“Angel Customers and Demon Customers” (also published as “Killer Customers”) is a book all business owners should read.
One of the oldest myths in business is that every customer is a valuable customer.
Many businesses strive to constantly acquire new customers without considering whether these customers will be profitable or perhaps even loss makers.
Many businesses don’t realise that some of their customers are deeply unprofitable, and that simply doing business with them is costing them money.
Often the top 20 percent of customers generate almost all of a company’s profit, while the bottom 20 percent are actually destroying value, wasting your time and causing you angst.
The cutting-edge companies featured in the books case studies, in industries ranging from retail to manufacturing to financial services, are taking a fundamentally new look at how they treat their best and worst customers.
Most importantly the book explains how to evaluate and group customers into segments, moving away from measuring the “average revenue per customer”, instead classifying customers into groups to decide which ones aren’t worth working with and which ones should be treated better.
William Garrett reviewed the book for Amazon.com and stated:
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.
The book is co-authored by Larry Selden: a professor emeritus of finance and economics at Columbia University Graduate School of Business and Geoffrey Colvin, Fortune magazine’s senior editor at large & co-anchor of Wall Street Week with Fortune on PBS.