RATING CUSTOMERS

Modern day companies are going all-out to utilize a customer scoring system, based on the value of what you, as the customer, bring to the company.

The score is intended to reflect the merchandise or services that you are forecast to purchase over a lifetime.  Called the “Customer Lifetime Value (CLV)” score,  the numerical rating is assigned to each customer based on their past histories of purchases as well as their “ability to purchase” – that is, the customer’s education, bank accounts, credit card accounts, marital status, shopping frequency, and other evidence of “wealth.”  It’s actually just a modern method of sizing up the customer in the same way that shopkeepers of yesteryear did – making judgements of a customer’s value based on how they look or behave.  And, offering services commensurate with that judgment of “wealth.”  In today’s sales environment, companies will keep a customer who is calling in with a complaint waiting for longer or shorter periods of time, depending on their CLV.  Wireless companies, for example, will route high value customers to their most skilled agents. Some banks and credit unions assign a “Gold” status to their higher-deposit customers, with their own agent to contact for needs and services.  Your score can also determine the prices you pay, the products and ads you see, as well as the perks that you are offered.  A marketing professor at Harvard has said, “The more profitable you are, the better service you get.”  I’ve also heard rumors that the process works in the opposite way for some online merchandising sites – that potential customers signing in for the first time, will be offered better deals, on identical items, than the prices given to those regular customers, even the “high-rollers.”  Clearly, there are a variety of uses for the CLV.  A retailer has explained the concept in this way:  “What CLV does is allow us to see beyond the day-to-day to ensure we’re focused on the quality of the new customer, rather than just focusing on gaining customers in quantity.”  In other words, the CLV allows companies, early-on in the new customer’s history, to start catering to their needs and wants in ways that have been proven to foster greater spending, as well as greater loyalty.  An interesting concept.  I can see some possibilities of failings being built into such a system.  For one thing, it was well-known a few years ago that companies had determined, through their “research,” that people over 50 rarely bought things.  If age is a part of the CLV algorithms, as it most certainly is, it’s just possible that that assumption is also incorporated in the multiple scoring components.  I see every evidence, from those around me – clients and friends –  that that would be a vastly incorrect assumption.  At any rate, at its very base, it is an interesting way to understand why wait times for calls might vary – not just “high calling volume” alone.

2 thoughts on “RATING CUSTOMERS”

  1. I have never rated customers by their ability to pay higher prices or by their wealth. We have many “well off” clients and they are not treated any different than our clients that are just starting out and might be struggling with finances. We do our best regardless of who we are working with. Sizing up clients “like a used car salesman” sounds a bit fake/phony and is not our style.

    1. That sounds like what we’d all like to believe that businesses do, Bob. Kudos. I’d guess that very large businesses have trouble keeping in touch with their clients/customers and, thus, utilize rating scales as a way to “get to know” them. Now that we have “uncovered” the rating practice, maybe customers will have the opportunity to voice an opinion on its use.

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