Are you the right customer for me?

If you aren’t doing business with the right customers, you could
accelerate your company’s demise. The wrong customers weigh down your
company like a sack of potatoes tied around a swimmer’s waist; the right
customers are like saddling the same swimmer with a buoyant life
preserver. The trick is finding the right customers, and this is where
smart executives will unleash their big data analytics team.

The strategy of relationships

Your treatment of customer relationships starts with your corporate strategy. Alan Weiss,
legendary management consultant and author on corporate strategy, made
two very important contributions to the field of strategic profiling:

  1. The acknowledgement that relationships (i.e., services offered at no
    perceived cost to customers) are as important as products and services
    when considering what to offer to markets; and
  2. The idea that a decision must be made on whether your positioning
    will be competitive, distinctive, or breakthrough. (Breakthrough
    positioning is when a company decides to dominate a market with their

The cultivation of a fiercely loyal market starts with an executive
decision to offer breakthrough relationships. Any decision that involves
breakthrough positioning cannot be made capriciously — with it
comes a commitment to install the key capabilities required to support
it, which in this case, involves a sizable investment in big data

It’s often difficult to build a business case for
breakthrough relationship offerings, as they inherently have no revenue
component; that’s why your relationship offerings should always be
structured within the context of a revenue-generating product or
service. For example, an enterprise software company may offer free
analytic services to select customers as a relationship offering instead
of charging for them as a service offering. If this is the approach,
these analytic offerings should never be unbundled from the software —
they are part of its business case.

The signal and the noise

When executing a big data strategy that focuses on building a loyal
customer base, it’s useful to use a signal and noise metaphor. In short,
your most loyal customers are the signal, and everything else is noise.
Your data scientists should already be familiar with this concept; it’s
frequently used when teaching and applying statistics to business

In most cases, you’ll initially want your big data analytics team to
search internally for your best customers. Your best customers are the
ones who are the most satisfied at the least cost to your organization.
The task of looking for your best customers is easier said than done.

First, the team must identify all your customer touch-points (order
management, customer service, etc.) and unify your internal
representation of each customer (i.e., a 360 degree view of the
customer). Then, the team must calculate the value of each customer
(revenues and costs to the organization) so you can isolate the most
valuable customers. Finally, your big data analytics team must profile
your customer base to determine the characteristics of your best

At the end of this exercise, you’ll ideally have a good set of
characteristics that have a strong signal against customer value with
very little noise. As a bonus, you’ll probably identify several markets
that are terrible for your business; these are the people who spend very
little money and take a lot of time with your customer service
representatives. Armed with this information, you’ll know where to focus
your marketing dollars and your precious relationship offerings.

A love connection

Once you identify your best customers, it’s time to put your
relationships strategy into high-gear. It’s Marketing’s job to bring
more of these customers in the door, but it’s your relationship
offerings that will put your best customers over the top. What service
will you provide, free of charge, to your best customers? This is
another area where big data analytics can come in handy.

It’s time to turn your big data analytics team into a market research operation. Their job now is to find out what else
your best customers absolutely love. There are a variety of ways to do
this, but a great way to start is by listening to their online
conversations. The progression of social media analytics is truly
exciting. It’s not only a great way to keep tabs on how your best
customers feel about you, but also what their other passions are. If you
can tap into just one or two of these alternate passions, and offer
that to your best customers for free, you will create a bond that no
other competitor can break.


Not every company decides to center its corporate strategy on a loyal
customer base; however, the ones that do should use big data analytics
to identify its best customers and then decide what free service (i.e.,
relationship) it can offer that will engender fierce loyalty.

Take some time today to design a big data strategy that will bring
you and your best customers together. There’s no sense in throwing good
money into bad relationships.