Volume, cost, and touch: two models for servicing customers (and the grey area in between)
As a customer experience professional that has served on almost every side of the customer lifecycle during the course of her career (marketing, sales, support, and success) I’m often asked where the line should be drawn between sales and support, or sales, support, and success.
Sometimes companies define the line as revenue. This is a dangerous place to draw the line for support professionals, as businesses often associate business worth and impact by revenue. When support teams remove themselves from revenue, they remove themselves from resources: pay discrepancies between support and sales emerge, and proper staffing becomes a struggle. Pay discrepancies cause bitterness, drop in morale, and competition among team members, and lack of adequate staffing makes it harder to deliver timely, helpful responses. Does that sound like a recipe for great customer support?
When you treat customer support as a cost center….it becomes one.
The Support Driven Growth methodology suggests an alternate approach: remove the idea of sales vs. success vs. support completely, unite under a singular customers team, and shift the discussion in models about the amount of high touch or low touch required instead.
Enterprise vs. Self Serve vs. Transactional Support
Joel York famously wrote about three different SAAS models. While these models are designed for SAAS, this framework applies generally for most products, services, and businesses.
How does this apply to customer support?
Your customer support strategy will need to follow suit with the strategy that makes sense for your business or product. Mature businesses may have a combination of all three models (or at least two), and businesses that can’t achieve the right price point vs. complexity end up failing. Both having an improper amount of support touch for an expensive, complex product and having an expensive, high touch process on a low value product will end you up in the graveyard.
Enterprise
Enterprise products come with a high price tag, but also a high complexity that requires a high touch. The high touch nature begins pre-sale, likely using an account based marketing strategy and formalized sales relationship forged well before getting near the point of sale or trial, sometimes taking months before actually becoming a customer.
In the Enterprise model, we see the closest version of what a traditional sales process looks like: Account Based Marketing has marketing and sales working together until a handoff to Sales, the sales relationship hands off to an account manager at the point of purchase. In addition to a dedicated support manager, they may even have a solutions consultant to offer custom engineering development. These products have a high, high price tag to support the long, long sales cycle and high touch nature both pre and post sales. Examples of enterprise models are: Salesforce, Adobe, and Microsoft.
Self-service
Self-service on the other hand, is considered the ideal SAAS profile. In self-service businesses, there is no sales team. Instead, marketing drives demand into a trial, and then product drives adoption from within that trial. The support team is there for all sides of the process to help people navigate at every part of the funnel from pre-sale to post sale and onward, but highly likely they will almost never be needed. Examples of successful self-serve businesses are: Calendly, Slack, and Dropbox.
Transactional
Transactional is a bit of a hybrid between Self-Serve and Enterprise. The high price tag requires high trust and confidence in the support they will receive, but the low complexity takes the high-touch relationship out of the pre-sale and post-sale process. This requires a need for increased automation and educational resources, like self-serve, but a highly available and efficient team.
Where are the lines?
These three models articulate one thing clearly: the lines between strategies are less about who touches revenue, and more about the amount of touch needed and when, based on cost and complexity. Instead of thinking about what sales should handle vs. success or support, we should instead be thinking of developing a low touch strategy and a high touch strategy, with the dividing lines being value and volume.
Low touch = low value + high volume
The “low touch” team really is the customer support team as we mostly know them: on the ground of customer issues, at every part of the funnel, and at scale. If you have a high volume of customers that have a relatively low price tag, this is the most effective support strategy.
Low touch teams handle all incoming requests for the high volume, low value customer, whether it’s presale or post sale, and offer both technical support like troubleshooting bugs, and value-driven support like “use this feature to accomplish this goal.” If you have a great low touch, high volume team, this side of your business should be both incredibly profitable and incredibly stable.
High touch = high value + low volume
If you have a price tag of over $10,000 for a year in revenue, you’ll likely want to follow a high touch model. The high touch starts at the marketing level with account based marketing, segues into a formalized, dedicated presale relationship geared towards educating the prospect customer on the product and services in a consultative manner, then intros into a post-sale account manager and dedicated solutions consultant where applicable.
To justify the costs of this sort of relationship touch, based on assumed costs of salaries of team members involved, a good rule of thumb looks like this: For every 100k salary involved, 1 million dollars in revenue should be generated.
So, using the 10k ARR contract above as an example, that means the presale relationship to close should generate at least 100 contracts for the year. But, this gets complicated with the two additional roles in the postsale relationship, and the touch required to maintain and expand the customer relationship.
Instead of thinking of this as a sales quota vs. success quotas, we can think of this as a high-touch trio. The trio will need to secure, maintain, renew, and expand 3M for the year (on the understanding they are all making 100k). Thinking this way unites the high-touch team in a common goal of both securing, maintaining, and expanding the revenue, without fragmenting the metrics on which team is securing, keeping, or losing the revenue. Thinking this way eliminates problems of poor customer fits pushed through for the sake of quotas, and poor handoffs setting the post-sale team up for failure.
Finding the lines
Mature businesses will have both models at play, though they usually start with one and then explore and expand into a different model. Both expanding up market and moving down market require rigorous experimentation and measurement.
Moving up market
The key in finding the line when moving up market is to do analysis on your customer base, break down your customers into segments, and identify what each segment’s buying behavior looks like, and how much engagement maximizes their value without hindering ROI.
At Help Scout, we used a data scientist to identify these segments as part of a customer journey crafting exercise. We segmented our customers by user count based on the findings:
1-3 user accounts churned frequently and rarely grew. Ultimately they cost more than they delivered. These accounts we moved towards a pure low to no touch, self-serve path.
