Building right relationships with right customers

The company can classify customers according to their potential profitability and manages its relationships with them accordingly. Customers are classified into four relationship groups, according to their profitability and projected loyalty.

• Strangers: little fit between company's offerings and customer's needs. Low profitability and little projected loyalty. "Do not invest in these customers" is a simple relationship management strategy.
• Butterflies: High profitability but not loyal. Good fit between company's offerings and customer's needs. We can enjoy them for only a short while and then they are gone.
• True friends: are both profitable and loyal. There is a strong fit between their needs and the company's offerings. The firm wants to nurture, retain and grow these customers by making continuous relationship investments.
• Barnacles: are highly loyal but not very profitable. Limited fit between their and the company's offerings.