Know the Value of Your Customers
By Irene Cherkassky
Treating every customer exactly the same is no longer an effective or profitable strategy, says Michael King, group vice president of Atlanta-based Grizzard Performance Group, an enterprise within direct marketing firm Grizzard Communications Group.
King suggests that both companies and customers are ready for a new approach—Customer Profitability Management (CPM). "This is basically a corporate practice of stratifying customers based on the value they offer the corporation," he describes.
However, although companies are aware of the benefits of this approach, King says there is a reluctance, particularly at the top levels of corporations, to implement this sort of customer strategy due to an ingrained belief that all customers should be treated alike.
To counter that lingering perception, Grizzard Performance Group recently released the results of a survey conducted in May by online survey provider Infosurv. With more than 1,000 consumers surveyed, the study found that more than half of consumers—some 58 percent—say it doesn't bother them when some customers receive special treatment because they provide more value to a company. The survey also found the majority of consumers—79 percent—agreed that they expected special treatment from companies they are especially loyal to, purchase frequently from, or refer other customers to.
The findings, says King, support what his group has experienced over the past 18 months. "We hear loud and clear from customers—and this is covering a lot of different geodemographics—that they don't really have an issue with this [customer strategy]," says King. "They understand that companies are doing this increasingly, and many of them understand why."