Transcripts

Robert Gordman:
We've discovered that very often companies are spending significant amounts of money chasing the wrong customers.

Robert Gordman, author of the book, The Must Have Customer, identifies two types of customers.

The core customers - these are the customers that buy regularly and are loyal to the company. The other customers are opportunistic customers - people that do business with you when you have a special promotion and they're in and out and very often difficult to please.

Opportunistic customers are generally not worth the trouble. And he sites Best Buy as a company that figured out what to do with those opportunists.

Through their research they discovered that actually half of their customers were opportunists. They discovered that when they ran very low priced promotions that they may not have made much money on, some of these opportunists were buying this product in quantity and then reselling it on eBay. And in fact it didn't help Best Buy's business at all. So they have simply stopped running promotions that are not profitable to them. They maybe have lost business with these opportunistic customers but in total it hasn't hurt their business at all.

Tomorrow, how many businesses don't really know what their business is - I'm Mike Carruthers and that's Something You Should Know.