Create tiers of customer

Bayron Toruno S. · 2022-06-14T14:59:18+00:00

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Hello everyone,

I want to highlight how much I have learned since day 1 in GGR.

Could we brainstorm a little about "how to create tiers of customers? I'm going to start a new CS process and I want to start by creating tiers, which is important to have, any tips or best practices? We are going to create the tiers based on the number of users a customer has within our apps/products.

Thanks in Advance!😀

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Ed Powers

Hi @Bayron Toruno S.--I do a lot of work with clients tiering their Customer Success operations for greater effectiveness and scale, and ultimately it boils down to Pareto Principle, economics and practicality.

At some point, both Sales and Customer Success begin to realize that customers aren't all the same--a small number account for the vast majority of revenue and revenue growth. The strategy of "spreading the peanut butter" eventually gives way to making ROI and scaling decisions about where to invest human vs. automated assets. On the CS side, the limitations of asking CSMs to manage 100+ accounts often precipitates change, too.

The devil, however, is in the details. A key sticking point is the complexity of the product, complexity of the accounts and their journeys, and to what extent the entire organization is prepared to change what it does in products, services, and processes to grow at scale.

Jan Young

Hi @Bayron Toruno S. just seeing this post now. How has it been going with your tiers/ segments?

Generally, I look to do a combination of Customer Outcomes (aka Goals/ Purchase Reason) and ARR/brand for Customer Base Segmentation. That way you can consider both what the customer wants to achieve and how they are using your product along with the resources your company can afford to put towards that "bucket" of customers. The Goals are the basis of the Customer Journey for that bucket of customers, and the ARR determines how you want to deliver that customer journey-- high touch or digital for example. (Sometimes there can be different levels of ARR within the Customer Base Segment, so they may need the same customer journey, but you can deliver it to some via High Touch, and to others digitally.)

Bayron Toruno S.

https://gaingrowretain.com/discussion/comment/10132#Comment_10132

Thank you a lot. 😀

Allison Mortens

Hi Bayron! Great to hear that you're getting valuable information out of GGR! Building off of @Amanda Flurry's recommendations on segmentation. If you're starting from scratch and looking at ways to segment your customer base, I recommend looking at some of the following factors:

Traits like Industry, Location, or Customer Size
Needs like specific outcomes or tools or products used
Value like ARR, adoption and usage levels, or product attachment rates

Allison

Amanda Flurry

Hi @Bayron Toruno S. ,

It sounds like you already know how you want to create the tiers, which is great. What new CS process are you planning to start? My recommendations on tiers may change based on the process. If you're looking to revamp a process around renewals, for instance, segmentation based on usage behavior may make sense. You could identify customers that are at great risk of non-renewal due to low usage earlier in the process, so you can cultivate that usage long before renewal time.