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In this episode of Customer Service Secrets, Gabe Larsen is joined by Al Hopper, the principle consultant at Nagurra Networks. Al has had a variety of work experience in his career. He started as a team builder and then acquired different positions while working at Citi for 12 years. After Citi, he started his own company focusing on social media customer service and he is now the only consultant for Nagurra Networks. Al has a particular expertise in helping businesses grow and he applies those kinds of principles into helping others understand tiered customer service. Al and Gabe discuss what tiered customer is, when it should be applied, and common application challenges. Listen to the full podcast below.
Defining Tiered Customer Service
Tiered customer service is the practice of having different customer experiences based on different groups of customers. This can be reflected in subscription memberships or areas where people pay more to get greater benefits. Al mentions that Amazon Prime is an example of tiered customer service that most people are familiar with. To help us better understand the definition of tiered customer service, he relates the following experience from his time at Citi:
“And even at the bank we had … we call the Citiblue Customers and Citigold Customers. The Citigold Customers just were larger depositors, larger spenders, and you’ve got to treat them a little differently. Their social aspect is a little different and so they require a different level of service. It doesn’t mean that your base service has to be wrong or has to be bad. It’s really just understanding that you’re going to take a little better care of the people spending a little bit more money.”
Which Types of Businesses Should Have Tiered Service Experiences
While tiered customer service works well for banks, Al states clearly that it is not always necessary. “You definitely don’t need to have it for everybody. When you think about going to a restaurant, do you pay more to sit somewhere special? Do you pay more to get the same food? Absolutely not.” All businesses are going to have elements of customer service to help maintain their customers, but not all businesses types require tiered customer service to do that. Software companies and e-commerce businesses such as Amazon and banks are great examples of companies that would benefit from tiered customer service.
Where Businesses Often Misstep and Other Challenges
One way that companies often misstep when creating tiered customer service is in the people that they hire. It is essential to hire and train employees to handle different levels of customer service without making the base level a sub-quality experience for the customer. Al states, “You might want to hire a higher educated or better spoken individual for your higher level customer support because you’re going to be talking to higher educated, higher levels of customer base.” That simple example will guarantee that not only the base level customers get quality agents and quality servants, but also the higher tiered customers are getting the level of service they are paying for.
A challenge for businesses with tiered experience is maintaining the understanding that even the base customer is a human being and that their experience is valued by the company. “Even the little guy pays the bills,” Al states. Too often businesses walk all over their base customers or brush their needs to the side just because they aren’t the highest paying customers. We need to remember that every customer matters to the company and they deserve quality service, regardless of how much they are paying and the product benefits they may be receiving.
To learn more about the evolution of the customer support experience and how that affects businesses, check out the Customer Service Secrets podcast episode, and be sure to subscribe for new episodes each Thursday.
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Full Episode Transcript:
The Power of Tiered Customer Service with Al Hopper
Intro Voice: (00:04)
You’re listening to the Customer Service Secrets podcast by Kustomer.
Gabe Larsen: (00:11)
Welcome everybody to the podcast. Today we’re going to be talking about tiered customer service, how it works, how you should think about it, why you should be thinking about it. And to do that we brought on Al Hopper. He’s, right now, principal consultant at Nagurra Networks. Al, thanks for joining man. I know you’re kind of in some, doing some moves and things like that, but appreciate you jumping on and how are you?
Al Hopper: (00:32)
Yeah, man, I’m doing great. I appreciate it. Thanks for having me.
Gabe Larsen: (00:35)
Yeah. Yeah. I think this will be a fun talk track. So I introduced you just a little bit, but you got a fun background. Can you tell us about some of the things you’ve done in customer experience and a little more about yourself?
Al Hopper: (00:45)
Yeah sure. I’m a team builder by trade, spent 12 years in a variety of roles at Citi, left there to start a company that focused on social media customer service. Really fun opportunity there. Had to take some personal time off to work through some things with my kids. You know, family’s super important for me.
Gabe Larsen: (01:11)
Yeah I know all about that man. I’ve got a couple myself.
Al Hopper: (01:12)
Yeah. Yeah. So, from there, I just kind of moving in between things as I try to figure out my own personal brand with Nagurra Networks as a consulting agency of one. So kind of a solopreneur and building out teams, upscaled teams pretty well and pretty quick. Some of my other roles, we scaled a customer service campaign for a BPO from 30 people in January to 200 people in September.
Gabe Larsen: (01:46)
Wow. Wow.
Al Hopper: (01:47)
And that was with hiring obviously then also promoting from within trying to keep that balance of promoting successful agents to team leads, QA and even created a subject matter expert team is kind of that middle layer and career progression.
Gabe Larsen: (02:05)
Wow. Yeah, we might have to bring you back on to talk about scaling a team like that from zero to a thousand or whatever that number was.