4-10 user accounts were stable and grew slowly over time. For these we adopted a hybrid approach of leading with self-serve, but offering additional support options for customers to opt into if they needed, like coaching calls.
11+ user accounts were the most valuable, not only by initial dollar amount, but also tendency to expand. For these, we sent confirmed large accounts to the “high touch” red-carpet team.
The larger the disparity in value and volume between your discovered customer segments, the larger the need to develop a “high touch” team and a “low touch” team to service these two audiences.
Once you identify which existing segments create the most value for your business, you can go in two directions to move up-market:
Use your self-service plan almost like a lead source for a land and expand strategy, using customer behavior and indicators exhibited in their account during trial and beyond to pass potential high-value customers to the high-touch team.
Use the high-value customer segment identified to create an ideal customer profile for Marketing and the high-touch team to commence an account based marketing strategy to start reeling in bigger fish.
You’ll know the strategy is working if applying higher touch to the high value segment increases the volume and overall value of those accounts without compromising the volume and value of the lower touch accounts. It needs to increase the volume and value of those accounts enough to account for the cost of higher touch. If the higher touch strategy doesn’t increase both the volume and the value to cover the costs of high touch, you may be better off keeping that segment on the self-serve strategy, experimenting with different levels of touch until you find the magic combination.
Moving down market
For down market, you may need to start with a clean slate. Expanding your market downstream will likely have to do more with the company profile your marketing team is seeing in your top and middle funnel activity, but drops off after being priced out.
That is not to say you cannot learn anything from your existing customer’s behavior. Your high-touch team likely has a good sense of “the easy ones” and the “demanding ones.” Start by grouping the easy ones together to see if trends emerge. Trends in:
What parts of the product do they use or not use?
What do the “easy ones” find more valuable about the product?
What is the size and shape of their company?
These customer insights can help your product team develop an “essentials” or lighter weight plan that requires less high-touch efforts, and your marketing team develop a profile to target. The decision to move down market should weigh the cost of losing “easy ones” to a lighter tier plan vs. the volume of “easy ones” in the marketing funnel that drop off in pricing conversations, assuming they can be won by a lower cost, lower effort plan.
Charging for high touch
There’s a third take for navigating the grey area, and that’s a trend that’s been popularized by “in between” companies like Hubspot and Zendesk and that is charging for high touch support.
Full disclosure: Unlike the high touch and low touch strategies, I’ve never personally applied this to an organization. Therefore I cannot speak to it’s efficacy. That said, it’s an intriguing way to solve for the problem of customers wanting, and perhaps needing, high touch support with not having the price tag to merit it.
Hubspot takes a consultative approach, and offers high-touch packages as professional services. Aligning high-touch services with becoming a marketing or sales expert helps customers reach goals vs simply getting support with the product. That said, they also sell high-touch implementation help to get over the hurdle of a highly technical implementation.
Zendesk sells training and professional services packages. The packages range from $500 for online video courses to thousands of dollars for individual, in-depth training packages for their individual tool boxes.
If the price tag of your product can merit its own high-touch support trio, charging for that high-touch (IMO) is a little tacky. If it doesn’t, it’s a nice option to offer hand holding to customers that need it, and are willing to pay for it, without sending the business into the red.
Enter: the ‘Customers’ team
Making all of this work seamlessly requires collaboration, transparency, and alignment between all parties involved: every customer facing team member. Uniting team members goals, objectives, and responsibilities under a single team bridges resentments and “othering” that comes from differing salaries and perceived differences in business value. Shared tools, processes, and leadership fosters collaboration, not competition.
Scale into specialties
Yes, it’s true. People have different talents and specialities, and that is true for customer-facing teams. Some are naturally consultative, great for leading a customer through onboarding while educating the value of a product or service, and some are better at putting their head down and really troubleshooting a bug, then communicating the technical implications and fix that comes with it.
With scale can come specialties. At Brightback, a company with a high value high touch model, an example of this specialization might be the roles traditionally seen as “Account Manager” (relational, high touch support) and “Solutions Consultant” (technical, high touch support). Each account has a dedicated representative for both value support and technical support to account for the deep specialization required in servicing. Note: it is not a model where the Account Manager handles the relationship and sends technical issues to be handled by a disconnected support team.
The low-touch model looks a little different as far as specialization goes. At Help Scout, for example, they break out their high volume, low touch support team into generalists and specialists. Generalists are front line support, and service core channels: email and chat. At a high level, generalists are expected to help customers at all parts of the funnel, delivering both technical support (like troubleshooting and logging a bug) and value support (educating on why you might use a certain feature to solve a specific problem). Specialists spend 60% of their time servicing core channels, and the other 40% of their time going deep into a specialty: engineering, operations, growth, and product.
This shouldn’t be that weird of a concept. Engineering teams have frontend, backend, DevOps, fullstack, security and QA. Marketing teams have brand, content, SEO, demand gen, partnerships, and a whole slew of other specializations. And yet customer facing teams are frequently divided with different leadership, goals, and hierarchy in business value, and people wonder why it’s so challenging to get these teams to work together!
Unified ‘Customers’ team = everyone wins
Uniting customer facing teams eliminates pay discrepancies, staffing, and resource issues that breed resentment and lower morale. It also maximizes profits by making the entire funnel more efficient.
But most importantly, the customer wins. When everyone shares the same goals, the same team, everyone is equally invested in the customer’s success at every stage of their experience. This creates a seamless customer experience from pre-sale and beyond, ensuring the customer’s success.