Scoring a new customer makes us feel we’re winning with our SaaS business. But, unfortunately, the feeling of victory is often short-lived.
Closing the deal is one thing. Creating a fan is another thing. So although it might be that we can help them functionality-wise, still, only some customers turn into a fan. And that’s impacting our ability to scale.
Here’s the thing
Ill-qualified customers hurt the business more than we often want to acknowledge. I refer to this as the trickle-down effect.
- We want repeatability, but these customers will always remain exceptional cases
- Fans value our platform for what it was built for, but these customers resist seeing that as valuable
- Fans rave about the peak moments they experience, but these customers moan about all the gaps
As such, this is what happens next.
- Your R&D department is distracted trying to fill the unfillable hole of requirements from exceptional cases.
- Your Customer Success team burns valuable hours trying to please customers who will only be partially pleased.
- The slickness of your solution, loved by your fans, gradually blurs into a monster, dropping CSAT rates and compromising CLTV.
I don’t have to tell you what happens next… unpopular measures.
It all starts by recognizing this. The trickle-down effect is real – and it takes guts to address it. But doing so is a win-win for everyone: Your business, customers, and investors. The only ones that will hate it are your competitors.
Question for you to reflect upon:
On a range of 1-10: How’s your ability to scale impacted by customers that you shouldn’t have accepted in the first place? What could you change today to turn the tide?
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