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Still, there have been glitches. Since it has been instituted, the system has not produced glowing success stories all the time. For example, the "red team" was so disastrous that it was disbanded after finishing a year in--you guessed it--the red. Some clients--like Ford Motor Co.--never did make it to partner status despite great expectations. Furthermore, the loss of any VIP customer hurts--a lot. For example, CRI took a sales hit of about $2 million in 1993, Pope says, after Northwest Airlines grounded its research work with the company. "There's an ebb and flow to this," notes manager Pat Hughes, who recently lost Dow Brands when the company was sold. But that hole was soon filled--by a former customer who came back to CRI.

Now the teams view customers not as a onetime hit or miss but as part of a continuing cycle. The way Corson looks at it, the lifetime value of her customers is "infinite." Even those customers that don't pan out the first time are never written off: they could be future prospects.

Pillsbury is a good case in point. One of those questionable accounts 10 years ago, Pillsbury officially joined CRI's freshman class earlier this year. CRI gave Pillsbury a brand-new page in the customer book and had the same high hopes for the account it has for every hot freshman. Both sides spent long hours interviewing one another before deciding to advance their renewed relationship to the partner stage. "It's a learning curve we're both on," says Pillsbury's Robert Anderson. He adds, "They understand they'll get a significant amount of our spending." In return, CRI employees are contributing to the intellectual capital at Pillsbury, where CRI team members can be found in the hallways and in research-project meetings. Anderson attests, "It's already begun paying off."

What has given CRI the confidence to break so many of the old marketing rules? It's simple: the company understands its customers much better now. And it should. With 50% fewer customers than it had a decade ago--and with 50% more employees--CRI can afford to devote more attention to each customer. Ten years ago, the ratio of employees to customers was about one to two; today, with approximately 130 employees, that ratio is nearly reversed. At the same time, revenues per employee have doubled.

It's no wonder CRI does very little advertising anymore.

Every year now, Corson takes delight in a call she knows she will receive. Like clockwork, a yellow pages salesperson tries to get her to take out a bigger ad. Corson's reply is always the same. "Now why would I want to do that?" she asks.

Susan Greco is an articles editor at Inc.

Life on the Quad: The Quadrant Analysis

How CRI did it: In assessing which customers to keep, CRI calculated the profit for each one by subtracting all direct costs and selling expenses from the total revenues brought into CRI by that customer for the year. (Think of it this way: What costs would you not incur if this customer went away?) The cutoff points for "high" and "low" scores were purely subjective--they corresponded to CRI's goals for profit volume and profit margin.

HIGH/LOW
About half these customers were new ones that CRI figured would become more profitable over time. The other half were right on the line--on the verge of high/high.

HIGH/HIGH
At the top: These were customers who had pared down their suppliers and clearly valued an ongoing relationship with CRI. They accounted for 29% of sales.

LOW/LOW
CRI once believed it could make many of these customers more loyal, but time revealed that this group wanted to work with various suppliers.

LOW/HIGH
These were small customers who were very profitable. Was there more potential for sales?

A Tale of Two Customers
Below is a comparison of two of CRI's "representative customers" in 1987. At first glance Customer A appears to be more valuable. But during the course of the year, Customer B racked up far lower direct costs and a third of Customer A's selling expenses, making it more than twice as profitable as Customer A.

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