Change Implementation Techniques for Forming Transitional Team, Creating Alignment, Maximizing Connectedness and Creativity

Technique 8.6 Classification of Customers

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Customers are classified on each of 4 criteria from i to v; with v being the highest

Criteria

Customers

Frequency*i

Recency*ii

Amount*iii

Category*iv

Handling Difficulty*v

           
           
           
           
           
           

i. Notes

a) frequency (how often they purchase; regular customers are more likely to purchase in the future)

b) recency (how much time has elapsed since their last purchase; recent customers are more likely to purchase again)

c) amount (how much they spend; higher-spending customers are likely to be more committed)

d) category (what sort of product/service do they buy? Some products/services are more profitable than others; some products are a one-off purchase)

e) handling difficulty (preference is given to customers who require minimum maintenance as they are the easiest to handle - but never take them for granted!!!!!)

The classification of a particular customer should dictate how you treat them; the ideal customer will score high on frequency, recency, amount and category, but low on handling difficulty.

In general terms, the customer wants

- timeliness

- consistent quality

- value for money (this includes right price and credit terms)

- good performance and service such as reliability, guarantees, after-sales service and client service including technical advice, product range and convenience.

- emotions are important in decision-making. If a decision is made on emotions, people are more committed to these decisions. Loyalty and emotions are correlated, ie the stronger the emotional response to a brand, the stronger the loyalty to the brand.

"...the way the brain experiences pleasure is not just with taste buds. There's the ambience, the memory - the brain is integrating all these factors, and it is called consumption utility..."

Baba Shiv as quoted by Catherine Fox, 2007

Therefore lowering prices can have a negative impact as the adage "low prices equals low quality" is deeply embedded in the psyche. Thus this belief can become a self-fulfilling prophecy with the product not working as well for us because of our belief.

Remember:

"...the connection between customer satisfaction and repeat business involves establishing an emotional link between the customer and everyone the customer comes into contact with at your company..."

Martyn Newman, 2007

 

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