They say all customers are equal, and when it comes to showing them respect and offering outstanding service, that’s absolutely the case. However, the cold, hard truth is that not all customers contribute equally to your bottom line. Today, we’re going to look at why, despite our best intentions, some customers are more valuable than others—and how you can make the most of it without sounding like a pompous snob.
Before you start feeling guilty about giving preferential treatment, remember: business is about growth. It’s about ensuring that every pound you spend on a customer relationship brings you a good return. So buckle up, because we’re about to explore the nuances of customer value, and the only way to do that is through being brutally honest.
The egalitarian myth and the harsh reality
At first glance, the idea that “all customers are equal” seems not only fair but also the epitome of good business practice. In an ideal world, every customer should receive the same level of care and attention. But in the real world, business isn’t a charity—it’s a battleground where margins matter and every customer must justify their existence.
Consider this: if you treat every customer the same, regardless of their profitability, you’re likely to end up spending more on service and support than you earn. It’s like serving a five-course meal to someone who only pays for a takeaway sandwich. Generosity is admirable, but it doesn’t always pay the bills.
The key is to recognise that while every customer should be treated with courtesy and respect, you must also be smart about where you invest your time and resources. Some customers are diamonds, while others are just shiny glass. You need to be able to tell the difference.
Recognising the customer hierarchy
It’s time to get real: not all customers are created equal. Your customers fall into a hierarchy based on their potential lifetime value, ease of doing business, and alignment with your strategic goals.
Imagine your customer base as a garden. Some plants are vibrant roses that require little water and bloom with minimal fuss, while others are prickly bushes that need constant attention and barely produce fruit. Your job is to nurture the roses—and sometimes, learn when to trim back the bushes.
The diagram neatly segments your customers into three tiers:
- Very Important Patrons: Those who consistently deliver high value, spending lots of money with your business.
- Regular clients: Those who spend a moderate amount of money with you, and require regular support and contact.
- Occasional customers: This is your problem tier – people who don’t spend much money with you at all, and may only use your services occasionally.
This visual guide can be your roadmap to understanding where to focus your energies.
The top tier: Very Important Patrons
Not all customers are created equal, and that’s never more obvious than when you look at your revenue figures. In most B2B companies, a small slice of your customer base accounts for a disproportionately large chunk of revenue. These customers are your golden geese – but only if you treat them as such.
For these top-tier customers, it’s not enough to send the occasional cheery email. Get personal. Build genuine executive relationships. Go beyond surface-level rapport and become a true partner in their business. Think face-to-face meetings, proactive calls, and quarterly business reviews that actually add value rather than just clogging up their inbox. This level of attention shows them their importance and ensures they see a return on their investment with you.
But here’s the catch: delivering this level of service is not for the faint-hearted. Determine what services your best customers need, estimate how much time it takes to deliver them, and be realistic about how many top-tier customers your team can manage effectively. Think of it like hosting a dinner party. If you invite 50 people but only have one bottle of wine and half a packet of crisps, it’s going to be a disaster.
A reasonable goal for many companies is to have around 40% of their revenue come from this tier, often represented by fewer than 10% of customers. Staffing senior customer success managers (CSMs) for these accounts is essential – no one wants a rookie managing their biggest account. Treat these relationships like the precious assets they are.
The second tier: Regular clients
Now, we enter the world of your mid-tier customers. They’re valuable, but not to the point where a personalised wine-and-dine service makes sense. For this lot, efficiency is the name of the game.
Here’s where automation becomes your best mate. Think automated reports, drip campaigns, and personalised updates signed off by your CSMs. Bonus points if you benchmark their data against similar customers or highlight industry trends. These are the thoughtful touches that say, “We’re keeping an eye on your success” without requiring a weekly hour-long call.
Your mid-tier CSMs will likely handle 10x more accounts than their top-tier counterparts, so work smart. Set up scalable systems that provide genuine insight, not just noise. And when issues do arise, make sure your team is ready to jump in like a customer service superhero (cape optional).
This tier might represent around 30% of your revenue. They’re not your cash cows, but they’re reliable and steady. Nurture them, and some might just graduate to the top tier.
