Permit me to take you through a random muse on customer management and the kind of relationship you should have with them.
I will be introducing you to two renowned models that you may have come across.
But first let me make these assumptions upon which the first framework/model is built upon:
1. Not all customers are profitable
2. Your business shouldn’t be set up to satisfy everyone
3. A loyal customer is not necessarily a profitable customer and vice versa
4. Your resources as a business is finite. Thus, it makes a business sense to primarily focus on those that are both loyal and profitable
Now to the first model
This model, which was developed by Reinartz and Kumar is called the Customer Relationship Groups. It helps you to classify your customers into 4 major groups as shown above.
The model also helps you to effectively build a relationship with the Right Customer or pivotal customer.
There are two major variables that are used to classify your customers:
- Profitability Vs Loyalty
Each of this variable could be high or low. Thus, a customer with a high potential to bring in revenue and/or increase your profitability but with a resultant low loyalty is called:
Butterflies
Butterflies make you money but aren’t loyal.
Strangers
have low profitability and low loyalty
Barnacles
have high loyalty and they are loyal to your brand but they bring in low revenue.
Lastly
True friends
have the potential to make you high revenue and they are also loyal to your brand.
Now every organisation has these different types of customers. It could be even related to your employees.
The big Q is:
How do you manage each of them ? How do you ensure that your finite resources are effectively and efficiently met?
How do you achieve synergistic effect?
The model below will help answer this in synopsis.
This is the stakeholder’s analysis model that was primarily introduced by Mendelow to classify and manage your various stakeholders.
A stakeholder meaning anyone with a conceivable interest in your business e.g, shareholders, staff, suppliers, customers etc.
Strategies to manage your customers based on the stakeholder analysis
- Butterflies = Keep them satisfied
2. Strangers = monitor (exert minimum effort)
3. Barnacles = keep informed through your marketing efforts or various customer touch points
4. True friends = manage closely. They are your golden eggs.
End of random musing.
