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CRM is All About Managing Customers for Optimum Profitability

We have been discussing customer persona, better service and customer centric approach in our earlier articles. Since we know Customer Relationship Management (CRM) is all about managing customer for optimum profitability.

One-size-fits-all:  Definitely you will be agree with me that you cannot send same personalized message to multiple contact/customers. Different customer has different persona and need different treatment. From lead nurturing to Sales and after sale service we learn customer behavior we get use-to a bit with too; but we have give it back for letting the customer know that we understand what he want. Once we make a strong bond with customer we can offer new product and service and ask for word of mouth publicity.

To make things simple, I want to think about how we should treat three different types of customers: profitable customers you can serve well, unprofitable customers you can’t serve well and a largely ignored type, bad customers that nobody deserves.

  1. The Good: Profitable Customers You Can Serve Well : Every company needs profitable customers. Although it varies from industry to industry, approx. 20% of the most profitable customers typically provide 80% of most companies’ profits. What not every manager realises is that although profitability can be influenced in the short-term by increasing prices or reducing costs, in the longer-term it is driven by serving good customers better than competitors. Not all customers though; just those whose needs are most closely matched by the service the company can provide profitably.
  2. The Bad: Unprofitable Customers You Can’t Serve Well: Unfortunately, along with the highly profitable customers most companies have unprofitable customers as well. Although there are many reasons why a customer might be unprofitable, it often comes down to a basic mismatch between their needs and the service the company can provide profitably.
  3. And The Ugly: Awful Customers Nobody Deserves: As anyone who has worked on the front-line with customers will tell you, there is a certain type of customer you can never satisfy, no matter what you do. And within these already difficult customers there is a further subset that become rude and abusive when they don’t get exactly what they want. Nobody should have to accept these bad customers; they are bad for staff, they are bad for other customers, and they are bad for business. Companies have a moral duty to support their front-line staff by giving them permission to refuse to serve customers who step over the line. This is an inconvenient truth for many of those who would have us believe ‘the customer is always right’.