What are the best practices for creating value-based service tiers?

1 Define your value metrics

The first step to creating value-based service tiers is to define how you measure the value of each customer. There are different ways to do this, such as by revenue, profitability, lifetime value, loyalty, referrals, or feedback. You should choose the metrics that best reflect your business objectives and customer behavior. For example, if you want to retain high-spending customers, you might use revenue or lifetime value as your value metrics. If you want to encourage word-of-mouth marketing, you might use referrals or feedback as your value metrics.

2 Identify your service segments

The next step is to identify how many service segments you want to create and what criteria you will use to assign customers to each segment. You should consider factors such as the size of your customer base, the diversity of your customer needs, the cost of providing service, and the expected return on investment. You should also avoid creating too many or too few segments, as this can lead to confusion or dissatisfaction among customers and staff. A common approach is to use the Pareto principle, which states that 80% of the results come from 20% of the causes. For example, you might create three service segments: high-value customers who account for 80% of your revenue, medium-value customers who account for 15% of your revenue, and low-value customers who account for 5% of your revenue.

3 Design your service offerings

The third step is to design the service offerings that you will provide to each segment. You should aim to create a clear differentiation between the segments, while still ensuring that all customers receive a satisfactory level of service. You should also consider the benefits and costs of each service offering, and how they align with your value proposition and competitive advantage. For example, you might offer high-value customers a dedicated account manager, priority support, personalized recommendations, and loyalty rewards. You might offer medium-value customers a standard support line, online resources, and occasional discounts. You might offer low-value customers a self-service portal, chatbot support, and basic information.

4 Communicate your service tiers

The fourth step is to communicate your service tiers to your customers and staff. You should explain the rationale behind your segmentation, the benefits of each tier, and the criteria for moving between tiers. You should also provide clear and consistent information across all channels, such as your website, email, social media, and phone. You should also train your staff to deliver the service offerings according to the segment they are serving, and to handle any questions or complaints from customers. For example, you might create a landing page that showcases your service tiers, send an email to announce the changes, post on social media to highlight the benefits, and provide scripts and guidelines to your staff.

5 Monitor and adjust your service tiers

The final step is to monitor and adjust your service tiers based on the feedback and data you collect from your customers and staff. You should measure the impact of your service tiers on key performance indicators, such as customer satisfaction, retention, loyalty, revenue, and profitability. You should also solicit feedback from your customers and staff, such as through surveys, reviews, ratings, or interviews. You should use this information to identify what is working well and what needs improvement, and to make changes accordingly. For example, you might find that some customers are unhappy with their service tier, or that some service offerings are too costly or ineffective. You might then revise your value metrics, segment criteria, or service offerings to better suit your customers and staff.