Navigating the Leaky Bucket: A Fresh Look at Customer Portfolio Management
Rethinking Traditional Segmentation
For decades, marketers have relied on needs-based customer segmentation to craft their marketing strategies. Filling a gap in traditional methods, Fred Selnes and Michael D. Johnson argue for a shift. What if the secret lies in examining relationships rather than mere needs? Instead of focusing solely on what customers want—a soup that’s heartier, a bank that’s friendlier—consider how intertwined they are with your brand. Could this be the breakthrough modern marketing needs?
Introducing Customer Portfolio Management
Selnes and Johnson introduce us to a compelling vision—Customer Portfolio Management (CPM). This doesn’t just seek volume or satisfaction but rather focuses on the lasting strength of relationships across a company’s entire market. It’s about nurturing every interaction as an investment, a move away from the shallow waters of short-term gains. A large leaky bucket, representing a broad array of both strong and weak customer ties, may actually hold more promise than a small, watertight one.
The Leaky Bucket Metaphor
Imagine two buckets: one small and contained, filled with loyal patrons, and a larger one, leaking but expansive in scope. The leaky bucket brims with potential, containing a spectrum of connections. According to MIT Sloan Management Review, it’s more profitable to aim for this larger bucket, embracing imperfections while fostering growth. Understanding the types and dynamics of customer relationships can guide companies in crafting strategies that truly resonate and expand their portfolio’s value.
Beyond Needs: The Dynamic Dance of Customer Behavior
Traditional segmentation centers around customer needs—a static, category-focused view. Yet, customers defy simplicity, frequently shifting across various segments and displaying dynamic behavior. Our traditional snapshots of what consumers need miss the complexities of their engagement with products and brands. As Selnes and Johnson emphasize, understanding this dynamism is vital for informed decision-making.
A New Strategy for the Future
Embracing CPM requires a reorientation, shifting the focus from isolated actions to holistic, long-term relationship building. It’s about aligning marketing strategies with the flux and flow of customer interactions. The depth of the customer connection, after all, may fuel more significant growth than the instantaneous satisfaction of meeting current needs.
Insightful Guidance from Leading Experts
Fred Selnes and Michael D. Johnson, both esteemed marketing experts in their own rights, have laid the groundwork for a strategic shift in marketing practice with their book “Customer Portfolio Management: Creating Value with a Large Leaky Bucket of Customers.” Their insights offer fresh perspectives for companies looking to harness the power of relationship-based segmentation for robust growth.
In the grand tapestry of customer interactions, are you ready to weave stronger, more enduring threads within your portfolio?