The third tier: Occasional customers
Then there’s the third tier. The ones who bring in some revenue but not enough to justify white-glove service. Think of them like a budget supermarket’s own-brand biscuits – perfectly edible, but you’re not going to break them out at the shareholders AGM.
For this group, the key is self-service. Build a top-notch knowledge base, intuitive onboarding, and seamless support systems. But don’t mistake “low touch” for “low value.” Provide insightful content, educational resources, and product updates that keep this group engaged. It’s about creating a consistent and positive experience at scale. Keep the product evolving based on feedback, and you’ll reduce churn while maintaining profitability.
This tier might make up the majority of your customers, but they’ll likely contribute the smallest portion of revenue. That’s fine. Managed well, they’re still a profitable piece of the puzzle. Just remember: a strong product experience is your best customer service representative here.
Balancing service and profitability
If some customers are more equal than others, how do you balance exceptional service with profitability? The answer is to focus your resources where they make the most impact and not be afraid to set boundaries.
Invest in your Very Important Patrons
Your top-tier customers should receive the lion’s share of your attention. This doesn’t mean neglecting others, but recognising that the marginal cost of servicing these clients is lower when you use systems and processes tailored to their needs. Offer them bespoke support, dedicated account management, and access to exclusive insights. Their loyalty and higher spending mean that every extra effort you invest in them pays off multiple times over.
Streamline service for the rest
For those customers who are less profitable or require more effort than they’re worth, focus on efficiency. Implement self-service options, automated support channels, and clear communication protocols. By streamlining service for these clients, you free up valuable time and resources to invest in higher-value relationships. It’s not about cutting off support—it’s about ensuring that every interaction is as efficient and effective as possible.
Putting it into practice
This model is one I have used with pretty much EVERY organisation I have ever worked with – it is an incredibly powerful piece of thinking. The first time I implemented it (wavy lines) was back during my time around Peer1, where – working with the hugely talented Nathan Federici and Michael Gardner. Our commitment to giving great customer service never changed, but we knew that a model where those who were barely contributing to our bottom line were getting the same support as those who were huge drivers of our growth was never going to be successful.
So we restructured how we offered our Technical Account Management into tiers – the same ones you saw in our diagram above. Our senior experts dealt with our VIPs, handling a small number of accounts and offering detailed support levels. At the next level down, each staff member was dealing with more accounts but were offering a more streamlined approach, providing practice support where it made the most impact.
At the lower tier, we acknowledged that a high-touch model just was not sustainable. Instead, we built up our self-service capabilities and focused on creating brilliant digital support resources. When they did need to speak to someone? They still got exactly the same service they’d expect – we just worked hard to make sure such instances were few and far between.
The role of technology and data
No discussion on customer value would be complete without a nod to technology. In today’s digital age, data is your best friend. Advanced analytics and customer relationship management (CRM) systems allow you to segment your customer base, track behaviour, and tailor your strategies accordingly.
Imagine being able to predict which customers are likely to become high-value clients or identifying early warning signs of potential issues before they spiral out of control. That’s the power of data. With the right tools, you can make informed decisions that optimise both service and profitability.
Invest in systems that not only track financial metrics but also measure customer satisfaction and engagement. By understanding the full picture, you can adjust your approach to meet both the needs of your customers and the health of your business.
It’s not about favouritism—It’s about strategy
Recognising that some customers are more equal than others isn’t about playing favourites. It’s about strategic decision-making—ensuring that every pound, hour, and resource you invest in customer service contributes to a healthier, more sustainable business.
When you align your customer service model with the reality of customer value, you create an ecosystem where golden customers flourish, draining ones are managed efficiently, and opportunities are seized at every turn. It’s a challenging balance, but one that’s absolutely critical for long-term success.
So, while every customer deserves courtesy and respect, be smart about where you focus your efforts. In a fiercely competitive world, understanding and acting on these differences can transform your approach to customer relationships and, ultimately, your bottom line.
Let’s face it: you can’t please everyone. But by focusing on what truly matters, you’ll build a resilient, profitable enterprise that’s built to last.
Written by business coach and leadership coaching expert Dominic Monkhouse. Contact him to schedule a call here. You can order your free copy of his book, Mind Your F**king Business here.