Customer worth

An organization should be able to determine the worth of individual customers; combining sales margin, sales and marketing costs, management costs, logistics and service and so on. Armed with this information, an organization is able to make very robust decisions on marketing activity, including acquisition profiles and planned customer loss programmes. This capability scores very poorly in both the CMAT-R sample and across the CMAT database as a whole. This has a significant impact, since organizations are unable to conduct fully robust analyses, which drives further weakness in customer management activity and ultimately in measurement of success.

Developing this capability in practice is not as difficult and expensive as one might think. An individual, customer-worth figure based on informed 'guesstimates' built on top of a core of robust data is significantly better than not having one at all. Of course, CDI and good data quality capability improve the accuracy of the customer worth data, but the real key to progress in this area lies in a good analysis team and the senior management commitment to putting this key metric in place.