Tiers

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GIl EIGES
GIl EIGES Member Posts: 1 Navigator
edited August 2020 in Metrics & Analytics
Happy Monday!

For those of you who are on the B2B  with a focus on Enterprise. have you looked into breaking your customer base into Tiers in order to optimize coverage, service levels, growth etc.?

Any best practices you could suggest?

Thanks!
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  • Russell Bourne
    Russell Bourne Member Posts: 61 Expert
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    edited August 2020
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    @GIl EIGES, if you're a young company and you have a small number of CSMs, it's generally best to divide the customer base evenly between them and have all CSMs be generalists.  Besides the easy load-balancing and coverage, your CSMs get a chance to learn multiple disciplines and potentially excel toward one.  That's good for their career development (and therefore your employee morale and retention), and an easier scale-up for you when it's time to grow and promote.

    After that, segmentation is really a matter of what's important to you:
    • If your service absolutely depends on face-to-face interactions (post-pandemic), segment by physical geography, especially if your team is field-based.
    • If your service is international and depends on intimate knowledge of each country's laws, segment by country.
    • If your service differs based on a customer's vertical or compliance requirements, segment by that.

  • Justin Chappell
    Justin Chappell Member Posts: 2 Navigator
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    edited August 2020
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    @GIl EIGES  - It really depends on the size of you account base and what you are trying to achieve.  I have used built our a few segmentation models of the years at a variety of companies and it always starts with making sure we are offering the right customer with the right level of support (support is overall all support and is not specific to tech support).  By reducing the overall ratios we are able to assure the right cadence is created and that we have the right activities set up to drive the desired outcome of that particular tier.  Example: Tier1 Cloud is designated as Cloud or Transformation = All customers have a path for moving from on prem to the cloud over x years.  Tier 1 Strategic - IS all about expansion opps.  Tier 2 is focused on nurturing.  Tier 3 is nurturing and retaining.  As you move up in tier ratios are lowered and more human engagement and as you move down in tier higher ratios and more of a tech touch or automated engagement.

    I would try to assure you are basing it off of more than just revenue as well.  The key is to understand what the goal of that group of customers is to assure right resources.  For example I have used Revenue as a % but also include the complexity of their solution (how many and what products do they have), what is the customers reputation in their space (even a smaller customer could have a big voice and be a leader in how they use their tech stack).  All criteria having a weight that helps in placing them.  I would also make sure you still "eye ball " it cause the numbers dont always tell the full story of your customers. 

    And final thing I would say as a best practice, dont change the model once you have confidence in it.  I only re-tier customers 1x per year and out of over 10K customers I seen maybe 10 or 20 change and most of the time you will already know who those ones are.
  • David Ellin
    David Ellin Member Posts: 170 Expert
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    edited August 2020
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    @GIl EIGES, I've done this a few ways in the past and suggest starting with the end in mind. What do you want to accomplish? Once you know that, you can proceed to look at segmentation factors - size (enterprise, SMB), ARR or MRR, geography, product, high touch/mid-touch/low touch), customer complexity (meaning their internal team structure), etc.

    I've found it beneficial to try and create parody (even workloads) between CSMs where possible. At one company, I had a very large team (50+) and each CSM team was led by as CSD (Director). The Director's teams weren't always the same size but the CSMs typically had similar ARR.

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