Do not dismiss "bad" clients, hire them a psychiatrist

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

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

In the process of becoming each company faces similar problems. At a certain point, when you, for example, recruit a couple of hundred customers, the base begins to be segmented. Some customers (say, 10%) are constantly complaining. The other 10% use a version or product module for which you no longer want to spend resources. Or even simpler: the weakest in terms of profitability of 10% of your customer base takes too much time. One tiny client "sucks energy" from the entire support service, although it brings nothing at all.
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I understand this 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 configuration, but in terms of current issues, they are the least demanding.

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

So dismiss the small, irrelevant and annoying customers, you say?

I suggest to look at the situation differently:

First, you will be shocked how poorly complaints are correlated with 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. Just quietly leave you and go to competitors. Sometimes even for no particular reason.

Complaints, by contrast, are often a sign of deep attachment to a product that is diluted with discontent. There are no perfect products. But these complaints do not mean that the client is not committed to you. Some customers just love to complain. From experience, I will say that the most “annoying” customers more often extend their subscription.

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

Secondly, dismissed customers may be the foundation for growth that you will need in a few months . These are the ones that use the product differently than you intended? They want to know your plans for the project for two years ahead? Those who constantly threaten to leave and spend a lot of energy and time of your support team? You might 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 a lot to support services are likely to be positive in terms of ROI, given their subsequent payments . I know you think that a customer who pays $ 150 a year and sends 20 calls per month cannot be ROI-positive. And 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 rise to $ 1,800. Is this not enough? I am sure, while you are at the beginning of the journey, such amounts will be very helpful.

Not all customer base segments need to be profitable, as long as the vast majority are. You can even learn from those customers who actually earn nothing.

So what's my key advice ? If you have annoying customers that you would prefer to get rid of, and those that bring in $ 20,000 - $ 100,000 a year, then don't be in a hurry to fire the first ones. Hire him a psychiatrist.

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

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

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

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

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

Comment from Omnideska

Our team is closer to the "Pumpkin Method" , so we listen to the best customers to attract the same. From the "inappropriate" do not refuse, but such thoughts from time to time visited.

I liked this article precisely 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 recommend bad :)