How To Segment Your Recurring Customers & Unlock The Door To The Success

According to research, the segmented campaign is proven to yield 14% open rates, while websites and landing pages that are created to target specific audiences are likely to receive 2X to 4X responses. Similarly in the case of subscription management services, since companies are offering a different set of subscription services, packages, and subscription boxes, their audience is already segmented. But to grow in terms of revenue and to expand vertically and horizontally, you need more than just one segment. Hence, opting for subscription customers base segmentation can help businesses in expanding into a market that is otherwise not approachable and leverage the data produced by subscription software to devise effective marketing strategies.

Here in this article, SubscriptionFlow experts have identified what customer segmentation is, why customer segmentation is important, how you can create a buyer persona by keeping segmentation in mind, and how segmenting your customer will help your business to grow its customer base.

Also Read: Subscription Software And The Scope Of Recurring Billing Management

Segmentation of Customer Base

When it comes to explaining what segmentation is, you need to know that it is the process of segregating your customer based on their demographics, interests, profession, and geography, etc. And the essential step is to know the essence of segmentation which includes the reasons and purpose of segmentation. Similarly, when it comes to recurring customer segmentation, their nature, behaviour, and interest fuel the marketing success. One disadvantage of not having a segmented audience is the churn rate that is caused in response to irrelevant newsletters and emails, the difficulty faced in payments, customer experience, and customer satisfaction.

Type of Segmentation

In the context of subscription businesses, there are two types of segmentation, first pre-subscription segmentation, and post subscription segmentation. In pre-subscription segmentation, the purpose is to attract the relevant customer base to opt for your subscription. And, in the post-subscription segmentation, the businesses can identify the KPIs performance, study customer behaviour, and devise a content strategy to reduce churn rate, with the help of statistical reports.

1. Pre- Subscription Segregation

This includes segmenting your customers based on their regions. It ultimately helps businesses in acquiring customers by making content relevant and resonating. For example, you sell a product for monsoon, and your customer base living in India or Africa is going through the heavy pour. You can structure your content to provide regional discounts, offers, and coupons to engage customers, ultimately you will get higher returns
It is the most important thing when it comes to segmentation. Knowing what your customer likes, and which content they interact with more can give you a clear picture on how you can target your audience.
Education and Gender. In addition to interest, and geography, segmenting customers based on their educational background and gender helps the marketer to orient and design the content to sell and upsell the product while not losing sight of the customers’ needs.
Another way to segment the customers is based on their age, race, location, profession, gender, and socio-economic status.
Lastly, you can opt for behavioural segmentation. This might include, cart abandonment behaviours, payment cancellation, or usage-based subscription, and much more. Identifying and grouping your customers not only ease the business efforts but also reduce the complications faced in sales, marketing, and billing automation.

2. Post Subscription Segregation

The moment leads become recurring customers, there can be two segmentation of your customers. The first, Dorment Subscribers—ones who have not used your product or services for a long time. There can be various reasons for dormancy. For instance, some businesses intend to offering a personalized experience to recurring customers where they offer subscribers to customize their subscription plan and cancel subscriptions whenever the subscription plan fails to satisfy their needs in which case the customer dormancy rate is higher. Customers subscribe but use services only when they need them.

The second type is Active Subscribers—recurring customers who pay the subscription fee and use the services that you offer.

Customer segmentation helps businesses when they have to calculate MRR and ARR or devise a new strategy that can motivate dormant customers to start using the subscriptions.

Also Read: An Ultimate Guide To Managing Your SaaS Product Experience And Its Impact On Overall Subscription Business Growth

Buyer Persona

According to HubSpot, using buyer persons is 2X effective and yield higher ROI in comparison to non-targeted email and behavioural advertisement. If you are thinking about how you can create buyer personas, then let team SubscriptionFlow help you. There are software that you can use for this purpose.

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Let’s take an example of a Customer who is 15 to 20 years of age, female, enrolled in art school in Europe. Same for the opposite gender. Since you have a clear picture of who your customers are, now you can use this knowledge to create a comprehensive marketing and sale pitch, along with behavioural advertisements. Along with this, it helps businesses to identify whether they can utilize Subscription Business Model or not.

Also Read: 5 Most Graving Challenges And Their Solutions To Retain Gen Z Subscribers

How Recurring Customer Segmentation Can Help Subscription Businesses

The most difficult thing for a subscription business is to identify the need and market the product in a relatable way. But to achieve this target, the marketers have to go through a lengthy process, that starts with research, followed by studying buyers’ behaviour, understanding subscribers’ consumption patterns, and continues until the efforts yield higher ROI. When you are done with the research, you need to formulate a buyer’s persona which defines an ideal customer that can help you grow revenue and your business both. Segmentation of recurring customers can help your subscription business in the following ways:

First, marketers can craft specific messages that contain personalized coupons, special offers, and discounts that trigger voluntary responses to upgrade the package and modify the subscription plan. Moreover, the behavioural campaigns and customization of the customer portal also serve as a reliable source for customer experience and enhance engagement.
Since marketers are devising content that is highly customized and know whom they are targeting, thus, they won’t have to invest efforts in crafting content for every subscriber individually e.g. discount plans, add-ons, and other marketing material.
Lastly, personas creation not only save customer representative and business managers can save time in manual sorting, and deciding which content to populate to which subscriber list. But also helps with marketing automation. This way the subscription business can witness a significant reduction in churn rate when the customers are getting what they need, at the right time and at the right moment.

Conclusion

The crux of everything we have just stated is directed towards reducing efforts on the account of subscription companies and yielding a loyal customer base. But, it is not possible until you segment your subscriber. In the case of Dorment subscribers, the company can utilize the data of active subscribers such as usage behaviours, interaction, and retention, to devise a strategy. Moreover, the Subscription Software data and personas also answer the questions like why subscribers are dormant, what caused the voluntary and involuntary churn, and what system and campaign modification can yield higher results. For subscription management and billing automation, you can utilize SubscriptionFlow.