All customers are created equal. Yeah, right. And the cow really did jump over the moon.
Customers come in all colors and sizes – and revenue and profit levels.
An essential component of managing customer relationships is customer-centricity. I am almost as tired of saying it as you are of hearing it. Yet, the part that is often left out of that discipline is segmentation. As in, which customers should we focus on? Take a look a this picture.
This is a traditional distribution of customer segments. Obviously, yours may be slightly different – have more layers or fewer, different percentages, etc (you do have one setup for your organization – right?) – but the concept remains the same.
Most of your revenues will come from your VIP customers. There is a second, smaller, layer of “Hopefuls” – customers you can convert to VIP if you put some work into them, and then there is the whole mass of “Lost Cause” – customers that may be able to climb to Hopefuls or VIP, but most of them will remain customers that don’t spend lots of money.
Bottom line: if you want to get an ROI from your customer-centric initiatives you have to focus your efforts where there will be a return.
Are you basing your customer-centric strategies on your VIPs and Hopefuls? Why not?