Account Tiers

All companies are tiered using the following methodology. Tiers dictate levels of service for many teams at FareHarbor.

How Tiers are Calculated

• Tiers are calculated on booking fees converted to USD.
• Tiers are calculated on the related level. If one client operates three dashboards, the combined data of all three dashboards is used to create a single tier that applies to all dashboards.
• Extreme weather events will not impact tiers.
• Sales determines the tier of a company when it goes live. After the company goes live, the tier will stay consistent.
• Tiers are reviewed on a monthly basis by Account Operations to ensure that each company always is at the correct levels of service.
• During the big wave onboarding process, you must calculate the projected booking fees to predict tiering. A threshold of $90k is required to go live as a tier 4 to ensure we are not downtiering enterprise accounts.
• There are three categories of companies that get checked; individual companies that are live longer than one year, individual companies that are live less than one year and live related groups. Within these three groups, we outline the criteria for them to be checked every month, which are below:

Companies Live longer than 1 year:

Cohort information:

• Companies live longer than 365 days
• Past their peak season (based on Seasonality – Peak Month custom field)
• Relies on trailing 12BF
• No Tier exception

Review Process:

• If trailing 12 BF shows that the client should be in a different tier threshold than the one they’re currently in (up or down) they will show up as check. These are manually reviewed every month.

Companies Live less than 1 year:
Cohort information:

• Companies live longer than 30 days but fewer than 365**
• Past their peak season (based on Seasonality – Peak Month custom field)

• Relies on ARR Model

  • The ARR Model has two components: historical and forecast. The historical component includes the booking fees that were generated since the company went live. E.g. a Hawaii Boat Tour generated 30K in Jan/Feb/Mar. For the forecast component. The forecast component of the model will estimate how much HI Boat Tour companies normally increase for the rest of the year. If HI Boat tours do really well in Q2/Q3 that will be captured in the forecast. The end-result is a full-year forecast, which is used to tier live <1Y clients appropriately.
    • We also calculate ARR +1Y clients. Here, the model multiples the trailing 12 months Revenue by the growth rate by tenure. So if companies in their second year tend to grow by 15%, all companies in their second year are multiplied by 15%. E.g. if a company makes 10K in the last 12 months, that would become 10*1.15 = 11.5K for the ARR.

• No tier exception

Review process:

• If ARR sum shows that the client should be in a different tier threshold than the one they’re currently in (up or down) they will show up as check. These are reviewed manually every month.
• Outliers: If a client has not passed their peak season but they have already passed their current tier threshold, they will get uptiered.
• Outliers: if a client has not passed their peak season but they should be uptiered by at least 2 (Critical Tier Switch) based on their ARR $, they will get uptiered by 1 tier.

Related

• Companies that are AM-related, regardless of how long they’ve been live and when their peak season (based on Seasonality – Peak Month custom field) occurs.
• Relies on the sum of the related companies’ revenue (column Related Sum)
  • If the companies are over 1 year – we use only trailing 12
  • If the companies are under 1 year – we use only ARR projections
  • If the related group has both companies that have been live longer than a year and shorter than a year we will use a combination of the two. For example:
    • Big Bend Stables live for 7 months with ARR 2373.97 and T12 1862.79
    • Lajitas Stables live for 55 months with ARR 3785.58 and T12 4025.85
    • The related sum we will use to estimate new tier is ARR of Big Bend Stables (2373.97) plus T12 of Lajitas Stables (4025.85)

** Due to COVID-19 w have created two new temporary tier categories to check for downtiering clients. The reason for this is to ensure that our client is not being penalized for the effects of COVID-19, and to only downtier clients if they are underperforming compared to a cohort of companies in a similar type and region.

Live Less than 1 year

Cohort Information

• Companies live longer than 30 days, fewer than 365
• Not Related
• No Tier exception

Review Process:

• If the company has passed its peak month and the T12 BF compared to ARR model shows a critical tier switch (change of two) , they will get downtiered by 1 tier.
• If the company is downtiered from a tier 5 or a tier 4, they will get downtiered by 1 tier

Live more than 1 year

Cohort Information:

• Companies live longer than 1 yearNo Tier exception
• Companies that generated BF $ this year and did not generate BF $ last year (growth rate: 0%) will not be taken into account (unless they are related and other companies do have a growth rate)
• Companies on Hawaii will not be taken into account

Review Process:

• We will compare these companies to a cohort of companies that has
  • At least 20 companies
  • All companies in the same region
  • All companies with the same supertype
  • If a related group of companies has multiple supertype-regions than we follow the supertype-region of the company with the highest T12 BF $

Related

Cohort:

• Companies that are AM-related, regardless of how long they’ve been live and when their peak season (based on Seasonality – Peak Month custom field) occurs.

Review Process:

• If the (related) company’s RB YoY growth % (measured for the COVID-19 time range: March 1 – current date vs 2019) is worse than the average of the cohort and the (related) company in review does not meet the minimum total T12 BF $ + ARR $ that corresponds to their current tier threshold we will review.
• Any groups of AM-related leads that are not all the same tier will be reviewed.

Exceptions: Tier exceptions are tracked in Close in the custom field AM – Tier Note and it represents when a company is tiered higher than their BF calculations because of the relationship of the client i.e. first client, influential name etc. If you believe a client should be added to this list please fill out the form and it will be reviewed.

Tier Thresholds

• Tier 5 – Greater than $250,000 in annual booking fees
• Tier 4 – Between $65,000 and $249,999 in annual booking fees Tier 4 go live threshold is $90,000
• Tier 3 – Between $20,000 and $64,999 in annual booking fees
• Tier 2 – Between $5,000 and $19,999 in annual booking fees
• Tier 1 – Between $1,200 and $4,999 in annual booking fees
• Tier 0 – Below $1,200 in annual booking fees

Changing a Tier

Tiers should only be updated by Account Operations or the Business Intelligence team. If there is an account that appears to be incorrect based on the information above, please submit the Incorrect Tier Review form.