Companies need to be careful if the techniques they use attract low volume, high maintenance customers. That is not to say these are "bad" customers (though some are). More often than not, the company does not have the proper infrastructure and support structure to effectively address these customers. An example is McDonald's. Very few restaurants can generate ANY profits featuring a $1 value menu offering. McDonald's has the size, equipment, training, brand, marketing, and system to generate billions of dollars of profits with this product offering. If a restaurant uses a go to market strategy which attracts customers seeking pricing, speed and quality to match McDonald's, there is a good chance they will fail. Even if the cost of customer acquisition is very low, the lifetime value of the customer may be less than zero. For those versed in mathematics, the flaw with this business model is obvious.

Landing high volume customers is often managed with expensive sales or marketing programs. A critical mistake that many companies make is to take these high volume customers for granted once they transfer from prospect to customer status. In any business relationship, there are going to be problems that occur in the course of the account maintenance. These mistakes can often be costly for the company to remedy and absorb. Rather than taking a big refund hit that will impact a bonus or commission, the company takes a hard line on the service issue. In turn, this highly prized customer may take their business to the competition. If they are really pissed off, they may influence other prospects or luke-warm customers to steer straight of the company. Sounds pretty bad, right? It is. Now let's be clear. I am not advocating that a company give away all their profits to ultra-demanding customers. Instead, I am suggesting that if a customers truely has a legitmate claim to refunds or credits due to a mistake made by a company, than the company needs to take ownership of the situation and satisfy these high-value customers. Offering customers satisfaction when every things are running smoothly is easy. The trick is to delivery when something blows up. The cost to remedy a customer service disaster can be expensive, so a company is highly motivated to reduce these problems. However, customer service disasters happen to even the best run organizations.

Funds need to be directed to both customer acquisition and customer retention costs. The benefit of spending on customer retention are many. Organizations with the happiest customers are able to win new customers with lower costs than competitors with low customer service ratings. In turn, sales, marketing and customer service talent are easier to recruit and retain. Due to a superior employee base, the top customer service organizations delivery superior results. This virtuous cycle is how some of the legendary customer service companies such as Nordstrom's, Southwest Airlines, and AMEX have outperformed their peers. Although it a simple concept, many organizations' focus on short terms profits conflict with this "do the right thing" approach.

This shotgun approach works if the activity level and frequency is high. However, taking a more thoughtful approach to sales can produce superior results.

Not all customers are created equal. Figure out which customers and prospects are likely to be the most profitable.

Sector 1) Low Profit/Low Conversation - Avoid at all costs.

Sector 2) High Profit/Low Conversion - Big game hunting should be reserved for those that can survive lean sales while trying to land the big one.

Sector 3) Low Profit/High Conversion - OK to stimulate activity and get the ball rolling, but beware spending too many cycles on these customers who take away time from the best customer segment.

Sector 4) High Profit/High Conversion - Spend most of your time targeting this quadrant.

The game plan to maximize your sales to Sector 4:

Step 1) Analyze and identify your targets.

Step 2) Get these customers to try your service.

Step 3) Spend extra time to find out how to get trial customers to become regular customers.

Step 4) Provide world-class customer service to these customers.

Step 5) Repeat Step 4 over and over again.

Despite your best efforts, you will still lose some of these premium customers. So the name of the game is to land and convert these customers at a far faster rate than your attrition rate. This works if you are targeting customers in quadrant 4, but can quickly derail if you spend too much time on Sectors 1, 2 or 3.

Happy Hunting.

So innovation, features, and lock in are critical for the triple play to succeed. Our household recently made the switch from Comcast to DirecTV. Although relearing a new channel navigation system and trying to get the TiVo to work has been a problem, there are some cool features that we did get. On one machine, we now have the DVR built into our satellite box. Any time you reduce the number of wires is a plus in my book. The coolest surprise feature we received with our package is the caller ID on TV feature. The phone rings, and a little popup on the TV shows the caller ID #. Serious WOW factor.

No matter which market your company serves, there is fierce competition. Getting a consumer to switch from a decent service is extremely difficult. When you do win your customers, your competitors will be working hard to get these customers to switch. Complacency is a path to a slow death. The key is to take a leadership position, maximize cash flow and continue to innovate like mad. Andy Grove is a key proponent of this method, and in a different but equally effective manner, Jeff Bezos has successfully managed this strategy.

Since all good things come to an end, I am not using any proprietary complementary email in case Comcast provides a compelling reason to come back to them. The fact that phone numbers are now portable also makes the switch less difficult. Hopefully DirecTV will continue to come up with WOW features like the caller ID on TV, or simply provide a great deal so future switching is unnecessary.