Al Hopper: (02:11)
Yeah. It’s a fun challenge and you’ve got to have the right people, the right thought process in place, you know? And then, I did some time with Black Rifle Coffee, then I’m going to call them out by logo. They just, they’re a great brand. I’ve been a big fan of theirs for years. Another organization that is scaling wildly. So yeah, it’s been fun. I love building teams, building processes, and really focusing on that.
Gabe Larsen: (02:42)
That’s so exciting, man. Well, that’s a lot of experience. Again, I love the scale conversation. Maybe, we should’ve went down that path, but again, maybe we’ll do it at a different time. Wanted to talk a little about tiered customer service. I think this is an interesting one. Just big picture for people like myself or maybe a little more rookie-ish, define it. How do you think about tiered customer service? What is it?
Al Hopper: (03:03)
Yeah, so there’s a couple of different ways that I look at tiered customer service. I don’t always look at it as a bad thing. but sometimes you do have to pay more to get more. And when you’re talking, especially as a service software, as a service like Kustomer, you’ve got sometimes a freemium model or a real base model to get entry people in. Got a certain population that needs your product, but doesn’t need all the bells and whistles.
Gabe Larsen: (03:32)
Right.
Al Hopper: (03:32)
And then you’ve got other larger customers that want to spend more, to get more. And even at the bank we had that, we had what we call the Citiblue Customers and Citigold Customers. The Citi Gold Customers just were larger depositors, larger spenders, and you’ve got to treat them a little differently. Their social aspect is a little different and so they require a different level of service. It doesn’t mean that your base service has to be wrong or has to be bad. It’s really just understanding that you’re going to take a little better care of the people spending a little bit more money.
Gabe Larsen: (04:12)
Yeah. Does this mean that — sometimes I think people say that well, does that mean my basic customer service is bad, or — and now I’ve got this kind of expert experience or I’ve got this expert service. So maybe just one click down on this with a simple question, should everybody have tiered customer service?
Al Hopper: (04:38)
No, you definitely don’t need to have it for everybody. When you think about going to a restaurant, do you pay more to sit somewhere special? Do you pay more to get the same food? Absolutely not. Right now, as a repeat customer, you might tip a little bit better over time. The waitstaff are going to start fighting to have you in their section because they know that they’re going to take care of you. You’re going to take care of them. Right. But at its base level, you walk into Chili’s, you’re going to get regular seats, just like anybody else, regardless of who you are.
Gabe Larsen: (05:12)
What? Not me man. When I go into Chili’s I’m like a regular there.
Al Hopper: (05:16)
Well, you’re the reason I’m talking about —
Gabe Larsen: (05:22)
I do like Chili’s actually.
Al Hopper: (05:24)
Think about it that way, you go to the gas station, are you really getting any premium service just because you might be buying the premium gas? No, not really. You probably still have to pump it by yourself unless you live in New Jersey.
Gabe Larsen: (05:36)
Right. Which I do.
Al Hopper: (05:38)
I still can’t believe that they still have folks out pumping gas.
Gabe Larsen: (05:41)
Oh man. I totally forget. You know, it’s funny because I’ve spent some time in New York, maybe 15, 20 years ago. And I didn’t come out to New Jersey I don’t think very often. And I went to get gas and I was like, just like in the movies. I know this is like not having anything to do with what we’re talking about, but well, it does a little bit it’s customer service, but honestly this guy comes up to my truck, up to my car and I’m like, I’m new in the area. And I’m like, what’s this guy doing.
Gabe Larsen: (06:09)
And he’s like, Hi, can I help you? I’m like you can back away from the vehicle, sir.
Al Hopper: (06:16)
In your traditional New York accent.
Gabe Larsen: (06:21)
No, but it was — that’s funny you brought that up because that literally happened to me within the last 48 hours and I was a little taken back, so they do do it in case you’re wondering. Yeah, they definitely —
Al Hopper: (06:32)
One of the last vestiges of freemium service.
Gabe Larsen: (06:35)
Tying it back into the talk track. I didn’t, I wasn’t a repeat guy, so I didn’t get anything special, but they did pump my gas. So good for them.
Al Hopper: (06:44)
Yeah. And I mean, and that’s again, an example of “Is tier customer service for everybody?” Absolutely not. You think of a bookstore. You’re not going to get tiered customer service, except maybe when you check out if you’re a member of their club, because then you might get a discount on a book, but otherwise, you need to ask someone where in a bookstore it is, they’re going to help you regardless because they’re just trying to sell you product.
Gabe Larsen: (07:12)
So, then on the flip side, what, I mean, having done this multiple times and played around with this, is there certain aspects of a business that you would say, Gabe, if you’re a company like this or if you’re kind of doing this or, I would encourage you to think about a tiered even if you have — who is it right for then?
