Case Study: Strategic Customer Segmentation to Maximize Revenue and Profitability - Telecom

Objective

The goal of this initiative was to ensure the right segmentation of 40,000 existing customer accounts for optimal account coverage by Account Management and effective campaign management by the Customer Marketing team.

The segmentation was aimed at:

1. Proper Targeting and Coverage of Decision Makers – Ensuring that the most influential stakeholders within each account were reached, increasing the chances of successful marketing and selling.

2. Maximizing Upsell and Add-on Revenue – Identifying high-potential accounts for additional sales opportunities.

3. Aligning Resources to Ensure Profitability – Assigning the right account managers with specialized skills to each customer segment (e.g., Enterprise versus SMB.)

4. Minimizing Risk of Customer Churn – Preventing competitors from acquiring valuable customers by improving engagement, response and loyalty.

   
   

Key Inputs into Segmentation

The segmentation process started with a set of essential inputs that were used to evaluate each account's potential and resource requirements:

• Account-Level Revenue Opportunity

• ​Account-Level Contacts

• Geography

• ​Type of Customer Decision Making

• ​Involvement of Channel Partners

• ​Customer Satisfaction (CSAT)

• ​Cost to Serve​

Solution

To address these inputs, we employed a Customer Data Attribution and Tiered approach to account coverage and engagement. The strategy involved:

1. Customer Data Attribution​

2. Segmentation of Customer Base by Financial Opportunity

   • High Growth Potential: These accounts were tiered for aggressive upsell and add-on sales strategies (Strategic down to VSB.)

   • Maintenance and Retention: Accounts with stable revenue but low upsell potential were targeted for retention and optimized service.

   • Churn Risk: Accounts showing low satisfaction and/or high cost to serve were flagged for immediate intervention to prevent defection.

3. Assignment of Different Contact Strategies - Once accounts were segmented, a engagement strategy was assigned to each segment:

   • High-Touch Strategy for high-value accounts required specialized, dedicated account managers with advanced selling skills and deep product knowledge.

   • Cost-Efficient Strategy for lower-margin accounts relied on digital tools, automation, and assignment to a group of account managers to maintain profitability.

   • Channel Partner Collaboration was deployed for accounts where channel partners were involved in influencing or facilitating the decision-making process. Coordinated efforts ensured that all parties were aligned in their approach to servicing and selling to the customer.

4. Defining and Aligning Account Managers by Role/ Contact Strategy - All of the account managers were reorganized into different roles, based on their demonstrated skill sets. The individual account managers were assigned to accounts based on the specific needs of each segment. For high-potential accounts, account managers with expertise in solution selling, executive presence and complex negotiation skills were assigned, while more transactional accounts were handled by account managers with skills in operational efficiency and maintaining customer satisfaction at scale.

   
   

Results

The strategic segmentation delivered several tangible results:

• Improved Targeting of Decision Makers - With clear attribution of customer data and clear assignments, the right stakeholders were targeted consistently, improving the effectiveness of sales outreach and increasing the win rate on upsell and cross-sell opportunities.

• Maximized Revenue Growth - By focusing resources on accounts with the highest financial opportunity, the company achieved an 50% increase in upsell and add-on revenue across the entire customer base in the first 12 months of implementation.

• Resource Alignment for Profitability - The segmentation helped allocate account managers and support teams more effectively, ensuring that high-potential accounts received premium resources while maintaining profitability in lower-margin segments.

• Reduced Customer Churn - Churn risk was minimized through proactive engagement with at-risk accounts. The company saw a 10% reduction in customer churn, safeguarding key accounts from competitive threats.

• Higher Account Manager Morale - Not only were customers receiving consistent sales and support, with the differing compensation and skill bands, a career path was established for longer-term employee engagement.

Conclusion

By leveraging customer data to segment all its accounts based on financial opportunity, decision-making complexity, and service requirements, the company was able to align its resources strategically. The implementation of tailored contact strategies, coupled with a focus on customer satisfaction and risk mitigation, resulted in significant revenue growth, improved profitability, and reduced churn.