Are There No Demon Customers?

A few years back, a book pronounced that there were angel customers and demon customers.  The angels are profitable, and the demons are unprofitable.  If the demons cannot be made profitable, they need to be terminated as customers, or at least ignored.

Now Wells Fargo CEO Dick Kovacevich is claiming that there are no bad customers, just companies that haven’t yet succeeded in turning them into profitable customers.  I’m not totally convinced, though I think that Wells may be the best large bank in the country (and I own a ton of their stock).  Read the story in Business 2.0.

Business Strategy Implications:  Don’t be so quick to abandon a seemingly unprofitable customer.  The old San Francisco-based Wells Fargo did that in spades, and lost a great number of customers–and profits.  The new Wells Fargo (really the old Norwest Bank that took on the Wells name when they bought the San Francisco bank) is winning accolades for better customer service, and it’s earning a lot more in profit.