Here’s Why You Should be Using Tiers in Your Business

Jenny Stilwell — October 19, 2017 Follow @jennystilwell

— October 19, 2017

PublicDomainPictures / Pixabay

Client tiers are important! They put your day to day operations into perspective and allow you to really focus on what you should be doing!

Let’s assume you have 4 Value tiers for your clients and they are

Tier 4: 60% of clients contributing less than $ 1000 a year to the practice – 360 clients
Tier 3: 33% contributing $ 1,000 to $ 5,000 per year in fees – 198 clients
Tier 2: 5% contributing between $ 5,000 to $ 10,000 a year in fees – 30 clients
Tier 1: 2% contributing more than 10K per annum to the practice – 12 clients

Tiers will :

1. 1. Highlight where to spend your time to maximise revenue/billings
      Don’t let lower tier clients hijack your time and resources. You need to decide whether you can grow them to a higher tier and if you can’t then decide whether to keep them. Yes, some small clients can sometimes become very large, but not all of them and sometimes at the expense of your other clients. Tiers help with your selection process and show you where you need to focus your time
   2. Identify resource requirements for managing large numbers of clients
      It is impossible to manage all your clients directly in a productive and effective way, if you have a lot of clients. Top tier clients demand the most resources with regular one on one interaction. If you have many low-end clients they still need attention, but this may be better delivered via a support team or a personalized automated email system. You don’t want to forego the revenue from these smaller clients, but you don’t want these clients to cost the business money in top-level client support.
   3. Tiers will keep you aiming for the stars
      If you don’t know where you are today, how can you plan where you are going? You can grow your business significantly by continuing to focus on how to push the limits of your upper tiers and how to move clients up a tier. If your top tier today is $ 10K plus, make it a goal to have top-tier clients worth double that next year. Then today’s tier one becomes tomorrow’s tier 2.

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