Not all customers are equal

In a previous blog article (dated 08.07.16) I discussed research by Reinartz and Kumar which suggested that loyal customers could be put into four different categories: True Friends, Butterflies, Barnacles and Strangers.

Reinartz and Kumar point out that all of these customers may be described as ‘loyal’ to a certain extent. And all of them bring you repeat business. In other words they exhibit 'behavioural loyalty' (see article dated 10.06.16).

But some of them might not be very profitable for your company, and might take more of your time and effort than is worthwhile. Reinartz and Kumar suggest the following strategies for addressing these different types of customer:

True Friends - are 'advocates' for your company and are regular customers. They also produce the most profit. Reinartz and Kumar suggest that these customers should be rewarded with exclusive products and other special benefits. However, they warn against over-contact. These customers are already bringing value to your business, and exploiting them too much may lead to 'burn out'.

Butterflies - are also profitable, but they are much less loyal. They should be given plenty of attention in the early stages of the relationship. However, once it appears that their purchases are dropping off, you should stop investing too much time and effort with them.

Barnacles - tend to be less profitable. Although they think highly of your company and its products, they spend little money and are therefore not very profitable for you. Ideally, the best strategy is to try to sell them products and services that are related to what they already buy from you, but don’t waste too much time on them.

Strangers - may often seem like loyal customers, but they rarely bring in much value and otherwise don’t show other signs of customer loyalty. Reinartz and Kumar suggest that this group should be left alone, as they create little profit and are not bringing any long-term benefit to your company.

Customer loyalty is obviously really important, but spending too much time and effort treating all customers equally can be inefficient and unprofitable. Your best course of action is to try to discover which category each customer fits into, and then use a strategy to address them accordingly.


Reinartz, W and Kumar, V., 2002. The Mismanagement of Customer Loyalty, Harvard Business Review, July 2002.