Customer segmentation is difficult. Some now obvious things apply to many people, such as sending emails or scheduling calendar invites. Some things apply to smaller groups, say bookkeeping for small businesses. As you dive deeper, segmenting users by relatively obvious dimensions such as business vertical, geography, regulatory framework and other large filtering only goes so far. What methods can you apply to dive deeper? Transcript: Welcome back to the 10 Minute Product Podcast! Today’s episode is all about customer segmentation. Well, it helps identify groups of customers with shared behaviors or needs. It allows you to sell software repeatedly rather than as a one-off service. With segmentation, you can build for a broader audience, making sales more predictable and scalable. Exactly. And it’s not just about selling—it’s also about upselling and feature adoption. Knowing your best customers and understanding their behavior is key to driving growth. So, how do you go about it? First, your organization must have honest discussions, just like prioritization or hiring. It may expose gaps in your understanding—like realizing you don’t know exactly why people bought your software. But that’s valuable insight. Then, it depends on whether you're B2C or B2B. Different frameworks work for different cases. The key is exploring what fits your business best. Agreed. Gaining insights into customer behavior is eye-opening for both sales and product teams. Segmentation helps define what a “good” customer looks like—someone who spends money, adopts features, upgrades, or refers others. The goal is to classify customers: High-value customers who engage deeply with your product A middle segment with potential for growth Low-engagement customers requiring re-engagement strategies There are also external segmentation factors, like regulatory constraints or infrastructure. For instance, launching in Germany means supporting specific payment systems. So, what types of segmentation exist? You can segment by country, language, industry, or product use cases. But the key question is: Who is your ideal customer? A great example is LinkedIn. Free users get minimal attention compared to recruiters, who are paying customers. This strategic segmentation drives LinkedIn’s product decisions. Do you have any examples? Yes! At Google, we studied the accounting industry’s advertising behavior. Dutch accountants monetized well, but Nordic accountants didn’t. The reason? Nordic accountants lacked websites. We solved this by helping them establish a digital presence. This created a new customer segment rather than just targeting existing ones. That’s clever—you didn’t just segment customers, you created them! Another case: I worked on an ad platform where industries had different advertising needs. Traditional segmentation didn’t work, so we applied the “Jobs to Be Done” framework. Instead of grouping by industry, we grouped by shared advertising goals. This approach was far more effective. Great point. Segmentation isn’t just for product teams—it impacts sales, customer success, and marketing. Understanding customer pain points enables more relevant sales pitches and higher conversions. Yet, companies often resist segmentation. Reasons include lack of data, uncertainty about where to start, or time constraints. Have you encountered this? Absolutely. The key is to approach it in stages. Start small, find quick wins, and demonstrate impact. Once you show results, teams will buy in. Agreed. Just get started. Don’t overanalyze—start with available data. Sales and customer success teams interact with customers daily. Talk to them, join calls, and gather insights. Strong advice. Well, that wraps up our episode on customer segmentation! If you found this valuable, please like, review, and share your thoughts. Got any product or growth blockers? Let us know, and we might cover them in a future episode. Thanks for listening, and see you next time!
