Angel Customers & Demon Customers: Discover Which Is Which, and Turbo-Charge Your Stock

by Larry Selden, Geoff Colvin, Geoffrey Colvin

Book Overview

One of the oldest myths in business is that every customer is a valuable customer. Even in the age of high-tech data collection, many businesses don't realize that some of their customers are deeply... This description may be from another edition of this product.

• Format: Hardcover
• Language: English
• ISBN: 1591840074
• ISBN13: 9781591840077
• Release Date: June 2003
• Publisher: Portfolio
• Length: 256 Pages
• Weight: 1.08 lbs.
• Dimensions: 0.9" x 6.3" x 9.3"
• Age Range: 18 years and up
• Grade Range: Postsecondary and higher

Customer Reviews

Outstanding Piece of Work

This book is a highly relevant must read for anyone serious about customer-centricity. The model used has the potential to drive economic benefits that far outpace traditional marketing, CRM, and customer satisfaction focused programs. It should, however, be read along with some other good material on CDI and Customer Experience Management (CEM) like Collin Shaw's books on CEM [...] - I have no connection to them. I've talked with a few companies and consultants who have attempted to implement customer profitability management without the underlying CDI and the programs failed - even in smaller markets like Europe. It places a little too much faith in just demanding data from IT on the premise that millions have been invested in systems so the data must be there. That is certainly not always the case. A good CDI strategy is critical to this program. But the focus of this book is the financial model and it should be read for what it is. The other section of material that could be more developed is the Value-Exchange methodology. Intermixing operational customer segmentation (not the kind done in direct marketing programs) with the profitability deciles would seem to be the kind of thing that is needed to mature the strategy and place relevant value propositions where they belong in the CEM/marketing mix. But alas, customer centricity is far too broad and complex of a topic to knock out in one book. This book is excellent and makes a much-needed contribution to a field that is sometimes more enamored with attempts at operant conditioning (a.k.a. CRM) than common sense management. I bought out the entire stock of this book from a store and continue to give copies give copies away to this day.

A few simple ideas that are woefully uncommon

The central thesis of Selden and Colvin's book is that not all customers are desirable. Some are "angels" who deliver net profit while others are "demons" who cost more to serve than they generate in revenue. A well run company must understand who its customers are and then organize around serving them effectively, securing its relationship with angels while repairing (or ending) its interactions with demons. The authors write with a simple and bright style that keeps the book interesting. They touch on a number of case studies they've performed in their professional careers to help illustrate their points. I wish that they had included more data in the book, but what they do provide is about right for an introduction to the topic. Some reviewers deride the content of this book as obvious, but even more obvious is that a tremendous number of businesses don't get it. I see the problems the authors describe play out repeatedly, from perspectives as a professional within my own industry, as an investor, and as a consumer. This book is an exciting rebuttal against the mentality of "The customer is always right" (what if the customer wants to pay less than your cost?) and a wakeup call to move forward from smokestack-age business organization in the information-age economy.

Make your Angel Customers Happy

We should all be aware of unprofitable Customers. Anyone in business should be already aware of the 80/20 rule - that 80% of your profits come from 20% of your customers. This book goes that one step further - by some excellent case studies it shows how 150% of your profits come from 20% of your customers - they are the Angels. The Demons are those 20% of your customers who actually lose you money equal to 150% of your profit. Its not another book about CRM (Customer Relationship Management), but it is about being Customer-focussed rather than Product-focussed.I have multiple relationships with Companies who could do with reading this book - including my own employer, with whom I have around 20 Contracts, and yet any one Business Unit only seems to know about 1 or 2 others at best. All those lost selling opportunities - for example they know the ages of my kids from my Travel Insurance Policies, but have never tried to sell me any College Savings Plans!Read the book and make your Angels happier - and get rid of the Demon ones!

This is a great strategy book

This is a skillfully written, subtile and insightfull book.I believe that the reviewer who said that "this book stated the obvious and that outside of a novice business student, anyone who finds this book interesting or useful may want to consider another profession than business" has missed the point of this book...completely.The importance of this book is NOT in stating that "the customer is important .. some more than others". This we all know. The importance of this book is in outlining a practical methods for ascerting which customers are money making one and which are not money making one **by going at the junction of customer marketing and customer finance**. It is by offering a practical way to relate the two perspectives (the qualitative and the quantitative one) that this book was useful to me. The key thing I learned from this book is the introduction of detailed customer-finance reasonings to evaluate clients. I also was greatly inspired by their concept of CUSTOMER DEAVERAGING. I too often see company that thinks in terms of their "average customers" and thereby miss any valuable & actionable insight on how to relate to their customers in a way which is both more profitable and more meaningfull (from both the customers and the client perspective). Well for company who are like that, I think this is a GREAT book that uncovers what needs to be done in both a practical and theorically sound way. I can testify that having applied a big part of the framework of this book to solve one strategy problem of one of my european client, we did uncover some really devishly customers (50% of their client acquisition was focusing on customers from which their will be never enough money generated to cover the initial customer acquisition expense) and some really angel ones (25% of their customer acqusition was focused on clients that represents overall 65% of their actual profit). We were also able to do some detailed financial modelling to discover that, in their specific case, they should refocus their attention on the angel customers and probably completely change their business model and value proposition for dealing with their demon ones.If I had one critic it would be that the part relating customer oriented strategy and the stock valuation is treated without enough precision. Having said that, I can also state the customer business I was speaking about is a recurrent one and that as a result the benefit of acquiring an angel customer goes well beyond the financial revenue derived from them in the first year. So, beyond the immediate profit improvement that are likely to results from their refocusing on the right customers this year, I anticipate this company to achieve a surge of their financial results in the following years (This hopefully will ultimately also find a reflection in their stock price...)

Behold customer centricity

We have all been frustrated in our interactions with companies that are unable to fulfill our needs. Selden's book paints in broad strokes the steps companies can take to transform themselves into truly customer centered organizations. I have found that while many companies claim to be "customer centric," it is actually impossible for them to be so because, as Seldon insightfully explains, they are not organized around customer segments, are unaware of the varying profitability of these segments, and treat customers equally.This book should serve as a wake up call to senior executives who desire to take their companies to the next level of success. I found it compelling that the companies cited in the book that have undertaken this transformation have been greatly rewarded through increased profitability and above average stock movement.After reading this book, I believe that executives may perceive such a reorganization to be daunting and require the use of outside consultants. However, Seldon poignantly points out that the immediacy of favorable results on a small scale will make company wide transformation quickly achievable, and produce substantially improved financial returns.