their service and special recognition for customers who ‘treat them right’ with their buying and referral decisions.

What about those who complain and say, ‘All companies should give all customers the same service level regardless of how much a customer spends’? To this simplistic and righteous view I reply, ‘Wake up and enter the real world. As a custome

A Financial Times editor in London asked my opinion about systems that automatically route customers to higher or lower levels of service based on the loyalty and profitability of the customer.

This happens every day with gold and platinum customers enjoying faster telephone service and shorter lines while everyone else waits and waits.

‘Isn’t this a case of customer discrimination?’ he asked, hoping for a hot topic and response.

My answer was decidedly cool: ‘Of course this is customer discrimination. And it is totally appropriate. After all, customers do this with companies all the time.’

The editor was confused until I explained further.

Customers are constantly choosing which companies to patronize, how frequently and with what amount of their available budgets. Companies must do the same: choose which customers to serve, how quickly and with what amount of their available budget.

In both directions, the intention is the same. Customers spend more where they perceive they are getting better service and value. Companies invest more where they see they can obtain better value and long-term ‘service’ (loyalty) from their customers.

When the matching is done right, it’s a win-win situation for both parties. Customers are given an incentive to consolidate their spending, patronage and loyalty behavior with those companies that ‘treat them right’. And companies have an incentive to increase their service and special recognition for customers who ‘treat them right’ with their buying and referral decisions.

What about those who complain and say, ‘All companies should give all customers the same service level regardless of how much a customer spends’? To this simplistic and righteous view I reply, ‘Wake up and enter the real world. As a customer

a case of customer discrimination?’ he asked, hoping for a hot topic and response.

My answer was decidedly cool: ‘Of course this is customer discrimination. And it is totally appropriate. After all, customers do this with companies all the time.’

The editor was confused until I explained further.

Customers are constantly choosing which companies to patronize, how frequently and with what amount of their available budgets. Companies must do the same: choose which customers to serve, how quickly and with what amount of their available budget.

In both directions, the intention is the same. Customers spend more where they perceive they are getting better service and value. Companies invest more where they see they can obtain better value and long-term ‘service’ (loyalty) from their customers.

When the matching is done right, it’s a win-win situation for both parties. Customers are given an incentive to consolidate their spending, patronage and loyalty behavior with those companies that ‘treat them right’. And companies have an incentive to increase their service and special recognition for customers who ‘treat them right’ with their buying and referral decisions.

What about those who complain and say, ‘All companies should give all customers the same service level regardless of how much a customer spends’? To this simplistic and righteous view I reply, ‘Wake up and enter the real world. As a custome

s to patronize, how frequently and with what amount of their available budgets. Companies must do the same: choose which customers to serve, how quickly and with what amount of their available budget.

In both directions, the intention is the same. Customers spend more where they perceive they are getting better service and value. Companies invest more where they see they can obtain better value and long-term ‘service’ (loyalty) from their customers.

When the matching is done right, it’s a win-win situation for both parties. Customers are given an incentive to consolidate their spending, patronage and loyalty behavior with those companies that ‘treat them right’. And companies have an incentive to increase their service and special recognition for customers who ‘treat them right’ with their buying and referral decisions.

What about those who complain and say, ‘All companies should give all customers the same service level regardless of how much a customer spends’? To this simplistic and righteous view I reply, ‘Wake up and enter the real world. As a custome

re they see they can obtain better value and long-term ‘service’ (loyalty) from their customers.

When the matching is done right, it’s a win-win situation for both parties. Customers are given an incentive to consolidate their spending, patronage and loyalty behavior with those companies that ‘treat them right’. And companies have an incentive to increase their service and special recognition for customers who ‘treat them right’ with their buying and referral decisions.

What about those who complain and say, ‘All companies should give all customers the same service level regardless of how much a customer spends’? To this simplistic and righteous view I reply, ‘Wake up and enter the real world. As a custome

their service and special recognition for customers who ‘treat them right’ with their buying and referral decisions.

What about those who complain and say, ‘All companies should give all customers the same service level regardless of how much a customer spends’? To this simplistic and righteous view I reply, ‘Wake up and enter the real world. As a customer you insist on your right to choose who to patronize, right? Companies should also have the right to choose which customers they want to attract, retain, cultivate and appreciate.’

Note: This principle may not apply to government services, charitable organizations or companies in a monopoly situation. In these instances, a more uniform level of service may be appropriate.

Key Learning Point

Partnership in business is a two-way street. If you are a customer and want more service from the companies you choose, give them more of your purchases, budget, frequency, constructive input and quality referrals. If you are a company and want more profitable business from the customers you choose, give those customers more of your time, speed, improved systems, well-trained people and other special attention.

Action Steps

As a customer, consolidate your purchasing behavior to reward those companies that serve you well. Don’t expect great service if you are not going to be a great customer. For companies, decide which customers you want coming back again and again. Focus your improvements on serving them better over time. Keep your minimum standards up, but save your highest levels of service for those who give you the highest levels of their business.