For the last two days I’ve had the opportunity to spend time with entrepreneurs from around the world through Endeavor. In our group, we had entrepreneurs from Venezuela, Columbia, Greece, Argentina, and Saudi Arabia all sharing stories of challenge and opportunity. As part of the program, we spent time talking through their customers using a simple naming convention:
Now, these names aren’t meant to degrade or belittle certain customers. Rather, they’re for the entrepreneur to understand what is, and what isn’t, working within segments of the business.
For each segment, here are some common metrics:
- Cost of customer acquisition
- Average revenue
- Renewal rate
- Lifetime value
Only, by looking deeper, new insights emerge.
Instead of investing resources to grow all segments, invest in the most important segments.
Segments are divided based on a variety of characteristics including:
- Number of employees
- Potential usage (users, locations, etc.)
Initially, as the business is growing, it’s best to keep things simple. Once some level of scale is reached — say 100+ customers — it’s good to segment the customers and understand the business in a more fine-grained way.
What else? What are some more ideas on segmenting customers?