Al Hopper: (07:31)
So obviously anything as a service that does a tiered product rollout. It’s something that you have to kind of bake into the costs. If you’re — and I bought software a lot over the last couple of years as I’ve scaled different organizations and you want to try to get the best bang for your buck. And so you’re looking at, maybe I get like the mid level software package because that’s what I need, but I really need someone as a product specialist to come in and build out my instance for me. So do I upgrade with the platform to get that, or do I buy the middle part of the platform and go with one of their preferred partners to do it where I still end up spending about the same amount of money, but maybe the partnered service is a little bit better than the baked-in premium service. So that’s an opportunity for definitely tiered service coming into play. Subscription models, I think are a big win there too, right? Having worked with, again Black Rifle Coffee, amazing product, very tribal with their organization and their fan base.
Gabe Larsen: (08:45)
And they have a cult-like following, a culture.
Al Hopper: (08:49)
Exactly right.
Gabe Larsen: (08:50)
A positive. That’s meant to be positive.
Al Hopper: (08:52)
I think any company that can aspire to that. It’s huge.
Gabe Larsen: (08:57)
I love that. Somebody said it was, I think Russell Brunson, he’s an internet marketer, but he used the word cult-ure, cult-like following. So I think of that as a positive word, but yeah, you’re right these guys, they definitely got something going on.
Al Hopper: (09:11)
So, I mean, when you think about a subscription model for coffee, for Amazon Prime; that’s a subscription model and you get a little bit more for paying a little more. You pay a small nominal fee for the year. Right. And it gives you access to all these other things, free upgraded shipping, you get your free video. Those are things that are tiered customer service. You don’t get if you don’t subscribe.
Gabe Larsen: (09:39)
Yeah. That makes sense. That makes sense. How do you — I want to get into some of the, maybe some of the benefits of tiered in just a second and maybe some challenges. But, having done this before, what are some of the tactical things you’ve done or found that need to be done in order to have a successful tiered model? Anything come to mind on the structure of the process, the technology, the people, anything in those areas?
Al Hopper: (10:07)
Yeah. Well, you definitely have to have a software, a CRM platform in place that can identify [inaudible]. Whether it’s as simple as tagging a customer account, I’ve seen that happen, or providing a special toll free number that kind of routes to the head of the line. There’s a couple of different tactics in place. You have to — one is identify what it is you’re trying to provide at that extra level. What’s the extra benefit? Someone that’s a preferred customer should get preferential dial ins, go to the head of the line for service. Does that mean 24 hour support? Maybe, maybe not. It depends on what you’re doing. Most internet companies, I think most e-commerce companies need to be 24 hours at some point at some level because that’s why you’re on the internet, not surrounded by regular business hours.
Gabe Larsen: (11:16)
But I mean, that’s where we are, right? This is getting, it’s also a little bit of a rabbit hole, but yeah, it’s just customer expectations. I mean, that’s a little bit of a generic statement to say they’re changing, but yeah, everything — 24 hour, you need to be available when I’m available.
Al Hopper: (11:33)
And you set expectations, you have the autoresponders that say we’ll get back to you in regular business hours or between these hours or call back between these hours, whatever. That’s okay to start. But you really have to have a plan on how to, I think, get better. Now, if you are a grocery store that’s only open from 9:00 AM to 9:00 PM, you don’t need 24 hour service.
Gabe Larsen: (11:59)
Right.
Al Hopper: (11:59)
It doesn’t matter if someone’s milk expired before they got home at midnight. Right. So it really doesn’t matter. But if you are a software company that’s supporting other companies —
Gabe Larsen: (12:11)
Or international, yeah. You got to kind of find that balance. What do you do on the agent side? I love the process. You kind of tag it, maybe get a different phone number. Do you often find that you will give your best agents to kind of those gold, blue ribbon, 4 star–?
Al Hopper: (12:28)
It depends on what the business is. So, you can innately train and hire for that senior level support if you’ve got a basic business and I’m gonna go back to my time at the bank. Banking is banking, pluses and minuses, debits, credits, earned interest.
Gabe Larsen: (12:54)
I worked at a bank. I can vouch for that.
Al Hopper: (12:56)
It doesn’t matter if it’s a dollar or a hundred dollars other than scale. So you can hire, certainly, for a concierge person there because once that person has that basic understanding of the product, then you’re good to go. What the difference there might be is, you might be hiring for a different level of empathy or different level of communication skills. You might want to hire a higher educated or better spoken individual for your higher level customer support because you’re going to be talking to higher educated, higher levels of customer base. Now if you are a service organization offering a variety of different complex services, let’s say even like video surveillance, you’re going to be talking to different levels of companies that are spending different types of money with you. And so you’re going to probably, at that point, want to assemble your team of Avengers and bring in the best of the best. Similar to when I was building out and supporting the social media team for the bank, we brought in some of the best from other departments, from all the different departments within retail because social media is a level of tiered service, whether it’s innate or by design.
