time for a couple quick ones, and I just need five minutes here at the end here. So I'm going to do Andrew and then Trey.

Andrew: Really quick, and I got to jet here myself because I've got coaching cohorts. That was one of the things that we did talk about in our group is one of the things that we want to do as a CSM is to establish that trusted advisor relationship. And most CSMs, especially in larger companies are broken up by segments. So does our desire to re- segment create a problem because with that trusted advisor relationship because we've got to move that customer to a different CSM? If I've got a customer with a great relationship with their CSM, regardless of whatever our re- segmentation objectives are, I don't want to disrupt that. We have to be really careful about that because that's key. That's ultimate goal.

Mike Lee: Absolutely. Trey. Thank you for that, Andrew. That's great.

Trey: Thank you. I think for us, one of the things that we try to look at is both segmentation and then segmentation within segmentation as prioritization within a book of business for a CSM. So we want to do the segmentation on things that change much less frequently, like size of the company itself. So after they hit a certain threshold of ARR, they're in, they're with the high- touch team, they're not anywhere there. And then we're going to segment based on, is this a company that has say over 2, 000 employees or under 2, 000 employees? Because that doesn't change that often. All the rest of the segmentation or what we internally call prioritization of that book of business is based on those things that are changing all the time. How is the relationship with the champion? How active are the people? How much of a reach do we have? So that within a CSMs book of business, they're able to respond more dynamically on a month to month or week to week basis on where their attention goes, but it still stays with that book of business. So to your point, you can build that longer term relationship with the customer.

Mike Lee: Very true. That was really good points there. I didn't even think about that, the parts that don't move as much and then on the inside you can do things that are more variable a little bit more. Jeff.

Jeff: Yeah. I was just going to go along that point real quick that Trey mentioned, I didn't know if I had enough time, so I was typing it in the chat window.

Mike Lee: You're fine.

Jeff: But yeah, Trey, so just to give a real example of how we've done that. We have a segment of customers in our tier two and tier three segments. And what we did is we actually broke those down into smaller cohorts, and cohort might be the wrong word because it's not necessarily time- based, but we looked at smaller segments. And what we tried to do is look at who's not doing X within the product? And now we've got a program that we established, where we're running it for a two to three week process and trying to impact as many of those customers who aren't doing X as possible. It was a way for us, to your point, I guess it's spanning maybe our larger segmentation, but it's creating a smaller bucket of customers who aren't doing something that we need them to be doing. And we've really targeted that specific thing for the next three to four weeks with campaigns, marketing, our CSM. So we've got everyone rallied around these specific customers and trying to help them do X in the product. So it's just the way that we've tried to do that in real time with our teams.

Mike Lee: Oh, very good. Thank you for that, that was good qualitative information based on what we were talking about with the segmentation. So segmentation is extremely important as you can see. We're going up to the line here with this conversation and I'm sure there are people itching to have that, but I want to pivot just a little bit here. So as I said earlier, me hosting, I'm actually on the board here at GGR and I'm on a committee of diversity, equity and inclusion. And a lot of times diversity, equity and inclusion can seem like a really, really big thing. And it's really intimidating. And so as we leave today, I just wanted to leave one little nugget here that we can all do here to really start to address that we have to look at a different lens. We have to look at ourselves in a different lens to make sure that we are moving in a direction of diversity and inclusion. Especially in customer success where it's very much needed. It's about opportunity. And so what I will say, as we leave today, as we wrap up today, one of the things we talked about in our last committee meeting, which kind of stuck with me. I accidentally said it and I wrote it down and I enjoyed it was, the lowest level of diversity, equity inclusion is one person, myself working with someone who's not like me. What my challenge to you, to everyone here is when you're in your jobs, you're in your zones, look left, look right, look at the people around you and us as leaders, what we have to do is we need to look at providing opportunities for people who are not like us. And if we can do that, that one little movement, that one little action can really change things. And that's what diversity, equity and inclusion is at its lowest levels, is one person working with someone who's not like them. It doesn't have to be a big thing. You see these vice presidents and chief diversity officers and everything. That's all they're trying to do is get people to work with people not like them. And that can mean a lot of different things. That can mean race. That can be gender. That can mean handicapped. That can mean a lot of different things, but if we can commit as CS professionals, CS leaders to work towards that, it doesn't mean not hiring a group of people or ignoring a group of people. It just means let's look at it through a lens of how we're actually providing service of diversity of thought within our organizations. And it's that one little thing can actually make a really big difference in the trajectory of diversity, equity, inclusion within the CS community. I really enjoy hosting everybody. This energy is like nothing I've experienced before. I really enjoyed this. I hope to be back soon. Look me up on LinkedIn, Mike Lee at Spreedly. I'm really excited about this. Thank you all for your participation. I hope more people can talk next time. We had a lot of different types of people to talk this time, which is exciting to me. So let's do a little bit more and thank you all so much. Have a wonderful day.

Speaker 14: Hey guys, thanks so much for taking the time to listen to the Gain, Grow, Retain podcast. If you liked what you heard, please take a moment and share the podcast with your friends and colleagues and subscribe. We really appreciate it. Talk to you soon.


This week we are focusing on building segmentation.

A weekly segment:

CS Leadership Office Hours

Every Thursday. 11:30am ET.


If you want to join the discussion with thousands of other customer success leaders, join Gain Grow Retain:

This podcast is brought to you by:

Jay Nathan

Jeff Breunsbach