This diagram is a two by two matrix, based on customer loyalty. The rows are labelled high profitability above and low profitability below. The columns are labelled short-term customers on the left and long-term customers on the right. This divides the matrix into four quarters. - Butterflies (short-term customers, high profitability). Good fit between company’s offerings and customer’s needs; high profit potential. Actions – aim to achieve transactional satisfaction, not attitudinal loyalty; milk the accounts only as long as they are active; key challenge is to cease investing soon enough. - Strangers (short-term customers, low profitability). Little fit between company’s offerings and customers’ needs; lowest profit potential. Actions – make no investment in these relationships; make profit on every transaction. - Barnacles (long-term customers, low profitability). Limited fit between company’s offerings and customers’ needs; low profit potential. Actions – measure both the size and share of wallet; if share of wallet is low, focus on up- and cross-selling; if size of wallet is small, impose strict cost controls. - True friends (long-term customers, high profitability). Good fit between company’s offerings and customer’s needs; highest profit potential. Actions – communicate consistently but not too often; build both attitudinal and behavioural loyalty; delight these customers to nurture, defend and retain them.