What Are Tier One and Tier Three Customers?

Many businesses will use a tier system to classify their customers and help employees learn which customers deserve the most time and attention. Being a higher-tier customer means a business sees that it can make more profit from you -- it isn't worried to cut you special deals to get more products and services into your hands. Many businesses use the tier system even if they won’t openly admit or tell you what tier you belong in.

Tier one customers are the lowest level of customers. When companies classify someone as a tier one customer, then they consider the person a low-grade customer, who can easily cost the company as much as the company can make off of the customer. Tier one customers are often customers who repeatedly call in with fake complaints in an attempt to get discounts or free stuff from the company or harass the company in other ways.

Tier two customers are the bulk of most companies' business. Businesses say that the hardest sale is to first-time customers, which is why tier two customers are so important. Tier two customers are customers who return to time and again to make both large and small purchases. Businesses sometimes name tier two customers the loyal customers, and businesses usually spend most of their time and assets trying to appeal to this group of customers.

Tier three customers usually make up a very small percentage of a business’s customer base as these are the lifetime customers: customers who are not only loyal, but have no problem spending or investing in your company. Tier three customers are often eager to expand their existing services, and buy brand new products from your company.

Many businesses use a tier system for marketing and promotional periods. For example, when a company looks at customers that have “turned over” or stopped buying from them, the tier of the customer will often affect what the company does or how the company approaches the situation. If a tier one customer left, then the company sees that customer as a hindrance and no real loss; if a tier three customer leaves, then the company will often look into what new methods or products it released to cause the customer to leave.