Like Alan Mitchell, I too think I will scream if I hear another mention of a company’s decision to concentrate resources on their most valuable customers (MW March 7). But not for the same reasons. It is not a matter of working out how to calculate who your most valuable customers are – businesses will quite rightly tackle this problem in different ways. However, the problem with the notion of favouring your most valuable customers is that it still remains the case that few companies have established the data basis on which to identify their profitable customers.
Organisations are still peppered with islands of customer information, and databases are all too infrequently refreshed. Assumptions about which pieces of customer information are commercially significant are seldom tested and this aim of gaining a single view of the customer remains far from being a reality.
Until customer databases are more successfully managed, companies will not have an accurate picture of any customer’s profitability. To attempt to identify your most valuable customers under these circumstances is to run the risk of directing your budget away from current and future high value consumers.
The Database Group