Here is a quote from this article that defines customers into four categories and describes how best to deal with each group. <B>Question: Can you define your customers within these categories and if so, do these definitions help you better deal with them?</b> "Strangers are customers who display little loyalty and possibly offer the lowest profit potential (we used to call them the 'cherry-pickers'). This group tends to pick the eyes out of the low-margin specials or loss leaders, and buy little else. The challenge here is to identify this type of customer, avoid investing any unnecessary marketing resource in them, and try to make a profit on every sale. Butterflies are customers who are profitable, but transient and disloyal. This customer understands their own value and they will hunt out the best deals by 'shopping around'. The authors' recommendation is to 'milk' them for as much as you can while you can. The greatest error is to continue investing in this group after their activity has dropped off. True friends offer the highest profit potential, are more likely to be loyal, and should be treated with a softly-softly approach to convert them into 'true believers'. Interestingly, the authors found that intensifying the level of contact and communication was more likely to put off these loyal and profitable customers rather than increase sales. The most effective incentives for this group were 'soft' benefits of an exclusive nature, to make them feel extra special. The marketing challenge is to build both attitudinal and behavioural loyalty. Barnacles are the highly loyal customers who are, unfortunately, not very profitable. This customer group demands special treatment, demands special pricing and expects benefits. As a behavioural change is unlikely, the emphasis has to be on establishing whether they have the potential to increase their spending (either share of wallet or size of wallet) and, if not, to impose strict cost controls."