Analyzing Customers, Best Buy Decides Not All Are Welcome
“The devils are its worst customers. They buy products, apply for rebates, return the purchases, then buy them back at returned-merchandise discounts. They load up on “loss leaders,” severely discounted merchandise designed to boost store traffic, then flip the goods at a profit on eBay. They slap down rock-bottom price quotes from Web sites and demand that Best Buy make good on its lowest-price pledge. “They can wreak enormous economic havoc,” says Mr. Anderson.”
Sounds new, right? Wrong. Sounds like a bad idea, right? Nope, it is generally a good idea to get rid of bad customers (i.e., low-profit, low-margin). Not always, but usually. Of course, you have to make sure that these folks are ones you really, really want to eliminate. They can become high-profit customers, and they can open up holes in your business strategy. Be careful, do analysis, get rid of bad customers, watch them, and watch competitors that pick them up. Bottom line: Definitely dump bad customers, but be smart about it.
Use business intelligence to dump bad customers and target promotions
Fire your bad customers gently
How to Eliminate Bad Customers Gracefully
Limit ‘bad’ customers and target promotions
November 18th, 2004 at 5:16 am
Actually, what it sounds like is they are trying to play some retailing tricks that aren’t working the way they wanted. Now they are crying like a bunch of babies. Wah, wah, wah. We’re mad because we’re offering rebates, and you customers have the gall to take them. We’re mad because we’re offering products below cost, and you customers have the audacity to buy them at those prices.
They want customers who will pay top dollar, yet they use tricks that are sure to draw the low-price shoppers. Hmm. I want people who don’t care what they pay, so I’ll advertise to those who do care. How stupid is that?
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