Al Hopper: (14:21)
So you want to have that group of masters that you don’t have to spend time and reach out to the deposit team or the money laundering team or the mortgage team. You want to have someone there that knows all these things that can respond immediately.
Gabe Larsen: (14:37)
Got it, got it.
Al Hopper: (14:39)
And so it really depends on what it is that you’re trying to get at. You can train, obviously your product knowledge is huge but, think about what it is that you’re doing like software as a service, right? As a platform, you’re building out, you’re giving your customers the tools basically. And a lot of times, you as a customer have to build your own tools. So here’s your toolbox. And then you figure out which apps you want to put on it, you figure out how you want to sign it, right? Now at a low level, here’s your toolbox go away, right? Just give me a little bit of money and have access to my toolbox. I mean, that’s business. That’s really what it is, right? You’re not paying me a lot. You’re just paying me for access. Now, you need some more support. You need someone to build your toolbox for you or put the right tools in there. You’re getting into pay a little bit more, a bigger toolbox, more seats. You’re going to need a little bit — more resources.
Gabe Larsen: (15:40)
Where do you find people go wrong in building a tiered structure? I mean, you give us some of the things you need to look — probably best practices. There are certain areas where like, Gabe, I’ve seen this five times, the place where people go wrong or the challenges people run into are here.
Al Hopper: (15:58)
Yeah. The biggest challenge is I think forgetting that you are a service organization to begin with and they start focusing on the tiered customer service, get away with everything. Just because I’m daddy Warbucks and I’ve got a million dollars in your bank, doesn’t mean I can just walk in there and start slapping people around. You can’t just start cussing out the little guy on the other end of the phone because you think you have a little bit of money. I think also, missing the point, you know, and I look at SaaS companies this way, right? You are providing the bones and you are providing the platform, but you aren’t providing that higher level of support that maybe someone needs and you just haven’t identified.
Gabe Larsen: (16:46)
That’s, it’s a fair point. Especially in SaaS, we run into that problem often. I think you’re better in the consumer brands. They’ve found a way to match the level, or tiered structure a lot better. I’m not sure exactly why that is. Maybe we’re just a little behind the game.
Al Hopper: (17:03)
Well I think it just goes back to what your base competency is. Your base competency is building an amazing platform. And it’s, you kind of show it off a little bit when you’re doing the sales, you kind of do webinars, you kind of do podcasts, but you’re not really spending the time to teach anybody anything. And I think that’s where the sticky services become part of that tiered service. If you, as a software, as a service company, SaaS, if you were to just slow down and go, “Okay, if I spend an extra $2,000 here on this customer that just signed an annual contract, to teach them how to do what they need to do,” then that’s a higher level of service than someone who just signed a month to month contract for $300 a month that may or may not be here six months from now.
Al Hopper: (18:03)
But at the same time, the opposite could be said, going back to your challenges. And this is where my customer service background starts clashing a little bit with the concept of tiered customer service. Even the little guy pays the bills.
Gabe Larsen: (18:15)
That’s right.
Al Hopper: (18:16)
And so, how much money are you spending, marketing, bringing on that customer that is going to be month to month, that is going to be buying that small package, and then supporting them by giving them access to email support, but not chat support. Or, maybe you get chat support but you don’t get account management.
Gabe Larsen: (18:35)
Yeah. You start to, It starts to get a little, a little dicey there. Interesting talk track Al. It sounds like you’ve been around the block a few times on this. Now I want to shift and go into a little bit of that scale again. We might have to bring you back some other time. If someone wants to get in touch with you or learn a little bit more about your thoughts on tiered service models, what’s the best way to do that?
Al Hopper: (19:00)
Right now it’s probably on LinkedIn. So LinkedIn/in/thealhopper I think is what the premium link is. Twitter is good as well. I’m hitting one of those tiers of relevancy. Yes. And so that’d be @Alhopper_ just please make sure you keep the underscore. The guy that beat me to my name gets really angry when people tweet him instead of me.
Gabe Larsen: (19:35)
Hey man, it’s all about customer experience and you’re not delivering a very good customer experience Al.
Al Hopper: (19:40)
Well, you know, that’s what happens when you’re late to the show.
Gabe Larsen: (19:42)
That’s right. Well, no man, I appreciate you jumping on. It’s a fun talk track. I think it’s very important, very relative as we try to find different ways to differentiate our customer service, customer experience. This tiered model I think is probably more relevant for more companies than I think people think. Sometimes it’s like this isn’t for me, I think that was the point you’d probably want to double check that as it might actually be for you. So again, Al thanks so much for joining and for the audience, I hope you have a fantastic day.
Al Hopper: (20:10)
You got it my friend. Thanks. Have a great one yourself.
Exit Voice: (20:20)
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