Three Common Mistakes in Customer Management

i) not understand the value of different customers, ie not all customers are the same
"...need to understand is how and who the business attracts, what keeps customers coming back and what drives them to buy more of the company's goods and services......the type of customer is critically important, particularly for categories such as utilities, telecommunications and insurance. In utilities, you want a customer will not jump between providers chasing deals, as they are expensive to acquire and have a low lifetime value...."
Justin Papps as quoted by Sally Patten, 2022b

Need to understand about customer retention, ie customers who continually buy from the organisation over time are more valuable.

It is easier and cheaper to retain customers rather than acquire a new ones, ie retention is better than acquisition, ie
"...It costs between six and seven times more to acquire a customer than to keep one..."
Sally Patten, 2022b

Focus should be on keeping existing customers satisfied, like introducing bundles, and adjacent products and services to encourage them to buy more and not relying on price)

ii) analysing too many customer metrics (to assess no more than 10 metrics; for retention, metrics like churn rate of specific customer types, revenue churn rate (to determine financial impact of their loss), net promoter score, etc; For growth

"...focus on share wallet or products per customer, as well as lifetime value and average return per user or customer..."
Sally Patten, 2022b

For customer acquisition, define the desired customer type, Size of potential audience, the current share of that audience and the cost to acquired those types of customers wanted
Utility is the key to attracting customers; access to the best products and/or services for their needs is more important than brand preference, ie people will buy good products and/or services even if they don't like the brand; don't try to be everything to everybody, ie best to be selective and unique, like OMO brand of washing powder emphasises whiteness and bright colours

"...make sure you stand for something that people attribute to you, not to everybody else, and do that consistently..."
Justin Papps as quoted by Sally Patten, 2022b

Need to have both short-term and long-term metrics; the later is important for the long-term opportunities like customers changing attitude to the environment, climate change, diversity, social justice, etc
"...60% of the company's effort should be on long-term customer strategy and 40% are short-term sales boosters..."
Justin Papps as quoted by Sally Patten, 2022b

A short-term boost might be offering a discount if item purchased immediately with cash.)

iii) overstating the role of the organisations products and services (sometimes in the rush
"...to devise the purpose of a company or product......can overstate the role a brand plays in a customer's life. Where it starts to go off the rails is where the role of the brand comes either too worthy board or too lofty and too far away from the services provided......Relying on trying to win customers with brand messages that have no relevance or cut-through is pointless..."
Sally Patten, 2022b

Some examples:

- with insurance providers, their customers' top priority is to know if their home, car, etc is damaged, the insurance company help them to return to their normal lives as soon as possible; they are less interested in anything else

- customers buying kitchen towels sole focus is how to clean their kitchen benches.