Many companies focus on attracting and retaining high-value customers. Should we also focus on attracting and retaining low-value customers that may be worth more in the future?
Yes, it is important to try to cultivate longer and better relationships with customers who have growth potential. The trick is to know which customers have that kind of potential.
To better understand the unrealized potential value of a customer, first take a close look at the attributes of customers with the highest lifetime values (your Most Valuable Customers, or "MVCs"). These attributes may include demographic details such as age, gender, income, number of children, or other descriptive characteristics. If you have a customer who has similar attributes to an MVC but has a lower value based on historic and predicted purchase transactions and costs, then you might have a customer whose value could be substantially increased.
Hear more in Creating Customer Value, a SearchCRM.com monthly podcast series with Peppers and Rogers.