Chapter | Consumer-Brand Relationships: Theory and Practice | 2012

Firing Your Best Customers: How Smart Firms Destroy Relationships Using CRM

by Jill Avery and Susan Fournier

Abstract

With incidences in the 20%–25% range, the practice of firing customers has become increasingly attractive as firms try to maximize the lifetime value of their customer portfolios. This chapter traces the relationship trajectory of a 30-year customer of Filene's Basement, a retailer offering fashion goods at discounted prices, who was eventually fired by the firm. The case traces how company actions taken in the name of customer relationship management (CRM) contributed to the creation and demise of a particular type of commercial relationship: the best customer. Ironically, we find that firing the customer is often a case of blaming the victim: managers remain largely unaware of their own roles in creating the unprofitable customers they seek to shed. We reveal how CRM programs can transform best customers from highly profitable, loyal customers into high maintenance customers whose value stemming from their frequent purchasing is eroded by their increasing cost-to-serve. The case advocates a deeper appreciation of the two-way, reciprocating nature of customer relations and the dynamic processes whereby they should be nurtured and maintained.

Keywords: marketing; Brands; brands and branding; brand management; CRM; customer relationship management; Customer Focus and Relationships; Customers; Marketing; Brands and Branding; Marketing Communications; Marketing Strategy; Consumer Products Industry;

Citation:

Avery, Jill, and Susan Fournier. "Firing Your Best Customers: How Smart Firms Destroy Relationships Using CRM." In Consumer-Brand Relationships: Theory and Practice, edited by Susan Fournier, Michael Breazeale, and Marc Fetscherin, 301–316. Routledge, 2012. (Paperback edition published in 2013.)