Unchoosing Your Customers.


As the credit crunch bites, it seems that a number of credit providers are becoming choosy about who they want as customers. It's not just bad debts they want to avoid but also those credit card customers who shop sensibly, pay off their debt in full every month and thus are relatively unprofitable. They're having their credit limits summarily reduced or sometimes removed completely.

That may make eminent balance sheet good sense, but the message it sends to those customers, not to mention remaining and prospective customers is not so sensible. It's smart business to focus on those customers you can serve most profitably and if you choose to avoid certain customers that's fine, it's your prerogative and other businesses with different cost structures may subsequently cherry pick your rejects. But the time to do this is on the way up, not when times are hard.

Disgruntled non-customers are far less damaging to your customer-centric image than disgruntled ex-customers. It will be interesting to see if a similar scenario plays out when free web 2.0 enterprises start to monetise their businesses.

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