There are four principles of building the right customer at the right time just like –
- True friends
However, Short-term and long-term clients are divided into horizontal and vertical axes to represent predicted loyalty and profitability. These four categories are sorted using the Customer Relationship Groups grid.
In the context of customer relationship management,
People who aren’t familiar with you have a poor possibility of for-profit and loyalty. Why?
The reason is the distance between the company’s offerings and the requirements of the strangers is too wide. They are not profitable because they don’t fit their product line. As a result, the relationship management plan for strangers is fairly straightforward –
“Don’t invest anything in them, which means that strangers should be abandoned right away.”
Butterflies are better company than strangers. These could be profitable, but they’re not particularly loyal. What does it mean? If you look at it from a more macro perspective, butterflies have wants that can be met by what the firm offers. On the other hand, Butterflies display their darker side like –
“We only get to see and appreciate them for so long before they’re gone.”
As a result, it is extremely difficult to establish a long-term relationship with butterflies. When this is attempted, it is rarely a success. A good relationship management method lets the corporation enjoy the butterflies while they last, as long as they bring in revenue. Transactions that are profitable and satisfying should be made as quickly as feasible to maximize value extraction. Finally, if they lose money, the company should stop investing in them.
In contrast to strangers and butterflies, Barnacles are extremely devoted to one another. However, they aren’t making a lot of money. Only a very limited match exists between barnacles’ requirements and the company’s offerings, indicating that they make no full or even big partial use of its products.
However, they do it over a lengthy period and regularly. Many modest bank account holders who deposit and withdraw money regularly do not create enough revenue to pay their account’s maintenance fees. This is an example of a “barnacle.”
They are customers and loyal ones, but this does not imply that they are desirable or even desirable customers. Customers devoted to a firm for a long time, like barnacles, can be a major headache for the business owner. To maximize income, the firm’s relationship management plan calls for increasing the number of times they are sold, boosting fees, or even decreasing the level of care they receive.
Even if barnacles can’t be made lucrative, which is typically the case; they should be removed from the ship. Due to their continued patronage, this may prove challenging. In most circumstances, firing someone is the only option.
4. True Friends
Finally, we come to the point where we may call ourselves True Friends. True Friends are a firm’s best clients out of all the many kinds of consumers a company might have. Why? As a result, they are more successful and loyal than the other three groups. The company’s offerings and needs are a perfect match.
As a result, the company should aim to acquire and cultivate long-term friendships with its clients. Customer happiness is the goal of the relationship management approach, which necessitates constant investment in the connection. Having a solid foundation to build can help turn true friends into ‘true believers,’ which is a desirable outcome. Customers who become true believers are the most valuable to a company because they return frequently and spread the word about their excellent experiences with the brand.
The correct customer relationship management approach can be selected for each of a company’s Customer Relationship Groups based on these principles. Consequently, it can cultivate the proper kinds of connections with the right kinds of clients.