Reward your most profitable customers with your best service

We are constantly being told that the key to increased profitability is providing world-class customer service. But how do you provide world-class service without driving up your costs?

The key is not to provide a one-size-fits-all service but to group your customers according to how profitable they are and provide a service commensurate with their level of contribution to your profits.

To assess the profitability of a customer you need to know not only the sales they account for but also the cost of achieving those sales to that customer.

Levels of service

You can afford to provide your most profitable customers with a premium service such as a designated sales or customer service agent, personal calls, flexible delivery schedules, rush delivery at no extra charge, or anything else that might make them feel a valued customer.

But for less profitable customers you can scale back to a standard service such as tele-sales, limited delivery options, charges for rush delivery, etc.

At the least profitable end of the continuum you can charge for services that might otherwise be free, restrict credit terms, or increase the size of minimum orders.

Rewards

The important thing is to let the customer know that the service they receive is a reflection of their contribution to your profitability and to encourage those further down the scale to move up by increasing order sizes and/or ordering additional products or services. Encourage them also to help you reduce your costs in supplying them and reward their efforts with higher levels of service.