Your lowest paying clients usually require the most support. The good news is that you can accommodate for this without reducing your margins. Here’s how to reduce support costs, especially for those clients who pay you the least amount of money.
Table of Contents
Customer Support Costs of Low-Paying Clients
Customers in your lowest tier of service might have selected your solution based on price, not value. They don’t fully understand why paying more for your products or services warrant the higher investment.
Side note: notice I said “investment” and not “cost” here. In your sales pitch and marketing materials, be sure you convey that your solution is an investment because it will save or earn money for your client. If they look at you as a cost center, then you may be among the first to get slashed in cost reduction measures.
I once calculated the cost of every customer phone call to be $40 for a 10 minute conversation. This includes the cost of corporate infrastructure as well as the staff’s salary. Your costs may be higher. This means that you need to ensure that low paying customers are managed in a way that maintains your margins.
You are, after all, in business to make a profit. While you want to be helpful, if you provide individualized assistance to every low-paying client, your profit margins will suffer.
How to Reduce Support Costs
Your move: position your support to have added value.
When clients see the value separated as a unique line item, it’s easier for them to understand that there is a separate cost to support.
Reducing support costs boils down to two factors:
Let’s take a deeper look at how to use each component of this strategy to reduce support costs.
1. Sample Packaging
First, break down your product, or service, into tiers based on price. You can package your support by listing it out as a line item on your pricing page or mentioning it in your marketing material. Here’s an example:
- highest tier: client success manager
- mid tier: phone support
- low tier: email support
Next, add a line item to offer the higher level of support (like a client success manager) to your mid and low tier clients as a support upgrade:
- upgrade option: extra $ for client success manager
This frames your support offering as having additional value instead of being included at no additional charge. When you make it clear on your website or in your proposals that you have different support tiers, you can charge extra money for it.
2. Sample Automation
There’s a catch to positioning your individualized support as a higher-tier offer: onboarding. Your clients won’t know how to be successful with your solution automatically so you will have to lead them down the most common paths.
Using an email marketing solution like Send In Blue (affiliate link), we’ve set up numerous automated emails. You can do this yourself very easily to increase the chances that your lower-tier clients will have a positive experience.
Set up automated email triggers to help them:
- Configure their account
- Add customers
- Set up integrations
- Understand your dashboard
Invite them to attend webinars where they can ask questions so you can address many clients at once without the expense of supporting each one individually.
Use Mass Communication to Reduce Support Costs
Your lower-tier customers still need support, but because every manual reply to their support inquiries costs you a larger percentage of your monthly revenue from them, you need to scale your ability to connect with them. This is one of the key ways to reduce support costs.
The easiest way is to offer regular webinars, such as “office hours” that focus on a specific feature or ways to solve a targeted problem they may be facing.
Most customers appreciate webinars from vendors because it offers the opportunity to learn how to use tools and techniques to overcome challenges. The webinars allow you to respond to multiple clients in one sitting. Many may be thinking of the same question. Responding in this format allows you to reduce support costs because you are using a one-to-many approach.
By packaging your support as an upgrade option and providing mass messaging via emails and webinars, you will reduce your expenses and still be able to support your lower paying customers.
Author: Raj Khera, Publisher of MoreBusiness.com