The Customers You Wish You Didn’t Have
Garrison Keillor's radio show, A Prarie Home Companion, originates from the mythical Minnesota town of Lake Wobegone, where “the women are strong, the men are good looking, and all the children are above average.”
Like the parents of Lake Wobegon, a lot of marketing managers seem to live in a place that's a little disconnected from reality. In that place, every customer is profitable. In the real world, they're not, and there's an important issue in all this for marketers.
Marketing, particularly direct and online, is typically focused on two activities—acquiring new customers, and retaining existing ones. In both cases, the metrics are typically pretty cut-and-dried. But as Einstein is said to have said, “Make everything as simple as possible, but not simpler.”
The classic metrics many marketers rely on may, in fact, be too simplistic: How many customers did we acquire? What did they spend? How much revenue did they bring in? Often, that is as far as the analysis goes. A new customer is a new customer is a new customer. Revenue is revenue. It's all good.
Not quite. In fact, there are many customers you would be better off without. Let's repeat that: there are customers you have now that you don't want, and there are new customers you don't want to go near.
Why? Because they are costing, rather than making, you money. This happens in every business, selling every sort of product, in every market.
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Marcia Kadanoff founded Firewhite Consulting, Inc. (www.firewhite.com) and serves as its CEO and President. She is a serial entrepreneur with 20+ years of experience in business and marketing strategy.
