Skip to main content

There’s one big reason why your teeth sparkle and taste so minty fresh after you brush them in the morning.

Can you guess what it is?

Exactly right- customer segmentation!

Okay, maybe that isn’t the answer you were thinking about. But we guarantee you it’s the right one. In fact, the modern toothpaste story is the perfect way to talk about segmentation and why it’s so icy and exhilarating.

Back in the late 19th century, toothpaste was a luxury item targeted at the well-off, who could afford this “novelty” for oral hygiene. As time went on, and it become more affordable, everyone started buying it.

The problem was that not everyone had the same mouth. And it was horrible – after all, they put soap in it!

But companies started realising there were different customer segments with varying needs.

Take fluoride toothpaste as an example. Though it was technically available after 1914, once Crest introduced it in 1956, a new segment was unveiled: customers interested in cavity prevention.

Then companies realised people might want different tastes in their toothpaste, so they expanded it to spearmint. Peppermint. Cinnamon. Black liquorice. And a million others.

Then, another segment – those who wanted white teeth. And another one – people who wanted to manage tooth sensitivity. Other segments popped up- children, dentures, people who like sparkles, people with too much tartar, and people with gum disease.

Now consumers can get the kind of toothpaste they want- even something super specific like purple sparkly cupcake-tasting toothpaste that whitens your teeth.

All that choice is much better than soap-flavoured toothpaste.

And it’s the same principle for pricing and packaging segmentation. The more clear the segments, the better customised the pricing and packaging. Whether it’s offering different subscription plans, bundling products or services, or providing discounts, customization is the key.

Just like purple cupcake flavor toothpaste won’t work for someone with raging halitosis, one subscription offering might not meet every customer’s unique needs.

But by offering varied plans and pricing models, you can ensure every customer feels valued and understood, thereby increasing revenue and customer satisfaction.

Best Practices

So, how can we best customize pricing and packaging? A few best practices include:

1. Regular Reviews

Markets change. People change. And so do their preferences and situation. Keep your strategies fresh with regular reviews.

2. Transparency

Customers value honesty. Be transparent about what your packages include and their cost. No one likes unpleasant surprises, and once trust is gone, it’s really hard to get it back.

3. Flexible Subscription Plans

Rigidity can be the death of a business in an industry that thrives on innovation. Subscription plans need to be as flexible as the products they offer because when you cater to each customer’s needs, they’ll appreciate the personal touch.

4.Value-Added Services

You know how frustrating it is when a company you’ve bought from forever suddenly rewards its new customers. Do the opposite. Reward customers who stay. Value-added services can set you apart, delight customers, and build loyalty.

The Foundation You’re Looking For

So what is it that fuels the segmentation that enables the best practices of customised pricing and packaging?

Good data analysis gives the segments you need. By tracking customer behavior and preferences, you’ll see the patterns, understand needs, and then forecast trends.

Without it, you’re flying blind and might make all kinds of mistakes – like creating a premium plan that nobody wants. Or launching a product no one needs.

In the subscription world, you need to know who your customers are, what they need, and how much they’re willing to shell out for it.

It will mix customer buying behaviour with KPIs like Monthly Recurring Revenue, Customer Acquisition Cost, and Customer Lifetime Value. You’ll get a continuous evaluation about how well your strategies are working, and if not, they signal it’s time for a change.

In other words, you’ll know which packages work for which people so that you can constantly adjust.

Then your data analysis crunches all these numbers together and helps categorise everything into your segments. And then you learn more about the people who are your customers.

Are they the ‘Just-the-Basics’ type, or the ‘All-in-Premium’ people? Have some lost money recently, so they’re in the ’Cost-Sensitive’ segment? Got some tech heads who are ‘Feature-Hungry’?

Here’s an exercise for you. Look at the emails or mailings you get from places where you regularly shop. Do you reckon the communication is generic, or do you think they’ve got you down to a tee? Sometimes, brands are overt about it, with phrasing like ‘as someone who likes a bargain …’. These people have done the data analysis legwork and, it’s no surprise that they’re much more successful than those that haven’t.

Data analysis takes the pain out of guesswork and lets you know how many people fall into which categories.

But where to find the data analysis capabilities you need?

Enter LISA, Bluefort’s Licence and Subscription Automation product suite.

This tool can streamline subscription management and optimize your pricing and packaging strategies. It helps you test different pricing strategies, track customer behavior, and automate operations.

With LISA, you can efficiently maneuver through the maze of subscription management, ensuring no byte of data or customer segment is left behind.

Remember, the essence of the toothpaste story is success and growth coming down to recognizing and addressing the needs of different customer segments.

In the B2B subscription world, this translates into customizing pricing and packaging. By doing so, you’re not just selling a product or service; you’re delivering value and satisfaction.

As you go about your day, let that minty freshness remind you of the power of customer segmentation and understanding them.

So, go forth and segment, customize, and conquer. Because your customers deserve nothing less. And neither do you.

Discover what YOU can achieve with our solutions

Book Demo

Take your business to the next level. Let us show you how.

Get in Touch with Us

Let’s Chat Further