Digital CS cost for very low value customers

ianwelles · 2023-03-01T09:59:12+00:00

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I was asked yesterday how to extract value, and ensure profitability, from a high number of very low value customers.

The scenario is that there are 10,000 customers, with that number growing fast, paying on average a one-time £2,000 fee and a few hundred per year for additional services. There is currently no CS function at all, but it is recognised by leadership that this is essential in order to grow these customers by making them successful.

I went straight to Digital CS:

Onboarding email sequences
Self-service training
Recurring community onboarding webinars
Office hours
Community
Pooled CSMs
Ad-hoc real-time meetings based on customer request or usage triggers
In app and emailed usage reports
Triggered upsell email campaigns

Where I got a bit challenged is how do we determine the cost of this Digital model and demonstrate it is profitable? There are a lot of variables to consider. I feel like I should be looking at how we demonstrate marketing campaign effectiveness or Support team metrics. Of course, we would look at renewals and upsells.

What approaches have you all seen work for demonstrating the value o a Digital CS program?

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Comments

Brian O'Keeffe

https://gaingrowretain.com/discussion/comment/11020#Comment_11020

I understand. Of course we assign via ARR and know that high ARR = VIP. But it's a road to unraveling the value of Tech Touch if you socialize this internally. Eventually it is socialized to customers. (I heard a CSM introduce me and my team as the ones who deal with our low value customers. Yes, actually told a customer that and was so used to hearing it did not even blink.)

The problem I have had is "low value" became: did not matter, team with the least skill (THIS DROVE ME NUTS), digital as the entry level team (new management came in and saw it that way, based on its internal branding from those that never believed it in anyway) and a larger sense of digital being "a bunch of emails" (still fighting this one every day!) and a general sense that one to one CSM is better and the "right" way (as the only option well known to all) to do CSM.

I always stress that book of business digital covers. Those numbers really help make the case. Or % of customer base covered and show exactly how digital is the cost efficient way to do more with a lot less and have results that equal, even EXCEED all others. Everyone will stand up and take notice when that happens. In the current economy, that bell rings increasingly louder.

ianwelles

I wanted to add that when you socialize "low value customers" your smaller customers and your entire team will get the message: they don't matter, they are less than, they deserve less.

This is a very good point, thank you for calling it out @Brian O'Keeffe. I used the term here to highlight that these customers do not individually generate large subscription revenue that would financially support much real-time interaction. The segment is critical to the company's success.

Brian O'Keeffe

I wanted to add that when you socialize "low value customers" your smaller customers and your entire team will get the message: they don't matter, they are less than, they deserve less.

I strongly advise not doing that and avoid devaluing them like that. All customers deserve a great experience and amazing things can come from your smallest customers. I have more advocates from my smallest customers than any other sector and they are amazing growth engines. NEVER TREAT ANY CUSTOMER LIKE THEY ARE LESS THAN. It will reverberate and bite you in the behind.

Brian O'Keeffe

https://gaingrowretain.com/discussion/comment/11014#Comment_11014

Excellent point about no reply: it clarifies lotsa luck, you're on your own. I stress every day all engagement has value, even those that make you grit your teeth in anticipation. Some of the best outcomes come from the most challenging initial interactions.

I also advise think about your tone and salutation and signature. Never sign "The Team." Always personalize the greeting. "Hey, what's up?" NOOOOOOO!! Always create a path for responses and for ownership through resolution for those responses. (Digital does not mean never interact with a human!) Think of what might work besides email, which gets tiresome. Community? Texting? In application? Other? Find those opportunities to connect and engage.

ianwelles

Renewal and growth quarter by quarter and year by year means we are a bit too late, but they are meaningful metrics.

I like the point about a response workflow. A "noreply@" email address is the opposite of customer focused. Absolutely, if you are building a digital CS programme, you must reply to inbound emails and requests from customers. The most engaged customer (for good or bad) is the one contacting you. Make sure you engage them in return.

Brian O'Keeffe

I have seen measurement at a high level where renewal and growth quarter by quarter and year by year are measured. Enterprise, MidMarket, and Digital all went head to head.

A key with digital is how is it delivered? Rote, robotic, less than clear calls to action? Expect failure.

How do you manage the workflow for responses? None? An afterthought, via support, with clarity that this is a low value customer to spend as little time on as possible that permeates throughout the org? Expect failure.

Yes, I have seen it rolled out that way and then "I told you so" by the management team that implemented it and said all along it would bomb.

If your messaging is warm, with clear calls to action, a response workflow that is clear, with prompt responses and ownership until resolution and digital is seen as every bit as valuable as every other CS sector, you will succeed. You may even see that sector exceed all others.

ltorno

I think the big thing is the force multiplier, and you can reach more customers with the information they need at the time they want. Being able to show stuff like open rates, click rates, and response rates from Marketing campaigns or other automated emails you are currently using would be the start.

You should expect better rates from the Digital CSM campaign because you are hitting them with more pertinent information based on what they are doing. So as an example, we expect a 5% response rate on a general marketing campaign, so we are targeting a 10% response rate on our Digital CSM campaigns for this year (we just started) because if we say, "Hey, Mr. Customer, we saw you just added this, do you know we have that to help you" we feel like we should get a few more bites, vs. a generalized marketing flyer.