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



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.


"...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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