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Best Practices Guide for Setting up Segments

As a SaaS company grows, customer segmentation becomes an important tool not just for the Customer Success team but also for the entire company. 

Segments help you bucket your customers and users into cohorts with similar characteristics and needs. Segmentation also helps you to run programs, services and prioritization that are tailored to each cohort. An apt segmentation is key to maximizing retention, driving product adoption and increasing revenues. It pays off in the long run when you can make key decisions about the growth of the business by backing it up with solid, actionable data.

At CustomerSuccessBox, you can segment Accounts and Users separately. I’m listing down some of the key/primary factors to be considered while segmenting customers:

1. Account Segmentation based on Current $ value

The most logical segmentation of customers is based on the amount (Monthly Recurring Revenue (MRR)) they are paying.  Think of this as how do you prioritize your customers in your internal meetings. 

Here is one of the examples of how segmenting can be useful in setting up Health Parameters :

a. For Multiple versions of Single Product

Pricing Plans
F1, F2
F1, F2, F3
F1, F2, F3, F4, F5

You would want to calculate the health of customers in the Starter plan based on F1 and F2 whereas you would want to calculate the health of Enterprise customers by including F3, F4 and F5 as well.

In fact, you would want to calculate health separately if the customer in the enterprise plan is using the features for which they are paying extra. If they are not using those features, they might downgrade.

So the Segments at CustomerSuccessBox could be:

  1. Starter

  2. Business

  3. Enterprise 

b.  For a Single Product

If you have a single product and flat product price, you can do the segmentation based on MRR / Annual Recurring Revenue (ARR) (as per your payment terms).

If you create Segments based on tiers you could observe your SMB customers and plan to automate few things for them whereas if you have segmented Enterprise customers you could plan a different set of activities like visiting them, setting up Quarterly Business Reviews (QBRs),  creating various other necessary touchpoints.

So the Segments at CustomerSuccessBox could be:

  1. Tier 1 -with MRR > $Y

  2. Tier 2 - with $X < MRR < $Y

  3. Tier 3- with MRR < $X

 2. Account Segmentation based on Customer Lifecycle Journey

Every customer is looking at different outcomes at different stages of their journey. You would want to strategically organize Accounts into various segments based on their stage. This also helps the Customer Success team to organize their portfolio and proactively identify off-track customers. Moving forward, you could also create playbooks for making customers successful at each stage.

An example of segments based on stages of the customer journey, criteria for each stage and goals at respective stages.

Stages of Customer Journey


Goal of the respective stage


Before signing the contract

Understand the capabilities of the product


First 1 to 3 months (depending on your onboarding cycle)

  • Customer goes live with the configuration of key features.

Nurturing  and Value delivery 

Once the customer is live with the product

  • Business users are getting value

  • End-users are using the system 


3 months before subscription ends

Ensuring a good relationship with the Power users and if the customer got value out of the product.


Customer cancels their subscription

You can have a plan to get the exit interview and then keep sending them some exciting product updates

So the  Segments at CSB could be the combinations of:

  1. Onboarding - Enterprise

  2. Renewal - SMB

  3. Nurturing (Post Onboarding) - Enterprise

  4. Enterprise - Renewals

Note: A customer can always be a part of multiple segments.

3. Account Segmentation based on various other Parameters

Although these are the primary customer segments, you can also segment the customers based on various other parameters like:

  1. Based on the industry
    Which industry does the customer belong to? You can eventually start curating best practices for these industries and provide more value to the customers. This segmentation will help you to polish the onboarding process.

  2. Based on Use-cases that your product serves
    As a product can be bought for various use-cases, you can segment customers based on their use-cases. You can study the behavior to get the best practices which can also be useful for generating the cross-selling opportunities.

  3. Based on Geography/ Region
    This segmentation helps you in market study and with the planning of resources.

You can create Segments based on various parameters. Your Customer Success Manager at CustomerSuccessBox will help you configure these parameters within our platform.

4. Account Segmentation based on Potential Value - PARR (Potential-ARR)

As a company, you are also looking for expansion. So as a Customer Success strategy, you should segment the customers based on potential value and then strategize on how you can take the customer from current ARR to PARR.

Quick Example: You have a product which can be used by all the departments of a company, but currently only one team is using the product, then you have the potential to expand to other departments as well. If you segment the customers, then you will be able to strategize your efforts and actions to expand that cohort.

Potential can be on the basis of expanding to different geography, use-cases, products, more consumables, etc

5. Account segmentation based on Engagement level (Positive and Negative)

In order to be proactive and focus the attention, you can also segment based on the engagement level of customers. If the customer is highly engaged you can plan some marketing/advocacy activities. Whereas if there is a lack of engagement, you can take proactive steps to re-engage.

Here are a few parameters for lack of engagement basis which you can build the Segments:

  1. More than 30 % of the total number of Users have not logged in in the last 10 days

  2. Have not conducted QBR in the last 120 days

  3. Usage has dropped by 30 % in the last 30 days

  4. Have no communication/touchpoints in the last 30 days

  5. Admin/Executives have not logged in in the last 15 days

You can also create various other segments.

 6. User segmentation based on Engagement level 

 Sometimes, you would not want to see the Accounts level, but would want to keep an eye on the engagement level of users.  If there are few dis-engaged customers, you would want to put them back on track. Segmenting can also help you to automate communication for certain behavior.

Segmenting of users can be:

  • Based on the Role of a user within the product like Admins, Users, Co-admins, etc.

  • Based on the status of users as Inactive/Dis-engaged users (users who have not logged in in the last 14 days).

  • Based on the usage of critical features: Users who have used X, Y, Z features in Y days.

These were only a few examples of Segmentation. With CustomerSuccessBox, you can segment customers on various other criteria.

Get in touch with your Customer Success Manager at CustomerSuccessBox to configure such Segments for your business and start focusing on the right segments.

Want to configure in CustomerSuccessBox now? Click here to see the configuration details.

Not a Customer? Request a CustomerSuccessBox Demo and learn various ways to build effective Customer Success strategies via Segmentation.

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  1. Anu Dudhat

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