In any market, there are different kinds of customers. They are Core Customers, At-Risk Customers, Non-profit Customers and Spinners. Many a times you find a number of companies that treat customers like kings. A famous example is that of Nordstrom store accepting a set of tire chain from someone who claimed to have bought it from there even though they do not sell tire chains. What most of us do not realize is that these customers who receive such royal treatment are not the Non-profit Customers or the Spinners but they are the Core Customers and At-Risk Customers. A lot of business who portray an image of treating and believing Customers as "Always Right" focus only on these target customers.
If the same situation had a non-target customer the treatment would definitely have been different. In today's Global Market business ascertain the lifetime value of customers and Classify customers into target customers and non-target customers. The focus is primarily on target customers who generate most of the profit. There are few others who look at the other segment that is the non-target customers. These business look at non-target customers as potential untapped market. Of course to compete in these two environments, it is important for each kind of business to have the right business model that suits the kind of market they are looking to serve.
A business which is competing to serve the non-target customers cannot have the same business model as that of a business which serves the target customers. Bottom feeding businesses should have a business model that is more economical, cost effective and efficient to attain success in that environment. Similarly business that target core customers cannot adopt a business model that is used by bottom feeders. They have to spend more on marketing costs and customer service to attract and retain customers mainly because they are competing in a market where customers are used to this kind of services. Pros and cons Looking at all segments as important is necessary for businesses. Most of the time, all customers need to be managed to produce an acceptable Net Present Value.
With so many alternatives for every product or service, if a business targets only the core customers, it could loose out on a huge market. It is important to calculate the average lifetime value of these customers before making sure of not targeting them. It is essential to look at all customers as potential profit generators for the future value of the business. There are disadvantages of looking at all customers as right. Irrespective of whether the customers are adding to the profit of the business or not, every business has to spend a lot of time, effort and money to keep all customers satisfied. Business provide to their customer contact employees Every customer, whether he or she is a core customer or a non-core customer, expects certain services.
It is always an issue if business should provide to their customers contact employees. Suppose a customer has spent thousands of dollars in buying a product and suddenly there is a problem with the product. The last thing the customer would want to hear from the company is a recorded message or an operator saying that they would send someone in a week to fix it. In these cases providing customers with contact employees is of at most importance for generating satisfaction and retention. In some cases when the product or service acquired is cheap and not of much importance, no employee would like a customer to keep pestering him or her to have a look at a few minor glitches immediately. Hence this will always be a debatable issue of whether a business should provide to their customers contact employees..