May 30, 2012

I Just Don't Care About Customer Profitability

One of the most delicious comments of the past year was uttered by an Executive ... this individual told me this nugget:

  • "I just don't care about customer profitability.  I don't make decisions on a customer-by-customer basis. As an Executive, I make macro-level decisions.  Do we invest in a new product?  Do we remodel a store or build a new store?  Do we close down our call center and outsource it to India?  Do I hire talented employees?  Do I add a catalog to the contact strategy?  Do I cheat and use paid search to drive traffic, or do I do the hard work to allow organic search to succeed?  Every decision is made at a macro-level.  And if I make the right decisions, customer profitability takes care of itself.  Never, ever, do I sit in my office and say to myself, 'what is the best strategy for Nancy Jones in Medford, Oregon?'"
Boy, that quote is going to chew up some of the pundits in the marketing blogosphere, huh?

Maybe we should turn the story around, focusing on the marketing pundits in the vendor community who demand a true one-to-one, customer-centric strategy of all of us:
  • When you write blog posts, are they personalized to your audience ... is each message different, or do you blast the same message to everybody?
  • When you publish an email newsletter, do you have fifteen different versions, customized and personalized for different audiences?
  • When customers and prospects visit your website, do you have different landing pages for each visitor based on visitor preferences?
The reality, of course, is that few of us focus on individual customer profitability.  There are times when we can make a significant difference (my "A" "B" "C" "D" "F" grades in Catalog PhD projects, for instance).  And there are the other 85% of instances where we make macro-level decisions.

Maybe it is time to be more realistic ... to realize that the macro-level decisions are hard ones, ones that ultimately determine how successful we are.

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