SaaS Customer Success: Is Every Customer a Good Customer?

by Chris Arringdale Customer Success, Proactive Solutions

It’s always a great feeling to get a new customer, but are all customers a good fit customer for your organization? Believe it or not, there is such a thing as a bad-fit customer. The question is, do you know what makes a bad-fit customer?

Determining the criteria that makes a bad-fit customer is a great first step for SaaS companies. It starts with the sales team knowing these criteria and carries over to the customer success team.

When creating a business with a low customer churn rate, which is designed to move customers along their customer journey, you must have customers with success potential. These customers see your product or services as valuable or can potentially help them succeed. Customer success begins by gaining customers with the potential for success.

#CustomerSuccess kicks off with bringing in clients with success potential. @kilterly can help you determine who is a good customer, a bad customer, or someone you’re stretching for. Read more: Click To Tweet

However, many SaaS companies assume they’re just starting out and need to take every customer that comes their way. This is a valid concern, and there are certain circumstances where you can make exceptions and customers will work out. Although, it’s crucial to know when you’re pushing those circumstances too far and when you’re just trying to cover up a bad-fit.

Let’s jump in and take a deeper look into who good fit, bad-fit, and stretch customers are.

Good Fit Customer

You won’t find a universal definition for an ideal or good fit customer. A good fit customer is the dream customer with success potential your organization is targeting. Each company should come up with their own definition and criteria for their ideal customer and modify it regularly as their situation changes.

Now that you’ve got your ideal customer defined, you can find customers with success potential and deem them as a good fit!

Bad-Fit Customer

Knowingly acquiring bad-fit customers significantly hurts an organization’s customer success efforts. Your relationships with these customers are doomed from the start and will never let your desired outcome be achieved because they don’t have success potential at that time.

Bad-fit customers won’t find value in a relationship with your company at the moment or in the near future. This could potentially change in the future, but acquiring them now is not ideal for either party and the client is bound to churn.

In relation to customer success, passing on these customers, for now, is the right path. Your sales team may be able to go back to them later, if or when they’re a better fit. It’s a better option than to sign, churn, and burn them today.

Stretch Customer

Stretch customers are those who could get initial value from a relationship with your organization and be given a future value timeframe which works for both parties involved. With that in mind, you must be certain this “future value” is worth delivering. Will it be valuable to more than just this customer? Can it hurt your overall customer success? Will your efforts be rewarded?

These questions need to be asked in order to decide if they’re really a stretch customer or if they’re a bad-fit in disguise.

Good Fit vs Bad Fit - Where do your #customers fall? Discover more with @kilterly’s latest blog: Click To Tweet

Often times, it’s worth taking the chance to stretch customers, assuming you’ve given them an honest estimate on the future value you can provide them.

Provide a clear definition of where the “stretch” ends and how it is helpful in making other customers successful, in order to prevent any potential one-off “stretches” that end up being a distraction.

A bad-fit customer will never be right for your business, but they could move out of this title a year down the road. A stretch customer could end up being a great fit in the future, depending on your company’s goals and roadmap.

Acquiring good fit customers is a crucial part of maintaining great customer success. Need to check in and keep up with where your current customers fall? Take a live demo with Kilterly to see how we can help you!

worker taking notes on different customer metrics

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