You can’t sell the same product to everyone, nor can you sell different products in the same manner. Each customer has a unique set of characteristics that can determine a wide range of needs and wants. Therein lies the ever-evolving phenomenon of market segmentation. SaaS businesses too, have realized the need for segmentation and have distributed their core product offerings into tiers – each tier is targeted towards a relevant subgroup of customers.
Source: Phil Nanus, TSIA
The Three-Tier CS Model
In order to address the demand for differentiated products, three main Customer Success Models exist – each with their own distinct attributes.
The High-Touch CS Model is people-intensive – this usually means that throughout the customer journey, there is significant hand-holding from CSMs or the Support team. The High-Touch Model is for companies that have one or both of these things:
a) Complex Data
b) A large customer base
The High-Touch Model can also be called “Enterprise.”
The Tech-Touch CS Model is capital intensive, to say the least. This means that it is fully automated, and does away with the need for human involvement. More often than not, the Tech-Touch model is “freemium” – everyone can use it, without any kind of costs attached and is designed for Small/Medium Businesses (SMB), and intended for expansion opportunities to a higher paying tier in the future.
The Low Touch CS Model is a cross between the High-Touch and Tech-Touch Model. It is a “mid-market” product and shares elements of both – it is automated and self-serve in nature, but at the same time, CSMs and/or the Support team can step in to solve customer issues, if need be.
The Low-Touch CS Model
Having established a premise for this article, let’s take a deeper dive into the Low-Tech CS Model and the most common myths associated with it.
Myth #1: Companies only resort to Low-Tech to save costs
While the Enterprise/High-Touch model does great in terms of thoroughly implementing Customer Success processes, it requires a significant investment of time, money, and manpower. It also leaves a niche for mid-market businesses – customers in this segment are often unable to afford the full, High-Touch model of Customer Success, and the High-Touch model is hard to scale without an army of CSMs. SaaS businesses have realized this and developed a model that was a better fit for SMB needs and profitable for their business’ bottom line as well. This also leads to the question of whether this model was solely created to cut costs, with little or no benefit to the customer.
This argument is not only incorrect, but it is also illogical. Realistically, mid-market, SMBs do not require a full-feature version of a product – they have fewer customers and simplistic data integration needs. All they are looking for is a self-serve offering, enabling a quick fix for implementing Customer Success within their organization.
Another argument defying this myth is the fact that companies invest in automating processes, in order to deliver a “self-serve” product. This automation includes email/marketing campaigns, automated training modules, automated health score measurement systems, and multiple other integrations. The Low-Touch Model, therefore, incurs a significant “set-up” cost, as opposed to cutting costs altogether.
Myth #2: NPS will fall in this segment & Health scores will be adversely affected
Another common misconception about the Low-Touch model is that it leads to falling health scores. Owing to the minimized human involvement in this model, it is often assumed that this model is left at the disposal of customers – with little or no monitoring, ultimately resulting in poor NPS scores. Low-Touch is often equated with low satisfaction and low customer loyalty because there is less of a personal bond with the customer. However, instead of thinking of it as low-involvement, it’s more about teaching a man to fish and letting him operate independently.
A Low-Touch Model generally has more thought and effort put in initially, so that it can sustain operations through varied customer issues. After putting so much thought into designing and implementing it, it is proactively monitored by CSMs and the Product team in order to fix bugs and issues before customers complain about them.
Myth #3: It is neither here nor there – it confuses the customer
Since the Low-Touch Model is a hybrid – a cross between High-Touch and Tech Touch, it is often assumed to be neither here nor there. Questions like these are quite common for a Low-Touch product:
- Is it completely automated?
- Is there no human interaction involved?
- How is it different from Tech Touch, if it is automated, with no human interaction?
- Will customers be abandoned, in the event of a bug or problem with the product?
Effective communication is the key here! Make sure your Sales team is well-equipped to answer these questions and CSMs should also clearly communicate the utility and features of a Low-Touch product. Show how they can operate independently and invest the time in setting things up correctly. During onboarding (which is generally a less labor-intensive process), CSMs should also give a direct helpline number to customers, in the event of any issues and assure them that the company won’t leave them high and dry when they need their help the most!
Myth #4: It is more of a Marketing role than a CSMs’
Since Low-Touch CSMs use a combination of tools such as email, user groups, webinars, communities, customer advisory boards, and more, the ownership of the Low-Tech Model becomes questionable. All the tools mentioned here sometimes fall under marketing – is Low-Touch a Customer Success Management Model at all?
The Low Touch Model does use a plethora of marketing tools, but that doesn’t make it any less Customer Success. The tools used by customers might be marketing-oriented, but they supplement the final usage of the product – this falls under the purview of Customer Success.
From a strategic viewpoint, segmenting on the basis of “touch” is extremely crucial. It not only leads to greater avenues for revenue generation for the company but also targets various subsets of customers who have differentiated needs and requirements. Each CS model has its unique features and this helps cater to specific customer concerns and issues.