Many people clicked over to my recent article titled “The Customer is NOT Always Right” because they thought they were going to disagree with me; turns out, few people disagreed and it’s actually sparked some really interesting conversations.
In one of those conversations, the question was raised “What do you do if someone is paying for ‘things’ they don’t use and spending more than they need?”
Let me address that.
If you have customers not using your product at all but are paying you for it – and you’re feeling guilty about it – I’ve talked about that before.
But if they’re paying for features they’re not using, that’s different and there are a couple of ways to look at it.
If it’s an add-on piece of functionality that they’re paying for or seats/licenses that are going unused, that could be bad.
Or it could be fine… perhaps they plan to use them and want to ensure access to those as soon as they’re ready. Maybe they decided to include it in the contract or to buy it when they had the opportunity internally, knowing that when they actually need it they may not have the budget/authority to make that happen.
Context is everything.
And good Customer Success Managers will have that context and know whether it’s a good or bad thing. But even without a formal Customer Success organization, talking to your customers (at least the ones like this) might help in learning about their situation.
Unfortunately, many people want to hide from their customers, though, lest the customer remember that they’re paying them… and stop. That’s just a really bad way of doing business in my not-so-humble opinion.
If there are simply features within the core product that the customer is not using, you could feel like they’re paying for more than they’re using… or you could know that they’re getting value that’s congruent with their current lifecycle phase as a customer, their maturity as a business, the market they serve, etc. and not worry about. Again, context is everything.
Frankly, companies over-engineer and build features few people use and then worry when people don’t use them. But when you look into it, you realize those features were created because of only one or a few customers… or by the vendor on a whim.
In other words, they aren’t needed to reach the Desired Outcome for the majority of customers so they aren’t going to be used by… the majority of customers.
That, by the way, is a great way to segment your pricing model… look for those (high-value) features used by the few and carve those out as add-ons or to be included in the higher pricing tiers.
If it’s not that they’re underutilizing the system, maybe it’s just you.
Sometimes we just undervalue what we do for the customer and feel like we’re charging too much.
This happens primarily because we don’t actually 1) understand the customer’s Desired Outcome and 2) don’t know if they’re achieving – or on their way to achieving – that.
Once you realize how your product or service is delivering value to your customers, you’ll probably start to think you’re actually underpricing your stuff!
