B-side operations: How to achieve refined operations through a customer grading system?

The determination of the buyer-seller relationship in the B2B market is a relatively complex and long-term process, so companies tend to maintain a stable buyer-seller relationship. The high stickiness of B-side users does not mean that the company can do it once and for all. If customers are not continuously satisfied with the products and services during the service period, then the expiration of the service period means loss, and loss means that they cannot be recalled again in the short term of a few years.

The 80/20 rule tells us that 20% of customers contribute 80% of sales. The number of B-side customers itself is not large. Once 20% of them are lost, it may lead to stagnation or even regression of user or revenue growth. Therefore, how to better serve customers of different natures, especially the 20% of key users, refined operations , namely customer classification management, is particularly important for improving operational efficiency and effectiveness.

1. The value and significance of the customer grading system

Generally speaking, the purpose of customer classification management is of course to maximize customer value and create profits for the company. B-side sales are determined by several factors: customer volume, purchase volume, and repeat purchase volume.

Sales = New Customer Conversion Rate Purchase Volume + Existing Customer Retention Rate Repeat Purchase Volume

The focus of operations varies at different stages: for example, software customers usually go through several stages: demand-contract-delivery-operation-repurchase/churn, which is the so-called funnel conversion process. What operations need to do is to reach as many demanding customers as possible, help sales win contracts from customers through effective sales strategies, deliver satisfactory products and services, provide stable and efficient operation and maintenance services, increase customer repurchase rate, and reduce churn rate.

Proportion of customers at different stages

Therefore, considering customers at different stages, the value of customer classification management can be reflected in the following four points:

Value 1: Increase traffic : For example, by clarifying the attributes of the target customer group and conducting targeted sales activities targeting customers with industry characteristics, the goal of attracting new customers, that is, increasing traffic, can be achieved.

Value 2: Increase purchase volume: For example, if a customer level is upgraded from ordinary to valuable, then the customer can enjoy greater order discounts, higher SLA service guarantee levels and other services, then the customer is likely to replace other suppliers and select one.

Value 3: Increase repurchase volume: Providing different levels of technical support, operation and maintenance services, and other value-added services to different levels of customers will improve customer satisfaction and thus increase renewal rates.

Value 4: Reduce churn rate: Usually, the failure rate of customers during the service period is too high. If each service request is not responded to in a timely manner, customers will question the overall strength of the company, and the risk of churn will increase. Through tiered system management and differentiated services, the churn rate can be reduced.

2. Analysis of customer classification system design requirements

1. Customer perspective

High-value customers have high requirements for the authority, professionalism, and reliability of service providers, and have high demands for product performance and service quality. They even hope to cooperate with enterprises to bring about brand value, platform cooperation, and significant improvement in corporate efficiency. Therefore, for high-value customers, enterprises should allocate the best human and material resources to carry out service maintenance.

As for ordinary users, they are more concerned about whether the price is more favorable than that of other service providers. In this case, we can attract them through price. Motivate purchases by designing flexible sales incentives.

2. Product perspective

The company has dozens of products spread all over the country and often adopts unified management measures. By classifying and analyzing the product demands of customers at different levels, we will find that the 80/20 rule still applies to products, with 20% of products contributing 80% of sales. For example, users at the top of the pyramid often need cash flow products and value-added service products, and their acceptance of new products is relatively high. Some small customers, due to their price sensitivity and tendency to be conservative, are willing to choose very mature products of the past, because these products are mature, have low development costs and low prices. However, these products have high operation and maintenance costs and high failure rates, and therefore need to be gradually eliminated. Take the product management in the field of Internet network infrastructure where I work as an example:

Cash flow products: They are often T3+ or above data centers in first-tier cities, because most Internet companies’ businesses are covered in first-tier cities. However, Beijing, Shanghai, Guangzhou and Shenzhen are also battlegrounds. As more and more homogeneous computer rooms emerge, what products need to consider is how to optimize operation and maintenance services and reduce failure rates, such as developing intelligent information service platforms to enhance user experience , and enabling users to achieve global control of overall resources by realizing real-time monitoring and on-demand allocation of resources and equipment, thereby maintaining high customer stickiness.

Value-added service products: For example, based on the business development characteristics of Internet customers, we provide cross-border dedicated line services, fiber-optic dedicated lines, and high-defense security protection products. The business is often widely distributed, and there is a large demand from customers in the financial and gaming industries who have higher user payment security. Therefore, we can combine the characteristics of customers in these two industries to provide targeted value-added service products.

Products with excessively high maintenance costs: For example, some old computer rooms and data centers with older facilities and higher failure rates should develop corresponding new product resources based on the needs of customers at different levels to implement a gradual transfer strategy.

New products: such as new cloud data centers, security protection product upgrades, and SaaS operation and maintenance platform services, to achieve product upgrades based on new upgrades in customer business models.

3. How to design a customer grading system?

First, clarify the purpose of this customer classification system:

1. We hope to reduce customer churn rate, especially high-value customers, by implementing customer tier management, retain old customers and increase sales;
2. We hope that through the customer grading system, the sales team will understand the company's product positioning and development direction, and what type of customers we hope to develop;
3. Clarify the rights and interests of customers at different levels and improve the service level before, during and after sales.

Then, combined with the existing business characteristics and customer volume, we can try to classify in a quantitative + variable way, such as:

Quantitative indicator evaluation table

Generally, defining customer levels by contribution value is the most effective method. However, we cannot only consider contribution value. After all, some customers may not have large order amounts in the short term, but may have high growth potential in the future. Therefore, we should also pay attention to the overall customer operations, including the diversity of needs, relationships, operating levels and other aspects to achieve a comprehensive assessment.

Variable evaluation index table

The basic level is determined by the customer's order amount, and then an overall assessment is made through the addition and subtraction of variables. For example, the order amount of customer A is 500,000 yuan, the basic score is 10 points, and the level is E ordinary customer. However, through a survey of the customer's overall business level, it was found that the customer has successfully recommended 2 customers and has a wide range of business needs. As a non-listed company, it has a high valuation and great potential in the future. Therefore, we use the addition items and the customer's final value score is 35 points. Then the customer level can be upgraded to a D potential customer, and the corresponding service level must also be upgraded.

Then, after having the basic rules for rating, it is necessary to regularly track changes in customers of each level, make targeted updates, and adjust the current customer rating indicators. In short, customer rating must always comply with market development laws and the company's product strategy.

4. Equity Design

Different from the membership system of C-end products, the growth and appreciation of membership level is not achieved by accumulating growth value through logging in, shopping, evaluating, and posting orders, thereby enjoying different rights and interests.

The B-end customer grading management system is mainly designed around customer quantity, purchase volume, and repeat purchase volume. The assessment of customers is mainly designed based on a comprehensive consideration of the customer's overall purchasing behavior and the growth potential indicated by the company's business management. At the same time, the rights and interests of different customer levels are also designed around the key steps of the conversion funnel: demand-contract-delivery-operation and maintenance-repurchase/churn. Each key node is listed to promote conversion points, and conversion is driven through different service levels.

Customer Benefits Table

In fact, many B-side companies currently do not have a complete customer classification management system. We are also piloting this classification method within the company. Judging from the results of the six-month trial, the customer churn rate has decreased by 15% compared with the previous year, and the overall efficiency of the customer operation and maintenance service team has increased by 30%.

The design of each customer tiering management method needs to be based on the company's development status and the product stage, and constantly updated according to changes to ensure effective customer growth.