Segmentation is often an annual exercise used by your marketing and/or sales team to target product/service offerings and determine sales coverage. Companies often have simple segmentation schemes based on the size/revenue/ARR of the customer. The way the model goes is that the larger the customer, the more coverage they get in your “Enterprise” tier.
There are 2 major gaps observed in most segmentation programs. First, it focuses most of your coverage in your largest accounts. While for some companies, this might represent the greatest amount of potential expansion opportunities, it also neglects small/midsize customers that have tremendous growth potential. Often times, your largest customers may have fully adopted your portfolio and might be saturated in terms of significant growth opportunities. These customers might be happy and not in danger of churning, but also not growing much. These customers won’t benefit from additional coverage and the investment would produce better ROI elsewhere.
Secondly, it is important to consider the role of your post-sales teams in your segmentation model. Segmentation is often a useful way to position your service tiers, service offerings, and post sales coverage. It simplifies the alignment not just for your customers but also for your internal teams in sales, marketing, and product. For example, a large customer that has limited growth potential, may not need much sales coverage. They may be better serviced by a medium-touch Customer Success Manager running a Nurture-type CS motion. A smaller ARR, global logo’d customers which low share of wallet might need both sales and a high-touch CS to grow effectively.
In summary, consider the strategic value of your segmentation program and what actions in drives for your organization. If it’s only a once a year annual planning exercise, you may be missing the true value.
