Can You Love Every Customer the Same?
A frequent byproduct of growth is that your customer base becomes more diverse. In many cases, you start signing up much larger customers. That’s good, right? Yes and no.
I’ve either built or inherited Customer Success teams that were attempting to service 100% of their customer base indiscriminately, even as the customer base had become more diverse. We had low revenue customers receiving the same time and attention as the largest clients. Smaller clients sucking up time and resource through escalations that would inevitably trickle into the engineering team through product enhancements, emergency bug fixes, or some other act of heroism from another team. My Customer Success Managers were dashing from account to account in a vain attempt to keep everyone happy at the same time.
As a result, the large customers or more strategic accounts were often not receiving the level of support and service they needed due to the distraction of smaller clients. This situation is beyond stressful and costly. Not only does it cause stress across multiple teams in your company but it may cost you in terms of upsell opportunities, and even churn.
If you wanted to service each and every one of your clients equally, here’s what you’d need to be successful:
- More headcount (a lot more)
- More budget
- More tooling
- More automation
- More access to engineering resources
- More command over sprints and even roadmap
- Control over the technical support team (if you don’t already have it)
- Direct access to Consultants / Professional Services with carte blanche to approve $0 work
That’s a lot…and it’s ridiculously expensive. The likelihood of getting everything you need is slim to none.
Not all customers are created equally – nor should they be treated as such. I first learned of tiering and segmentation and strategic service delivery definition from a previous company. That learning was a good foundation but still rudimentary. If I’m going to retain all of my customers, I need to cover my costs, do more with less, and protect my team while keeping ALL of my customers happy.
A customer success methodology to help you stay sane
Over time, I iterated and refined my approach into a three-step process to solve the problem of how to service each customer tier appropriately. This methodology will help you and your team to become more focused around the service you provide to each of your customers (while preserving your sanity!). Here’s how to do it:
1. Define Your Customer Tiers
Who are your most valuable customers? This is a critical, and sometimes controversial, set of decisions to make inside your company. Remember that “best customers” could be the ones who produce the most revenue, or those with greatest expansion opportunity, or those that produce the best NPS® (Net Promoter Scores), or even a combination. Regardless, you need to decide the criteria for your whole company to use.
2. Who Gets Serviced and How?
The next step is to define your service strategy. Document all of the services that your Customer Success team could/would be providing to any given customer. Then, build a matrix that decides each service that is delivered to each Tier. For example, maybe only Tier 1 customers get a named Customer Success Manager.
This isn’t easy. But don’t lose sight of the objective to ensure you provide the right service to each customer Tier according to their value to your business.
3. Don’t Forget The Long Tail
By this stage, you’ve probably realized that you have a tier of customers who won’t be serviced by your people as much, if at all. Yet these customers are valuable, too. So what approaches can ensure these customers get the resources and attention they need to be successful?
A scalable, programmatic approach is needed. For example, ensure that you have the right content and systems in place to give them adequate support. You’ll need a well-populated knowledge base, training materials, and other self-guided support and/or educational materials to make this Tier successful.
Get the Tiering & Segmenting eBook
These three steps are the best course of action for defining and delivering the right services to the right customers (and at the right time, I might add). I recently released an eBook on this topic that takes a deep dive into each of these three topics that will give you specifics on:
- How to tier & segment your customer-base
- How to define your service strategy
- Define service delivery for each tier
- How to define your Long Tail
- How to service the Long Tail
- Supplemental worksheet to get you started
The eBook is available here.
