Customer Bonding
Customer Bonding

Customer Bonding

One of Dean & Company's primary areas of expertise is developing strategies for targeting, attracting, and maintaining the most profitable customers. Given the exorbitant costs attributable to customer acquisition, once the most profitable customer segments have been identified and developed, maintaining the customer relationship is critical for sustaining profitability. Much of Dean & Company's work in this area revolves around the concept of "bonding", the central theme of The Delta Model.

Bonding describes a mechanism to both attract and retain customers. Dean & Company has observed through its work that the traditional ways to compete - on price, quality, features, etc. - are necessary, but insufficient to lock-in customer relationships. Competitors can quickly imitate these product-based items of differentiation, and customers quickly change allegiance.

An alternative approach is to move beyond product-based elements and focus on the customer's economics. The goal is to promote customer bonding by leveraging "collateral" assets that customers cannot easily walk away from. Collateral assets are external to the product itself and represent investments that are linked to your product and which are made by the customer or complementors (companies that provide products that enhance or augment your product). Investments in these assets, both financial and time, can increase switching costs.