Customer Segmentation

Vertical Horizon: Using Customer Segmentation Research to Fuel Hyper-focused Growth

Customer segmentation is essential for any company with a lot of customers in a variety of different market segments. After all, while it may seem like an enviable position, trying to be everything to every customer can inhibit efficient growth. Failing to focus on one particular customer segment can lead to market confusion, misappropriated resources, and a watered down product that fails to resonate with a company’s most important customers.

These were among the challenges facing Mashery, a San Francisco-based API management technology and services provider, and Skytap, a Seattle-based provider of cloud automation. Fortunately, OpenView was able to help by conducting a customer segmentation project for Mashery and a voice of the customer initiative for Skytap.

“OpenView gave us the objective market and customer analysis we needed with the personal touch of a firm that legitimately cares about our future success,” explained Oren Michels, Mashery’s CEO. “They delivered recommendations and meaningful data that have influenced almost every component of our organization.”

For Mashery, the problem wasn’t growth. It was customer segmentation. Prior to OpenView’s 2011 investment, the company had customers from an array of industries, including healthcare, IT, retail, and travel, among others. Working with OpenView, Mashery was able to identify the qualities that made up its “best” customers.

After developing a hypothesis, collecting and analyzing an array of data, and ranking potential segments, the initiative ultimately yielded a comprehensive report. The findings included a ranking of Mashery’s best customers, the top three customer segments that would all ow the business to sign more valuable customers faster, and the customer segments it would find least rewarding.

“As a result of our work with OpenView, we’ve made adjustments in our messaging product backlog, sales process, and buyer personas that will allow us to better target, sell to, and manage our most lucrative opportunities, said Skytap CEO Scott Roza. “There’s immense value in that.”

Skytap needed an intimate understanding of its customer needs and requirements to best serve its customers. As a result, one of its first collaborative projects with OpenView was a voice of the customer initiative.

The objective of the project was to better understand how Skytap’s customers were using its software. Skytap was also looking for feedback that might influence the business’s sales process, Web content, product features, and value proposition statements. The result was objective customer feedback that allowed Skytap to make a variety of strategic adjustments.

For more on how OpenView helped Mashery and Skytap with their customer segmentation and voice of the customer efforts, download the full case study.