Do not fire “bad” clients, hire a psychiatrist

Original author: Jason Lemkin
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There are many business tips on the Internet that are really logical, but not always applicable for the SaaS market. The problem is that entrepreneurs also share bad advice with a bang, without testing them properly.

“Fire the customers who are not suitable for you. Dismiss the "bad" customers "- advice that you often hear, and with which I do not agree with 93% . We are talking about customers who spend too much resources in comparison with the income from them. I think, at least for the SaaS service, this is one of the worst tips.

In the process of formation, each company is faced with similar problems. At a certain point, when you, for example, are recruiting a couple of hundred customers, the database begins to segment. Some clients (say, 10%) constantly complain. Another 10% use a version or module of a product that you no longer want to spend resources on. Or even simpler: the weakest in terms of profitability 10% of your customer base takes too much time. One tiny customer “sucks energy” out of the entire support service, although it brings absolutely nothing.

I understand that very well. In my past company, the largest consumers of support team resources were free users. The second were customers who paid $ 15 per month. But what about those who paid more than $ 100,000 a year? They had a lot of requests in terms of architecture and initial setup, but from the point of view of current issues they are the least demanding.

Such customers pay 100 times more, and take the same or even less support service resources. Even if you include the costs of marketing and sales to attract them, they are still more profitable for small customers.

So fire the small, insignificant and annoying customers, you say?

I suggest looking at the situation differently:

Firstly, you will be shocked at how weakly the complaints correlate with the re-payment of services and customer satisfaction . Users who are going to refuse the services of the service because they are disappointed do not complain. They do not whine. They just quietly leave you and go to competitors. Sometimes even without a special reason.

Complaints, on the contrary, are often a sign of deep attachment to a product, which is diluted with discontent. There are no perfect products. But these complaints do not mean that the client is not loyal to you. Some customers just love to complain. From experience, I’ll say that the most “annoying” customers more often than others renew their subscription.

Listen to complaints, study identified problems, correct them and draw conclusions. Just do not think that the client is lost, and you should not waste time on it.

Secondly, laid off customers may be the foundation for the growth that you will need in a few months . These are the ones that use the product in a different way than you intended? Do they want to know your plans for the project for two years in advance? Those who constantly threaten to leave and spend a lot of energy and time of your support team? You may be surprised, but they actually show you the future. A good future, at least a small part of it.

Thirdly, even those customers who cost support services are likely to be positive in terms of ROI, given their subsequent payments. I know you think that a client who pays $ 150 a year and sends 20 calls per month cannot be ROI-positive. What will happen if the client stays with you for 4 years? And in one way or another will bring two more clients? Suddenly, the amount can grow up to $ 1800. Isn't that enough? I am sure that while you are at the beginning of the journey, such amounts will be very useful.

Not all segments of the customer base should be profitable, while the vast majority are. You can even learn from those customers who actually do not earn anything.

So what is my key piece of advice ? If you have annoying clients that you would prefer to get rid of, and those that bring $ 20,000 - $ 100,000 a year, then do not rush to dismiss the first. Hire a psychiatrist.

I speak almost literally. Take a new person to the team, completely new, without baggage . Revenues from troubled customers will just cover the costs. The new employee will probably not be able to solve a single problem, complaint, or question. However, he will be able to listen . Switch to yourself all dissatisfied.

This will relieve stress of your current team, which will take on other tasks.

A beginner will just listen. Accept complaints and keep customers informed. Without much burden on developers and support services. It will actually be a buffer.

As a result, you save your income. Get the effect of repeated payments. And, most importantly, find out where these customers will lead you.

The last thing you would like to do is re-conquer these customers. Building a customer base in the SaaS business is difficult and expensive. Keep them as a laboratory to study if other options seem unsuitable.

Comment by Omnidesk


Our team is closer to the “Pumpkin Method” , so we listen to the best customers to attract the same. We don’t refuse “inappropriate”, but such thoughts were visited from time to time.

This article was liked just because of the opposite point of view: it helps to think over and revise some aspects of the current approach. Plus, Jason Lemkin does not advise bad :)

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