Does the BCG-matrix apply to CRM?

The BCG matrix or the growth-share matrix was created in the seventies to analyse the correlation between the use of cash and the cash generation by the products of a company. Boston Consulting Group concluded that there are four types of products, depending on the level of investment that they require and the amount of cash they generate.

The matrix also summarizes the lifecycle of most products, which starts with problem children or question marks (products which require high investment and generate low cash flow), which become stars when they are successfully or dogs/pets when they’re not. Stars can only become cash cows (whey they are less successful but still generate a lot of cash) or dogs/pets (when they stop being successful).

BCG matrix

Image of the growth-share matrix from a BCG Perspective. Author or copyright owner: The Boston Consulting Group, Source: http://on.bcg.com/12PLAlh

Without even knowing it, you may be applying the same logic when you decide how you treat your customers. As you know, in order to get cash from your customers, you need to invest in your relationship with them. All new customers are questions marks, which become stars in the best case scenario. The loyal ones will eventually become cash cows. Most of your customers are probably pets and you may not be sure what to do with them because they don’t buy a lot from you but they don’t cost you much either.

You may think that the customer experience revolution that everyone is talking about will make this logic obsolete, but can you realistically provide a great customer experience without investing in people, tools, training, maybe new facilities, marketing and PR, etc.? 

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