SaaS companies typically have access to a whole range of data regarding their customers. And once you’ve realized the insights to be gained from analyzing this data, you’ll want to use data analytics to improve customer segmentation across your business. Customer segmentation isn’t just about guessing what your customers want based on gut instinct – data analytics can actually help you identify those customer segments that are ripe and ready for a targeted experience.
One thing that’s for sure is that there is an abundance of data out there and it’s up to you to harness it. Data analytics is particularly important for customer segmentation because SaaS companies need to continually learning about their target customer groups. Not only does data analytics give insight into customer segments, but also helps you clarify the success of your customer segmentation program.
There is no data analytics and segmentation without a tool like Churn360. Churn360 does all the hard work for you by collecting the data and generating actionable insights in a format such as health score, and giving you the ability to use that data to segment customers effectively.
The Basics of Data Analytics and Its Role in Customer Segmentation
As you may already know, customer segmentation is the process of grouping customers based on shared characteristics. When supported by data analytics, this means your SaaS business uses the customer data available to develop a strategy that will improve key metrics such as customer lifetime value (LTV) or customer churn. It’s impossible to tailor a message for each individual customer, but you can become more targeted with customer segments.
When you’ve created your segments, you may want to conduct A/B tests with different groups of customers to find out whether a particular marketing campaign will have a high conversion rate, for example. The possibilities for data analytics to improve the success of your SaaS company’s initiatives are extensive, and all you need to do is make sure you have access to the right tools and resources.
Another way to use data analytics is to take advantage of behavioral data for your customers which offers insight into the way customers behave before taking a desired action for your company, such as downloading a whitepaper. Identifying patterns will enable you to create more targeted campaigns and experiences for different types of customers.
Further uses for behavioral data in customer analytics include applying it to create tailored product experiences. For example, if customers are heavily using one feature but ignoring others, you can create a segment that guides them through the product and enhances customer success. In this way, data analytics can be useful for SaaS companies pre and post-sale.
Why You Need Data Analytics for Customer Segmentation
Customer segmentation data analytics is all about understanding more about your customers. With analytics, you can get closer to your customers and find out how you can approach them to offer the best experiences with your brand. A one-size-fits-all approach to customers simply doesn’t work for SaaS companies who want to build highly personalized campaigns and experiences for their customer segments.
By using data analytics, you’ll be able to find out which segments of customers are most profitable for your SaaS business, with the lowest customer acquisition cost (CAC) and highest lifetime value (LTV). Data analytics means using your customer data in a way that is most beneficial to your company and generating insights that tell you which action to take next.
For example, you might run a marketing campaign on Facebook which results in a high rate of conversion, but your data analytics tells you that the LTV is low compared to other platforms. This might mean your budget could be better spent elsewhere.
When you know more about your customers and their behaviors, you are better able to develop strategies to engage with them. Before using data analytics and segmentation, you may be using a model that is completely ineffective. The only way to know is to analyze the data and find out if there might be a better way. Data analytics can help you stop spending money on campaigns that won’t work, and spend your marketing budget more wisely.
Customer Segmentation Strategies
Using Data Analytics to Segment Customers Based on their Characteristics, Behaviors, and Needs
The data you need to use to categorize and analyze your customers should be readily available. When customers first sign up to your SaaS product, you can use the welcome screen to collect demographic data and other traits such as company size and role. It’s up to you to decide which forms of data will be most useful in improving your marketing campaigns and product experiences.
To find out the needs of your customers, you will need to collect the data from customer success calls or customer interviews, since this type of data requires a deeper level of research than simply setting up a form. You can also combine this type of insight with product usage data to find out how different customer segments are engaging with your platform.
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When you use a platform like Churn360 to help you collect and analyze your data, you speed up the time it takes to generate useful customer insights around which you can base your customer success strategy. Finding fruitful data sources and deciding how you want to collect and analyze this data is an important aspect of data analysis in customer segmentation for SaaS. Churn360 integrates with other popular platforms like Pipedrive and Charge bee to synthesize your customer data in one view.
The Future of Customer Segmentation and Data Analytics in SaaS Business
Customer segmentation and data analytics in SaaS businesses is going to become more and more common. As tools become more sophisticated and cheaper, collecting and analyzing vast reams of customer data becomes increasingly accessible to smaller businesses with more limited budgets. Since SaaS businesses are allocating resources more effectively, they will be able to invest in more growth-enhancing activities like product development and customer success.
When you segment your customers, you stand a better chance of reaching them with experiences that resonate with their unique wants and needs. Using data analytics to underpin your customer segments means that your choices can be quantified and you actually understand the success and effectiveness of the tactics you employ.
Data analytics means you not only collect the data but you process the data in a way that generates actionable insights. Tools like our own Churn360 help with this stage of the operation and give you the ability to understand your customers on a deeper level. Churn360’s AI capabilities make analyzing your customer segmentation data an easy process, enabling you to use it to inform your customer success efforts.
Customers inundated with advertising have now come to expect a more personalized experience from your SaaS company. When you use data to become aware of their wants and needs, you increase conversion, retention and loyalty.