SaaStr · 2021-09-03 · 1735d

Why Firing 'Problem' Customers Is Bad Strategy: Invest in Support Instead

Jason Lemkin argues against the common SaaS advice to fire unprofitable or complaining customers, contending that complainers often show high engagement and renewal rates. Instead of terminating these relationships, he recommends hiring dedicated support staff to manage demanding customer segments, capturing long-term value through referrals, product insights, and brand advocacy.

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Metrics in this report

ARR Scaling Inflection Point

2$M

threshold

when customer segmentation typically begins

Complaining Customer Segment Size

5-10%

range

percentage of customer base that constantly complains

Customer Scaling Inflection Point

1000customers

threshold

when customer base starts to segment into different behaviors

Minimum Revenue Percentage for Support Investment

5%

threshold

percentage of total revenue segment should represent

Minimum Revenue Threshold for Dedicated Support Hire

20-100$K

range per year

segment annual revenue to justify dedicated support staff

Revenue Multiple Comparison (Premium vs Small)

100x multiplier

minimum

$100k/year premium customer vs small customer annual spend

Support Cost Per Hour (Assumed)

15-20$/hour

range

entry-level support staff hourly cost