One of the commonly asked questions in account management is whether to tier (or group) clients.
In most cases, the answer is yes.
Effective time and resource management: By tiering your clients, you can optimise the time and effort of your account managers. Prioritising high-value clients who contribute significantly to your business or have potential for substantial growth, allows you to allocate resources strategically.
With a large team, you can assign your most experienced and skilled account managers to nurture these relationships. Whilst lower-value clients can be managed by less senior staff.
If you have a small team, say one or two people, this focused approach prevents valuable resources from being spread too thin across a broad client base.
Tailored client engagement: Client tiering empowers you to provide clients with what works best for them in terms of contact, attention, and advice. Understanding the optimal frequency of communication and interaction for each client helps avoid over or underwhelming them. By tailoring your engagement based on their preferences, you demonstrate a deeper understanding of their needs and foster stronger relationships built on trust and mutual benefit.
Focus on clients with an appetite for change: Not all clients are open to change or receptive to new offerings. Tiering allows you to identify and focus on clients who have an appetite for innovation and growth. By directing your efforts toward those who are more likely to embrace new ideas and solutions, you can avoid wasting time and resources on clients who are not interested in new offerings.
This targeted approach increases the chances of upselling and cross selling, delivering value and securing long-term partnerships.
Value creation through proactive account management: Tiering enables you to concentrate your efforts where you can genuinely add value. By dedicating more time and attention to clients who have the potential for growth, you can actively contribute to their success. This might involve providing tailored advice, industry insights, or customised solutions that address their specific pain points. By closely monitoring the needs, behaviour, and satisfaction levels of your clients in different tiers, you can identify potential issues or opportunities and act on them quickly.
Positioning yourself as a trusted advisor, you enhance your reputation and solidify your role as a valuable partner in their business journey.
Preventing neglect: A client base covers a diverse range of personalities, preferences, and communication styles. Tiering ensures that “quiet” clients, who may not frequently reach out for assistance or express their needs, do not get overlooked. By consciously including them in your tiering system and proactively engaging with them, you demonstrate a commitment to providing comprehensive support and prevent potential business opportunities from slipping through the cracks.
Scalability and growth: As your business expands, implementing a client tiering system becomes even more crucial. By organising your clients into tiers, you can scale your account management function effectively, ensuring that you can provide consistent and high-quality service to a growing client base.
Additionally, as you gain insights and experience from managing clients across various tiers, you can refine your strategies, identify best practices, and continuously improve your account management processes.
Implementing a client tiering system enables you to take a strategic account management approach. By leveraging this strategy, you can manage time and resources effectively, tailor client engagement, focus on clients receptive to change, create value, prevent neglect of quieter clients and scale for growth.
There are some situations where it may not make sense to implement a tiering system.
Here are a few example scenarios.
Homogeneous client base: If your client base consists of customers with similar needs, preferences, and revenue potential, tiering might not provide significant advantages. In this case, it may be more efficient to adopt a standardised approach across all clients, ensuring consistent service delivery without the need for tier-specific resource allocation.
Small client portfolio: When you have a limited number of clients, the benefits of client tiering may be diminished. With a small client base, it is often more practical to provide personalised attention to each client rather than categorising them into tiers. However, as your client portfolio grows, tiering can become more relevant and beneficial.
Highly reactive industry: In certain industries where client demands and needs change rapidly or unpredictably, a rigid tiering system may not be effective. If the nature of your business requires constant adaptability and responsiveness to clients’ evolving requirements, a more flexible and dynamic account management approach might be more suitable.
Equal revenue contributions: If the only way to determine your clients’ value is based on revenue (and I’d challenge you to explore whether this is indeed the case) and all your clients contribute equally to your business income, differentiating them into tiers based on value might not be justified. In such cases, it may be more appropriate to focus on providing consistent, high-quality service to all clients rather than creating tier-specific strategies.
High resource availability: If your organisation has ample resources, including experienced account managers and sufficient support staff, the need for client tiering may be less pronounced. With the capacity to dedicate substantial resources to each client without resource constraints, the benefits of tiering may not be as crucial.
With the above in mind, assess your specific business circumstances, client dynamics, and objectives. In most cases, embracing client tiering can maximise your account management effectiveness.
By strategically implementing client tiering, you can unlock opportunities for tailored engagement, effective resource allocation, proactive value creation, and scalable growth.
If you would like help in creating a more effective account management function, contact Sharon for a free discovery call.
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