Business-to-Business Example

Abstract

This case differs from the other example discussed in the previous chapter in that the direct customer is a small or medium-sized business rather than an individual. Once again, the company in question, a courier company, wanted to refocus its marketing efforts and essentially initiate a CRM program. As discussed previously in this book, management wanted to identify the company’s best customers and profile them to better understand them. Yet, in creating or establishing metrics to identify the best customers, only purchase behavior was considered to keep things simple. However, this seemingly simple metric was not so easy to determine. Purchase behavior was often very sporadic and infrequent. The first challenge, then, was to determine the appropriate time frame for a small to medium-sized company in purchasing this company’s courier services. In other words, do active customers make regular purchases in intervals of 1 month, 3 months, 6 months, etc.? Once this timeframe was determined, the company could then use the purchase metric as a proxy for value, albeit a simplistic measure