Customers. We all have them, whether our products are in retail, commercial, B2B, internal or public sector. Traditionally we’re told to always treat them as if they’re right, and to do everything to make their experience with our product second to none.
In my time being coached by the guys at Action Couch I learnt about the different value customers can give to your business. By value, we mean how much return on investment do we get maintaining that customer. Let’s break down our customer base into classes A to D.
These guys are a pain. They constantly complain, putting strain on our service / support teams. We all know the type – and we also know these guys take up the majority of the time of our support teams / services.
We never hear from them. They’re good as gold, but they don’t do anything for us – other than the fees / subscriptions, we get no return on our investment with them. However, since they don’t call or interact with us they cost us very little to maintain. Most customers are class C.
These customers communicate with us via our support services from time to time, and we expend some effort to maintain their custom. They’re satisfied with the product, but they don’t talk to others about it – they aren’t on fire for us. Note these customers present the biggest opportunity to change to advocates, since we interact with them via our service desk / support.
Your advocates. They sell your product for you – telling anyone who’ll listen about how great your product is. They stick up for you, post on your community forums and love getting involved. They positively impact your teams moral, reduce your operational costs and actively generate new sales. We can probably all think on a product we love as an advocate – if one of our friends asks for a recommendation, we’re the first to spend 5 minutes explaining why we think it’s awesome and they absolutely should use it.
I can’t over-sell how important Class A customers are. No one has more influence over a sale decision than a trusted friend; the best, most expensive marketing campaign cannot even come close. Sure they can only influence their friends, but it can become exponential if new customers can be shifted to Class A as soon as possible, as efficiently as possible.
Thinning the herd
As a business it seems counter intuitive to remove customers. But that’s exactly what you need to do on your Class D customers – they’re costing you money, demoralising your team and creating bad reputation. The trick is doing this without effecting your reputation or giving them more ammunition. Make sure your T&C’s allow you to terminate customers easily, have a good, fair refund process in place and make sure they leave with a positive experience (a gift of some sort?).
Love your Rock Stars
We all want advocates, or we absolutely should. Creating them and maintaining them as crazy zealots can itself be time consuming, but it needn’t be. I’ll go into techniques you can use to transform your customers to Class A – revenue earning, moral boosting super sellers in a series of blog posts.
Of course this type of categorisation needs to be taken with a big pinch of salt. Though boxes help us understand the world quickly, people seldom fit in boxes – and if they do they have a habit of jumping out of them. Just remember an Advocate can quickly become your worst customer if you break your trust contract with them. More on that another time.
Spend time knowing your customer base. Take steps to promote customers from D to A, or be brave and drop those expensive D customers.
You’ll see the benefits of increased revenue, a better motivated team and greater operational efficiency.