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Segmenting Customers for Personalized CSaaS: Boosting Retention and Satisfaction
trantorindia | Updated: August 29, 2023
Over the past few years, customer satisfaction trends have broadened to include Customer Success as a tangible and impactful aspect of businesses’ strategy. While dedicated sales teams deploy techniques to influence prospects to buy, Customer Success teams influence (and understand) customers to help them stay loyal and polish business offerings.
In a market environment that averages a 30% churn rate, it is imperative to identify and retain customers.
To that effect, Customer Success as a Service (CSaaS) empowers organizations to reduce customer churn and increase retention by mobilizing resources toward personalization and customer segmentation, among other techniques.
Understanding Customer Segmentation
Customer segmentation is a logical approach to partitioning your customer base using common attributes like geography, gender, age group, etc. Identifying each customer based on their segment is the first step a business takes towards creating personalized experiences for its audience:
- Demographic segmentation
Subdividing the audience into groups based on race, occupation, nationality, family size, income, marital status, etc., helps your business personalize marketing messaging based on demographic characteristics.
Psychographic segmentation
Segmenting the audience based on their personality, social status, lifestyle, preferences, and other psychological characteristics is arguably the most valuable of the three approaches. You gain insights into customer likes, dislikes, wants, needs, and preferences.
Behavioral segmentation
Measuring a customer’s engagement level with your business, including spending and purchase habits, browsing, brand interactions, etc., has extensive use in predictive analytics. This enables your business to extrapolate metrics for the immediate and near future.
Observing how personalization has the potential to deliver a 10% lift to sales and a 5x to 8x boost to marketing ROI, customer segmentation is more a necessity than an option today.
Benefits of Personalized CSaaS
CSaaS technologies make it possible for businesses to personalize customer experiences at scale. Here are a few more important benefits:
- Enhanced Customer Engagement
The level of your customers’ engagement in your brand directly reflects the level of personalization in the experiences you offer them.
Custom tailoring all communications and brand messaging, including personalized onboarding, navigation, recommendations, etc., greatly influences engagement levels.
Increased Customer Retention
Customer satisfaction is a direct function of the customer journey and personalization success. Retaining your customers takes more than giving out loyalty rewards and special discounts.
In a recent release by RedPoint Global, 74% of customers unequivocally said they stay loyal to the brands that understand them.
Personalization based on interests, preferred channels, demographic data, and other various aspects has a tremendous impact on repurchases, purchases, recommendations, and loyalty:
Other Key Benefits
- Objective-based onboarding with behavioral segmentation to provide contextual experiences.
- Your reps can offer reactive customer service to make your customers rethink leaving you.
- CSaaS makes it possible to design a unified customer engagement that encompasses product success, customer success, and support.
- Customer segmentation is an excellent way to deliver a high-touch experience across all tiers.
- CSaaS methodology helps develop a strategic instead of transactional approach toward managing customers.
- Your business stands to enjoy higher renewal rates with improved customer journeys.
- Customer segmentation helps improve product adoption with higher engagement and usage.
- One of the key benefits of customer segmentation is the capability to leverage insights to manage customer churn.
- Your CSaaS strategy fully embodies the business goals, enabling executives to stay focused through targeted and converging efforts.
Implementing Customer Segmentation for CSaaS
Customer success relies on your business’s understanding of their needs, preferences, likes, and dislikes. Implementing customer segmentation, thus, begins with data collection.
- Data Collection and Analysis
Customer surveys and feedback forms provide a direct method of gathering firsthand information. Connecting these forms and data to AI-based analytical tools reveals usage patterns and behaviors that can easily be tracked for designing optimized and personalized customer journey maps. Other customer insights to follow include:
Segmentation
Each business has its target audience. Survey results in the first phase reveal who your customers are, how they prefer to be reached, and what they like to buy. This helps with identifying your cohorts and setting priorities for each segment identified.
CSaaS Strategy Customization
Tailoring customer journeys with segmented content, customized onboarding, targeted success plans, and dedicated support ensures solidified customer success from the beginning. Contextual digital experiences, including dedicated Customer Success Managers, aid tier 3 clients in their digital journey.
Successful Implementation of Personalized CSaaS
Understanding your customers and providing proactive solutions is the cornerstone of customer success.
One of the most iconic examples of customer segmentation is demonstrated by KitKat. This popular wafer-chocolate brand operates globally and presents its geographically varied customers with unique flavors specific to their tastes and regions.
KitKat Japan is especially known for its unique flavors dedicated to each of the prefectures in the country, ranging from Sakura to Matcha and even Sake (traditional Japanese alcohol).
Airtable displays a similar customer success strategy by reducing the time and effort it takes their customers to organize, present, and share their data. They do it by intuitively displaying their templates already categorized into relevant niches.
The format in which information and resources are presented to customers displays Airtable’s in-depth study of user needs and usage behavior on their website. The three types of most used templates (Content calendars, project trackers, and marketing campaign tracking templates) are boldly presented toward the top. The left sidebar houses an alphabetically sorted list of all the other categories.
Challenges and Considerations
With GDPR and other user data privacy regulations in strong effect around the globe, businesses may face certain challenges in establishing CSaaS personalization processes in their organization.
Setting up a baseline protocol of user consent for data collection, automated compliance monitoring, and regular security updates can help propel the organization in the right direction.
With technology, however, comes the innate challenge of balancing automation with humanization. Human intervention should be part of the specific cohorts that require humanization to achieve desired results. For instance, customer support can be broken down into two cohorts: straightforward customer queries that chatbots can answer and more complex ones requiring trained service representatives to intervene.
The ultimate challenge with customer success in personalization is faced when dealing with metrics. Working with baseline CSAT and retention rates recorded before customer success initiatives can be a good starting point. However, launching customer success initiatives is a step towards significant process and workflow-based changes; it may face resistance when tweaking and adjusting the operations.
The Big Picture
Customer success, personalization, and segmentation – all go hand-in-hand toward a business’s end goal – improved revenues.
Organizations are rapidly recognizing the need to understand their customers deeper than before. Almost 60% of the teams in a survey agreed they have a dedicated Customer Success operations role for that purpose, underscoring the need for technologies and platforms oriented towards personalization and segmentation.
Businesses skimming the surface of customer satisfaction risk missing out on the benefits of retention and loyalty. CSaaS is poised to assume a central role in determining customer retention for businesses with personalization and segmentation at the helm.
Customers expect to be understood – and the customer success technologies, services, approaches, and initiatives that enable businesses to act accordingly are the way forward.
At Trantor, we understand the significance of delivering exceptional customer success services that cater to each customer segment’s unique needs and preferences. Our CSaaS solutions are designed to help businesses reduce churn rates, drive customer loyalty, and elevate overall satisfaction levels.
