Everyone knows their best customers - those flagship accounts that place large orders, renew consistently, and lend us the use of their logo when we ask nicely. We know their buying behavior and price sensitivities because we speak to multiple contacts in their organization every month and twice a year we have lunch. Because these accounts are so valuable we have dedicated account managers that are responsible for the experience of these clients.

But what about the masses of customers that constitute the bread-and-butter of our revenues? What do we know about them? When do they buy and when do they renew? What makes them attrite? When and how can we reduce the risk of attrition and improve the likelihood of renewals and repeat orders, considering that we cannot afford to manage all these accounts with the same personal attention we give our flagship customers? How do they prefer to be serviced?

In short, how do we manage the customer experience for these clients in a way that optimizes our marketing, sales and service investments and drives the greatest levels of profitability? Any strategy we put in place absolutely needs to start with that timeless imperative – know your customer – and with the sophistication of BI tools today this means strategic segmentation.

To be effective, segmentation needs to be strategic in two ways that often differentiate it from its more tactical cousins. First, the way we segment our clients needs to consider a number of data points or behaviors. Applying simple rules to stratify based on a single variable, like revenue or product line, will not drive the results one would hope to achieve. Second, our client segmentation must resonate outside the Marketing department. Once having developed and harnessed strategic segmentation as a backbone of a customer experience strategy, all areas in the enterprise that have a role in the customer experience must be culturally socialized to think and interact with our clients in the context of the segments that define their buying, attrition and service behavior. Operationally we can integrate and propagate segmentation information in our existing CRM/CEM systems and ensure we align our marketing programs to acquire, develop, and retain our customers according to their segment profiles.

While we can’t take every client to lunch, we can often use the insights of strategic segmentation to know our customers just as well.