Asaf Darash is the founder and CEO of Regpack, an online payment management platform. He holds a Ph.D. in New Media.
When it comes to client relationships, a one-size-fits-all approach falls short. In my experience, treating all clients uniformly is an ineffective practice that can hamper resource allocation and ultimately impact the bottom line. Recognizing the intrinsic diversity and potential among clients, businesses are increasingly turning to advanced strategies to segment clients effectively.
One such strategy that business-to-business companies can embrace revolves around the concept of tiered segmentation. By allocating resources and attention based on client value, companies can optimize their operations and foster growth.
The Tier Structure And Management: Tailoring Treatment To Value
At the heart of this client segmentation strategy is the tier structure, which classifies clients based on their contribution to the company’s revenue. In other words, tiers are determined by the income a client generates for the company, and each client is assigned a tier corresponding to their revenue impact.
There are a number of factors that can be taken into consideration when determining the tier of a client. The first, most obvious one, is the revenue the client generates. When a new client is onboarded, they should be assigned to a tier according to the revenue you expect them to generate. Clients who have a track record should also be assigned according to their historical performance. It is important to consider all income sources when considering client-generated revenue. Other factors that come into play include possible client marketing collaboration activities, SEO opportunities, client logo strength, possible growth potential and so forth. The main idea is to attribute the factors that are important to your company to the potential benefits your company will get from the client.
In general, the tier given to the client should represent the overall value the client creates for the company. Most clients will do that through the monetary income they create. But there might be specific clients that, by adding links to your platform on their sites, for example, will be worth so much in SEO they should be bumped up a tier. (After all, getting good SEO has huge monetary value.)
Once the tiers are determined, you’re able to set clear expectations when it comes to client needs. The loudest or neediest client isn’t necessarily in need of the majority of your attention; rather, your focus should be on tangible contributions, whether it is direct income or other partnership contributions that benefit your company. Give your clients in higher tiers enhanced treatment and attention, as this will ensure their needs are met promptly. Not only that, but you should also be proactively reaching out to high-tier clients to make sure they are using your company’s services to their fullest. This proactive approach can help prevent the escalation of minor concerns into major issues.
Client-tier segmentation doesn’t stop at the initial assignment, though. Dynamic tier management that constantly adapts to change is crucial, which is why a cornerstone of this strategy is the quarterly or biannual review of client tiers. This process involves evaluating three critical factors: the client’s current tier, their initial onboarding tier and the highest tier they have achieved throughout their client journey. This review serves as a strategic compass that guides resource allocation and highlights where attention is needed most.
Operational Benefits And Problem Detection
Embracing tiered segmentation yields operational benefits. Operations teams can streamline their efforts by focusing on high-value clients, which can help their businesses run smoothly. Immediate attention given to Tier 1 and 2 clients will help reinforce their loyalty and satisfaction. This efficient distribution of resources leads to optimal client interactions.
Furthermore, tiered segmentation can act as an early-warning system. If a Tier 1 client slips to a lower tier, immediate action should be taken to understand the reasons behind the decline. Is it related to changes in their industry dissatisfaction with the product? Are they experiencing service-related issues? This introspection fosters a culture of continuous improvement and enables companies to address concerns before they escalate.
Capitalizing On Growth And Problem Solving
The tiered approach is a two-way street. While it guides resource allocation, it also serves as a tool to identify growth potential. A sudden rise in a client’s tier signifies growth, and the company can proactively assist them in their expansion efforts. This not only strengthens the client’s loyalty but also can bolster the business’s reputation as a proactive partner.
In a world where personalized experiences reign supreme, client segmentation strategies like tiered approaches prove invaluable. The implementation of this concept underscores the need to treat clients as individuals rather than a homogeneous group. By aligning resource allocation with revenue generation, monitoring clients’ trajectories and addressing concerns in a timely manner, businesses can cultivate stronger client relationships, stimulate growth and ensure long-term success.
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