Bad Customers, Good Customers: How to Identify them?

If we can identify which customers are profitable, then it stands to reason that you can build a profile of what a good customer looks like.

If you are looking at consumers, you can identify, where they live, what sort of job they have, married or single, age group and so on.

In a purely business to business environment the same exercise can be carried out with perhaps fewer groups. These groups can then be placed in a matrix of good through to undesirable customers.

Several things arise out of profiling customers; likely good customers can be more effectively targeted, freeing up marketing and sales resources because you avoid investing in reaching potential customers who are going to be very expensive to service and therefore not very profitable.

Customer volume, rather than quality, tends to be expensive, as customer service gets both spread thin and ever-more expensive (training, turnover etc) and reduces service quality to all customers, good and bad.

Customer retention declines accordingly. To say nothing of the fact that servicing ‘bad customers’ can push costs up ahead of the income they bring. The profiling also identifies the existing customers that should be rewarded for their loyalty.

Oceanus is a systems integrator and customer management specialist; providing comprehensive document and case management solutions for customer acquisition and customer service environments in Consumer Finance, Telco's and Utility companies.