Product-Customer Growth Matrix
Posted by Jeffrey Henning on Mon, Dec 22, 2008
In the recession of the early 1990s, when I worked for BIS Strategic Decisions, our CEO, Graham Cooper, led a strategy session in which he drew his own variant of the Ansoff Matrix. Where the Ansoff Matrix contrasts markets and products, Cooper's matrix contrasted customers and products:
The numbers indicate the relative level of effort required to acquire each type of revenue, from least effort to most effort:
- Selling existing products to existing customers
- Selling existing products to new customers
- Selling new products to existing customers
- Selling new products to new customers
A healthy company allocates its resources across all four quadrants. For Cooper, our company's efforts during the recession had to be invested in selling existing customers those existing products that they were not currently buying: additional reports, retainer hours, and custom consulting projects. This would provide the best short-term return on investment.
For me, this "Cooper Matrix" provides a concise argument for selling more to existing customers during a recession. Survey research can help with each quadrant, but for the first quadrant the focus is simply on customer loyalty: what are customers' current intentions to repurchase, and what steps can your organization take to improve that likelihood?