Territory Planning &

Customer Segmentation

Customer segmentation and territory planning for SaaS businesses is a process that must evolve as the customer base changes. There are early benefits for startups to be intentional in understanding the characteristics that customers have in common and those that make each of them unique. Later stage software companies also will need to revisit customer segmentation to ensure that staffing territories reflect the desired treatment models for different tiers of customers and customer experience programs are tuned to the current needs of your customers.

With experience across various stages of funding and maturity in Customer Success, I’ve learned the most important data points to consider and the strategies that help CS teams adapt as the customer base evolves. Poor customer segmentation will cause ineffective customer communication, inequitable staff workloads, and higher customer churn. Excellent segmentation allows your teams to use CRM and marketing tools effectively to work with customers, personalizes the customer experience, and allows a clear view of the state of your customers and business. 

Though revamping the customer segments, tiers, or territories can have benefits, it can also disrupt the business and create future issues if not completed with intention. Territory changes that affect partnership pairings may prompt emotional responses from tenured CSMs and long-time customers. Customer revenue and adoption are not always reliable indicators of a customer's needs. These factors drive the need for methodical assessments, modeling, and analysis before starting to recategorize accounts. 

Below are the steps I take when working with Climate Tech SaaS companies in a segmentation and territory planning exercise. These activities will vary depending on the size, stage, and type of solutions the software company delivers.

Customer Segmentation Process

  • Assess Current State

    Before making changes to the segments, tiers, and territories for your customers and teams, an assessment of customer attributes provides the info needed to make decisions later. Using data from the CRM, CSMs, surveys, and the Customer Journey mapping, we establish a foundational truth on the state of the customer base. Building on this clarity, it’s possible to agree on a desired state, roadmap, and timeline for planning and changes.

  • Forecast and Growth Modeling

    Customer segmentation has to be completed based on the current state of customers and with an understanding of the future state as your customer base grows. Looking at the customer growth models, revenue forecasts, and churn assumptions, we can predict how customer territories will evolve as your business grows. Additional considerations including the account management plans and technology assumptions ensure that all resources are considered in the planned future state of your segmentation.

  • Workload and CS Deliverables Audit

    Territory planning needs to consider the workload that customer facing teams are managing and the desired results that are expected from their actions. Even if timecards are not being logged by everyone, a simple assessment from staff helps balance perceived and actual capacity of the team. Layering in top-down planning of desired actions with bottoms-up time estimates gives a realistic view of staffing challenges and opportunities.

  • Customer Cohort Analysis

    Using the data and conclusions from the prior steps, tables and dashboards will distill the options for new segmentation and territories. Sometimes additional enrichment services or customer research is helpful at this stage to fill in knowledge gaps that are surfaced about customers. Sampling analysis can save time and allow us to infer the larger population if the customer base is large enough. Internal or industry benchmarking should also be considered at this stage.

  • Staffing Scenarios and Mapping

    Too often Customer Success teams will jump to this work when remapping territories for their teams. The prior research and analysis informs the pros/cons of different scenarios and will make budgeting and staffing considerations more logical and based on facts. Internal stakeholders are given an opportunity to give input on the future state at this stage to help in the change management process.

  • Transition Planning and Handoffs

    Establishing a logical process and timeline for the internal customer transfers to new account teams is critical in maintaining a positive customer experience. A project plan, worksheets, and an aggressive but realistic timeline needs to be established. Document plans for exception criteria and processes to ensure fairness and consistency. Customer communication should reinforce the benefits to the customer experience and long term success. After the new territories are established, checkpoints will ensure that new processes and responsibilities are being followed.

✺ Frequently asked questions ✺

  • The classic answer of “it depends” applies here based on the steps that we decide to include in the process and the complexity of your customer base and desired end state. I’ve completed a re-segmentation in as little as 2 weeks and have worked on other projects that have take place over one business quarter.

  • The goal in taking the steps that I’ve outlined above is to avoid any negative disruption to your business and customer experience. There will be changes for people to adapt to but we’ll work to include those in our change management plans.