How to improve your (IT) services by using customer segmentation

Voit, Stefan | 30.03.2023
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One service concept for all? Many opportunities are being missed by doing this. After all, people and companies have different preferences, problems and needs. Nevertheless, the target group of a product or service can be summarized on the basis of characteristics. If a company divides its customers into clusters, it can not only address the right customers with the right offer—but also improve its overall service. This is how you make use of segments in customer service.

What is customer segmentation?

Customer segmentation means dividing a company’s existing customers into homogenous groups. This results in matching customer clusters. However, this division is not a random sample. Instead, it is carried out on the basis of predefined characteristics. A typical, simple application would be a division according to generated revenue.

Sales or marketing departments have been doing customer segmentation for a long time. They know their target groups precisely and derive appropriate measures. But clustering also brings significant advantages in (IT) service management.

Special case of the customer term in service management: In the narrower sense, “customer segmentation” means the division of external persons who purchase products or services; in other words, “real” customers. In the case of internal services provided by one department for another, however, employees can also be designated as “customers” and segmented. For example, all trainees may belong to one segment and require the same type of IT service.

What benefits do ITSM software solutions offer for customer segmentation in service management?

If you segment, you can provide more relevant support. Your buyers or users feel better understood and “in the right place”. This increases satisfaction, customer loyalty and thus generates more sustainable revenue with less effort.

Clear customer groups also make it easier for you to align new product developments with actual requirements. Solutions can be offered more and more quickly, processes are optimized. Other departments can also benefit from customer segmentation. For example, the sales department can use existing information from the service area for its cross-selling or upselling strategies. The more targeted this kind of cross-departmental or cross-location knowledge transfer is (for example, via a shared knowledgebase), the more sustainably service offerings can be improved.

When a customer calls and is assigned to a cluster, they is immediately directed to the right department, for example, by retrieving relevant information from the CMDB about exactly that one customer. After all, nothing is more frustrating than having to explain a concern multiple times because the assigned specialist can’t help. With ITSM software, you can assign roles and rights to your departments—with the associated responsibilities and permissions—and they can then perform exactly the steps that a customer in a particular segment needs. ITSM software that uses central customer segmentation data also helps with the categorization and prioritization of service requests and incident reports. AI technology can assist with some of these steps if, for example, a customer segment contacts your support with similar requests particularly often.

Another option would be to use a chatbot to automate the handling of services for customers in a particular segment. The resources freed up increase the value added (a central element of the ITIL® framework) and support for higher-value customers can also be improved. Support is also provided by a self-service portal in which customers can find accessible services and which offers the possibility of solving a problem without the assistance of the support team (via solution instructions in knowledge databases), reporting incidents or requesting a service independently with just a few clicks.

All in all, the customer segments result in higher first-resolution rates, more relief for your support team, and an overall higher-quality service offering with resulting greater customer satisfaction.

What are the options for segmenting customers?

There is no universal rule for segmentation. Which method is the most appropriate depends on your goals, the industry, and your business model. In customer service, for example, segmentation by customer lifecycle makes sense. This is because different issues and problems arise at each stage of the customer journey.

The following attributes are commonly used to create customer clusters:

  • Sociodemographic
    Especially in the B2C environment, attributes such as age, gender, occupation, marital status or income are relevant. Socio-demographics influence the use of technology and thus the way in which the customer interacts with customer service.

  • Geographic
    Breakdown by place of residence, for example, rural or urban, domestic or international.

  • Industry-specific
    Depending on the industry, there are specific requirements for services and products. Such a grouping makes sense in the B2B sector.

  • (Buying or communication) behavior
    Does a person buy frequently or rarely, and if so, which product? For internal services, the frequency, type of requests or communication channel can also be recorded.

  • Customer lifetime value
    CLV = How much is this customer expected to bring in over the course of his or her customerhood? VIP customers (via a premium membership or due to high turnover) can expect better service. This prioritization is usually also reflected in the service level agreements; i.e., which services must be provided with which response time and to what extent.

  • Psychographic
    Also called value-based customer segmentation. It is concerned with behavior, lifestyle, interests and opinions. Psychographics are particularly relevant in advertising and in addressing customers.

  • Customer life cycle
    Is the customer a lead, a new customer or a regular customer? What service needs can be derived from this?

When deciding, consider your business strategy: Not all clusters are suitable for every company. A company that operates purely locally evaluates the geographic cluster differently than a company that only offers digital services. Also, adjust your segmentation strategy and thus the categories on a regular basis. With a new product launch, there could be shifts within your clusters.

Boost your service management and use use customer support software

Your service management will be better the more processes you can automate and clearly manage in one software. Especially in IT, many requests arise every day that need to be processed. With flexibly configurable ITSM software, you can make services more accessible to the relevant target group. If you have segmented your customers in advance, incoming tickets are presorted by the software or enriched with relevant information. Only people with the appropriate roles are assigned to process the tickets.