Vital SaaS Customer Segmentation Metrics to Analyze

customer segmentation metrics

Every customer is different. Period. The sooner you realize that and adapt your strategies to fit each person’s preferences and needs, the sooner you can expect your business and revenue to grow. This is exactly what customer segmentation is all about. 

In the following article, we will explore key customer segmentation metrics and Akita’s advanced customer segmentation tools that can help you personalize your approach and improve customer satisfaction and retention. 

Let’s dive in!

Customer Segmentation: Definition

Customer segmentation refers to the process of dividing your customer base into cohorts that share similar traits. Its prime goal is to help you better understand your customers and target each group with personalized content, communication and offerings. 

The main types of customer segmentation in SaaS include:

  • Demographic segmentation
    • Demographic segmentation is based on aspects like age, location, income, gender, industry, company size, and geographic region. This customer data is usually public, and if not, you can collect it via sign-up forms or welcome pages (the first thing your new users see as they log in to your software for the first time.)
  • Behavioral segmentation 
    • This type of customer segmentation data refers to their in-app behavior, usage patterns, frequency of use, engagement with the product, and feature adoption. This is the easiest way to distinguish at-risk customers from power users and identify opportunities for upselling. 
  • Technographic segmentation
    • This one is based on the tools, devices and operating systems that the customer uses, and it allows you to optimize content or products to improve their usability. It is important for SaaS companies that offer integrations or complementary products. 
  • Needs-based segmentation
    • This type of customer segmentation includes customer needs, wants, and pain points when dividing them into cohorts. By using this type of customer segmentation, you can personalize the onboarding processes so that new users can easily and rapidly discover the features they can benefit from the most. 
  • Psychographic segmentation
    • Psychographic segmentation segments customers into groups based on their attitudes, values, personality traits, and lifestyle. It helps you understand what drives customer behavior, preferences and purchasing patterns so that you can create accurate user personas and improve product development. 

By adequately segmenting your customers, you can create more effective marketing strategies, improve customer service and meet the needs of each segment. This leads to improved customer loyalty and retention by personalizing the customer experience and providing your customers with the exact thing they came for. 

What Customer Segmentation Metrics to Track?

Managing to understand segmentation metrics and perform customer segmentation analysis properly can be your shortcut to sustainability. In the business environment, where each link, such as customer satisfaction, retention, and loyalty, depends heavily and usually exclusively on the customer experience.

You should fully understand your customer base so that you can provide everyone with unmatched service. 

Now, let’s see which customer segmentation metrics can help you achieve the given goal.

Customer Churn

Churn rate refers to the customers you lose during a certain timeframe. By tracking this metric, you can identify at-risk customers based on their behavior, create effective retention strategies, improve offerings based on customer data, and focus on the segments with lower churn rates. 

Customer Satisfaction Score (CSAT)

It measures the satisfaction level of your customers and is usually measured via surveys or feedback forms where customers have rated their satisfaction on a scale from 1 to 5. 

Net Promoter Score (NPS) 

It measures customer loyalty and satisfaction through a survey question “ How likely are you to recommend our company or a product to a friend or a colleague?”.  NPS shows the rate from 1 to 10 that customers choose.

Customer Lifetime Value (CLTV)

This segmentation metric relies on predictive analytics to assume how much revenue you can get from a certain customer over their entire relationship with your business. Then, based on the data from all three aforementioned metrics, you can single out the most valuable customers and send targeted messaging.

Monthly Recurring Revenue (MRR) 

This one refers to the predictable calculation of recurring revenue. Since SaaS businesses depend on subscriptions, this is one of the most crucial customer segmentation metrics as it allows you to identify high-value subscribers who make significant contributions to revenue. 

Customer Acquisition Channel 

By tracking which channels (paid advertising, referrals, or organic) customers are using to discover your SaaS product and sign up for it, you can understand which are the most efficient for acquiring various types of customers. 

Akita and Customer Segmentation

Akita is a customer success platform that helps SaaS companies get the most out of their customer relationships. 

With Akita’s advanced customer segmentation feature, you can:

  • Integrate easily with other platforms and tools
    • You can gather data from various sources to create a comprehensive customer segment. 
  • Perform Customer Health Scoring
    • You can create customer health scores based on metrics like customer engagement, product usage, and feedback. When you create segments based on their customer health statuses, you can prioritize resources and efforts more efficiently. 
  • Build up-to-date and refined customer segments
    • You can easily filter your customers by any trait you find important. All the imported traits of contacts and accounts are stored within the platform, so whenever there is a slight change in the data and KPIs, you can filter the customers based on them and modify the segments as you go. 
  • Get comprehensive customer data overviews with Akita’s Pin Functionality
    • You can check your key segments’ data easily by pinning it to the dashboard. You can also share the customer segmentation data with the entire customer success team.
  • Set real-time alerts
    • Whenever the contact or account is added to a segment, you will get an email, which allows you to act quickly and positively on the new change. You can also set automated triggers for the at-risk customers and prevent churn. 

Conclusion 

By understanding the vital customer segmentation metrics and implementing customer success tools like Akita, you can better understand your customer base, improve customer engagement and retention, and drive business growth.

Understanding that not all customers are the same is the first step towards delivering an exceptional customer experience, which is the backbone of any successful SaaS business. Then, perform customer segmentation adequately, monitor its key metrics, and modify the strategies based on the findings to ensure your business is on track for success and sustainability. 

Frequently Asked Questions

What are the 5 types of customer segmentation?

Demographic, behavioral, technographic, needs-based, and psychographic segmentation.

What are the KPIs for segmentation?

The most important KPIs for customer segmentation include customer satisfaction, customer lifetime value, and conversion rate.

How do you measure the effectiveness of your customer segmentation strategy?

To measure effectiveness, compare the performance of each customer segment on each KPI to evaluate them. Don’t forget to test and modify the segments based on the insights from the data analysis. Test different approaches on each segment to see how they respond and measure the impact.

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